Legislative Council of the Hong Kong Special Administrative Region

OFFICIAL RECORD OF PROCEEDINGS

Wednesday, 29 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., LL.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., F.Eng., 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 CHRISTINE LOH KUNG-WAI

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 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 LAW CHI-KWONG

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-KA

THE HONOURABLE TSANG KIN-SHING

DR THE HONOURABLE JOHN TSE WING-LING

THE HONOURABLE LAWRENCE YUM SIN-LING

MEMBERS ABSENT

THE HONOURABLE PAUL CHENG MING-FUN

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

PUBLIC OFFICERS ATTENDING

MR MICHAEL SUEN MING-YEUNG, C.B.E., J.P.

CHIEF SECRETARY

THE HONOURABLE DONALD TSANG YAM-KUEN, O.B.E., J.P.

FINANCIAL SECRETARY

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

ATTORNEY GENERAL

MR CHAU TAK-HAY, C.B.E., J.P.

SECRETARY FOR RECREATION AND CULTURE

MR HAIDER HATIM TYEBJEE BARMA, I.S.O., J.P.

SECRETARY FOR TRANSPORT

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 RAFAEL HUI SI-YAN, J.P.

SECRETARY FOR FINANCIAL SERVICES

MR JOSEPH WONG WING-PING, J.P.

SECRETARY FOR EDUCATION AND MANPOWER

MR PETER LAI HING-LING, J.P.

SECRETARY FOR SECURITY

MR BOWEN LEUNG PO-WING, J.P.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS

MR ALAN LAI NIN, J.P.

SECRETARY FOR THE TREASURY

MRS STELLA HUNG KWOK WAI-CHING, J.P.

SECRETARY FOR HOME AFFAIRS

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

MR RAY CHAN YUM-MOU, ASSISTANT SECRETARY GENERAL

PAPERS

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

Subject

Subsidiary Legislation	L.N. No.
Official Languages (Alteration of Text) (Fixed Penalty (Traffic Contraventions) Ordinance) Order 1995	532/95
Official Languages (Alteration of Text) (Fixed Penalty (Criminal Proceedings) Ordinance) Order 1995	533/95
Designation of Libraries (Urban Council Area) (No. 2) Order 1995	534/95
Public Health and Municipal Services Ordinance (Public Pleasure Grounds) (Amendment of Fourth Schedule) (No. 7) Order 1995	535/95
Public Swimming Pools (Designation) Order 1995	536/95
Food Business (Urban Council) (Amendment) Bylaw 1995	537/95
Stadia (Urban Council) (Amendment) Bylaw 1995	538/95
Official Languages (Authentic Chinese Text) (Fire Investigation Ordinance) Order	(C) 103/95
Official Languages (Authentic Chinese Text) (Co-Operative Societies Ordinance) Order	(C) 104/95
Official Languages (Authentic Chinese Text) (Waterworks Ordinance) Order	(C) 105/95
Official Languages (Authentic Chinese Text) (Public Lighting Ordinance) Order	(C) 106/95
Official Languages (Authentic Chinese Text) (Holidays Ordinance) Order	(C) 107/95
Official Languages (Authentic Chinese Text) (Chinese Temples Ordinance) Order	(C) 108/95
Official Languages (Authentic Chinese Text) (Man Mo Temple Ordinance) Order	(C) 109/95
Official Languages (Authentic Chinese Text) (Fixed Penalty (Traffic Contraventions) Ordinance) Order	(C) 110/95
Official Languages (Authentic Chinese Text) (Fixed Penalty (Criminal Proceedings) Ordinance) Order	(C) 111/95
Official Languages (Authentic Chinese Text) (Motor Vehicles Insurance (Third Party Risks) Ordinance) Order	(C) 112/95
Official Languages (Authentic Chinese Text) (Tattooing of Young Persons Ordinance) Order	(C) 113/95
Official Languages (Authentic Chinese Text) (Road Traffic (Driving-Offence Points) Ordinance) Order	(C) 114/95

　 Sessional Paper 1995-96

No. 27

Environment and Conservation Fund
Trustee's Report 1994-95

ORAL ANSWERS TO QUESTIONS

Chicken and Pig Farming Industry

1. MR LO SUK-CHING asked (in Cantonese): In view of the serious shortfall of manpower in the chicken and pig farming industry, a training programme was organized by the authorities concerned early this year. It was learnt that initially some 500 people applied for enrolment, but only some 180 of them actually took part in the programme. There were about 30 trainees who joined the chicken and pig farming industry after completing the training programme. Of this group, only nine stayed on in their jobs after two months, among whom three were between 30 - 49 years of age and six were over 50. In this connection, will the Government inform this Council:

of the estimated shortfall of workers in the industry at present;
whether the Government has any plan to set a special quota for the importation of labour for the industry; if so, how many workers are scheduled to be imported under the plan and when the plan will be implemented; if not, how the problem of labour shortage in the industry will be solved, and what remedial measures will be taken to prevent the industry from vanishing from the territory due to labour shortage; and
what are the reasons for the unsatisfactory results of the training programme; and whether the Government will carry out a review of the programme and organize another one in the near future?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, the training programme which the Honourable LO Suk-ching referred to was a pilot retraining programme for pig farm workers launched jointly by the Employees Retraining Board (ERB) and the Agriculture and Fisheries Department (AFD), in collaboration with the Federation of Pig Raising Co-operative Societies of Hong Kong in August 1995. Under this programme, ERB reimbursed the employers of pig farm workers 50% of the $5,000 monthly salary paid to the trainees during the six months of their on-the-job training. This included eight days of intensive training on the latest pig rearing technology provided by AFD. These employers also undertook to employ the trainees on completion of their six-month programme at a monthly salary of not less than $7,000. The programme was open for applications by persons between 40 and 60 years of age. This retraining programme did not cover the chicken farm workers.

I now reply to each of the three specific parts of the question.

Government has no statistics on whether there is any shortfall of workers in the livestock farm industry, as the employment and unemployment statistics compiled by the Census and Statistics Department do not contain a breakdown to such a finite level. The number of reported vacancies from employers of pig farms participating in the pilot retraining programme was 70 in August 1995.
The Government has no plan to set up a special quota for the importation of workers specifically for the livestock farm industry. However, we have proposed the introduction of a Supplementary Labour Scheme (SLS) with a quota ceiling of 5,000 to assist employers who have genuine need to import workers to take up jobs which cannot be filled locally. It would be open to applications from all industries, including the livestock farm industry. Each application would be considered on its own merits and there would not be any industry sub-quotas. Meanwhile, we would advise employers in the livestock farm industry with job vacancies to continue to recruit suitable local workers through all possible employment channels, including the Job Matching Programme of the Labour Department and any retraining programmes which may be organized by the ERB.
Apart from organizing the above retraining programme with ERB, the AFD has been taking the following measures to address the manpower problem and other development needs of the livestock farm industry:
1. provision of short training courses to farmers geared to enhance the productivity of the industry;
2. provision of technical advice on the adoption of labour-saving practices and machinery; and
3. provision of technical support to promote modern, efficient, safe and environmentally acceptable farming methods.
According to feedback from trainees who have left the programme, the primitive living conditions, the long and irregular working hours, and the difficulty of adapting to the laborious nature of work on a pig farm have deterred them from staying on in the programme.
The ERB has conducted a thorough review of the pilot retraining programme. It is now discussing with both the AFD and the two leading pig farmers associations the possibility of organizing a second programme in early 1996.

MR LO SUK-CHING (in Cantonese): According to a study conducted by some concerned bodies, there is a shortfall of about 500 workers for the pig farms, while the chicken farming industry has a manpower shortage of about 350. People in charge in the relevant trades hope that local workers can be recruited because local workers can ensure relatively stable manpower supply and they can be retained for long period. The main problem lies in the provision of housing because there are some restrictions on the erection of cage homes and the provision of training for the staff also poses difficulties. Moreover, the working conditions of the industry deter local workers from taking up the job, thereby resulting in a very high wastage rate. Under the situation that Hong Kong cannot provide suitable workers locally, they hope that they can import foreign labour. The industry also hopes that it can either be exempted or be provided with a certain sub-quota under the future SLS, which has a quota ceiling of 5,000. How is the Government going to react to these requests?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I have just mentioned in my main reply that we are now proposing to introduce the SLS. Under this Scheme, those employers in any industry who are genuinely unable to recruit local workers may apply for importation of labour under the proposed SLS. In other words, if the employers have passed our three tests, that is, after going through open and local recruitment, the Labour Department's Job Matching Programme and the alternative of ERB retraining, but still cannot recruit local workers, they may apply for imported labour under the proposed SLS. The main spirit of this Scheme is that the Government will consider each case on its own merits and there would not be any industry sub-quotas. If a certain industry, for example the pig farming industry or the chicken farming industry, passes the three tests but still cannot recruit local workers, we would then consider accepting their applications and allowing these industries to import foreign labour.

MR LAU CHIN-SHEK (in Cantonese): Mr President, the Secretary for Education and Manpower has mentioned in paragraph (c) of the main reply the feedback from trainees who have left the programme. What do they specifically refer to as regards their living conditions, and long and irregular working hours ? Are the working hours and living conditions reasonable?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, according to our understanding, primitive living conditions mainly refer to the fact that their lodgings are located in rural areas, for example, the primitive accommodation facilities erected in the vicinity of pig farms. Long working hours is a requirement of the pig farming industry and the workers have to work for about 10 hours a day. I have just mentioned that we are now reviewing this programme. If we are going to launch similar retraining programmes in the future, we will consider requiring the employers to set a minimum standard for the living conditions. We will also study what improvements can be made in the areas of working hours and other working conditions. Relaxation of Hotel Plot Ratio

2. MR HOWARD YOUNG: Mr President, regarding frequent calls over the last few years for a relaxation of plot ratios for hotels, will the Government inform this Council whether any decisions have been made by the Government in this regard; if so, what are the details and how will such a relaxation affect the status of floor basements, plant rooms and other facilities which were previously granted concessions in the calculation of plot ratios for hotels?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President, the Administration has decided to raise the plot ratio limits in the Building (Planning) Regulations for hotel developments up to non-domestic standards from previous domestic standards. This has generally increased plot ratios from a range of eight to 10 to a maximum of 15, subject to the overall plot ratio limits under the statutory Outline Zoning Plans. This took effect in September 1995 when a revised practice note for authorised persons and registered structural engineers was issued. Concessions for hotels were previously granted in respect of non-domestic basement areas for back-of-house facilities and other hotel compatible uses. These have now been withdrawn following the increase in the plot ratio limits for hotel developments. Nevertheless, concessions for suitably designed vehicular setting-down and picking-up areas, plant rooms and dedicated public passage areas will continue to be considered on their own merits for exemption from gross floor area calculations.

MR HOWARD YOUNG: Mr President, the objective and the major driving force behind the calls for relaxation of hotel plot ratios were to try and encourage developers to halt the trend of tearing down hotels and redeveloping them into office buildings. The Federation of Hong Kong Hotel Owners, one of the bodies concerned with this issue, last month issued a statement and produced statistics which seemed to imply that previous concessions had already amounted to an equivalent of four times of the plot ratio and therefore they claim that these increases in plot ratios in fact have not brought any benefit to hotels in giving them more scope for investing in hotel development rather than office buildings. Is the Secretary aware of such allegations; if so, does the Government think that the objective of relaxing plot ratios for hotels has been achieved or not?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President, we have taken a look at the information supplied by the Hotel Owners Association. What I will say is that the calculations made by the Hotel Owners Association were very much based on a hypothetical basis. They gave us calculations related to three possible hotel sites, without any addresses, and we have no way to determine whether the Hotel Owners Association's calculations are correct or not. But in any case, based on the hypothetical cases given to us, I must say the Administration does not agree with the findings of the Hotel Owners Association for several reasons. The first one is the higher plot ratios shown on the data, or the information, supplied by the Association which was based on theoretical values on the assumption that all concessions possible would be given. But concessions to plot ratio calculations have always been discretionary rather than as a matter of right. Secondly, the Hotel Owners Association's calculations for plot ratios for guest rooms were calculated as only reaching a maximum development potential of 10.8, whereas under our new policy for non-domestic use, more hotel rooms can be built on the same site because of the higher plot ratios now available to them.

On the other hand, the Administration has actually done a check, hotel by hotel, on a large number of existing hotels, since the introduction of our new policy in September 1995. The results indicate that the new policy, in overall terms, is more favourable than the old in encouraging hotel development in a sense that a higher plot ratio development is possible in most of these sites.

PRESIDENT: I have three names on my list, I propose to draw a line there.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, in the main reply of the Secretary for Planning, Environment and Lands, he mentioned that the domestic standards of plot ratio are eight to 10 times. How can the Government prevent businessmen from building a hotel only to sell the rooms one by one, thus creating a hotel of a domestic mode? Let me say that again. If a residential building is built, its plot ratio generally ranges from eight to 10 times; but if a hotel is built and the rooms are sold one by one, the plot ratio can reach eight to 10 times, or even 15 times.

PRESIDENT: I am sorry, Mr CHIM, you are straying away from the original question. The original question was on relaxation of plot ratios only; you are talking about the sale of hotels.

MR CHIM PUI-CHUNG (in Cantonese): The question is how to prevent some property developers from taking advantage of this plot ratio of 15 times to build a hotel, and then sell the rooms one by one as if they are residential units? Has the Government thought about this problem?

PRESIDENT: Secretary for Planning, Environment and Lands, will they still be regarded as hotels?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, I believe people in the construction or engineering industry understand that Government approval of the construction of buildings is subject to the terms of the Crown lease and also the building regulations. It will be clearly stated in the Crown lease if the development of a hotel is permitted. Up till now, we have not seen any hotel operator selling the hotel rooms one by one. Also, if that were the case, the buyer will needs to acquire a so-called individual title. Under the present circumstances, it is impossible to divide the lease if the hotel rooms are sold one by one. Who will buy those units then? If the Honourable CHIM Pui-chung has any real case that a hotel operator is selling the rooms one by one and that the buyers can still have the induvidual titles, I would like to know about that as well.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, I hope the Government can pay attention to this problem. If the buyer and seller both agree ......

PRESIDENT: Please come to the question, Mr CHIM.

MR CHIM PUI-CHUNG (in Cantonese): Has the Government ever studied this problem because this possibility really exists?

PRESIDENT: Would you like to rephrase it: Does the Government agree that that possibility exists?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, as I have just mentioned, there is already proper control on Crown lease and title of property. I do not believe somebody will go to a hotel and buy a room for residential purpose because no title will be given to him after he has paid the money.

MR ALBERT CHAN (in Cantonese): Mr President, the relaxation of plot ratios for hotels has been the demand of both the hotel and tourism industries for years, and now the Government has decided to relax the plot ratios. However, as what the Secretary for Planning, Environment and Lands has mentioned in his reply, in deciding to relax the plot ratios at present, some areas will still be exempted from gross floor area calculations. Would this decision turn the hotel industry into a privileged class and give them a special position, thereby resulting in unfairness to other types of buildings?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, I am rather puzzled by the Honourable Albert CHAN's question. Is he suggested that the Government should not grant exemption or asking why do we withdraw the exemption? Obviously the views reflected by the hotel industry are contrary to the question just raised by Mr CHAN.

MR ALBERT CHAN (in Cantonese): Mr President, since the control on plot ratios was rather stringent in the past, therefore, the construction industry made a compromise with the Government. The result was that the Government would grant more exemptions so as to increase the areas in the approving process. As the Government has now relaxed the plot ratios, if they still grant this privilege to the hotel industry at the same time, will it amount to unfairness to other types of buildings in the construction industry? Just as what the Secretary for Planning, Environment and Lands has mentioned, my views may well be different from that of the hotel industry.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, I can clearly state that we agree with the spirit behind the question raised by Mr CHAN. The basis for the hotel industry to carry out this evaluation and the Government to make this decision is that we hope to establish equality between the development of usable land for the hotel industry and other commercial land developments. Therefore, after increasing the business areas of the hotels, some exemptions granted in the past have been withdrawn. So hopefully the land users can enjoy equal treatment.

I just said that we still have to grant some exemptions because we have to take into account the special circumstances in the business operation of hotels. For example, there is a need for a setting down and picking up area, and an area for loading and unloading luggages. We will thus grant some exemptions in calculating the gross floor area, and this is at the present moment approved under the current regulations on building designs.

MR EDWARD HO: Mr President, I think what we are talking about is how to encourage developers to build hotels to promote more tourism industry activities which are very important to Hong Kong. The Secretary said first of all that the original concessions were given on a discretionary basis. In fact what happened was that they were given as a matter of course for bone fide hotels in practice note to authorized persons. So in every case where there was a bone fide hotel, it was given. So perhaps he can clarify that.

Secondly, if he has done the examples, I think we would very much like to have those examples. But my own calculation is, if you build a hotel, for instance, with four floors of basements, you already have four times the plot ratio. And then the original concession for a bonus plot ratio for areas given up for loading and unloading is to multiply that by five and add that to the plot ratio on top. So in fact what the Administration has done is relaxing the plot ratio but taking away the original concession, and ending up with nothing to gain. So could the Secretary clarify and also give us that information?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President, I think the Honourable Member knows as well as I do that concessionary gross floor areas or exemptions from calculation of plot ratios, under the Building Regulations, has always been discretionary rather than as a matter of course. To say so would be misleading.

I think we have to look at the issue from two angles. The first one is: Are we talking about encouraging more hotel developments so that more hotel rooms will be provided in future? If that is so, the increased plot ratio for non-domestic uses under our new policy which permits a plot ratio development, for example, of 12 to 15 above ground, will actually increase the number of rooms to be offered to tourists. Concessionary plot ratios calculations in the past are related to plant rooms and other back-of-house facilities. They do not cater for accommodation of tourists. They are to support the hotel. But if any particular application can demonstrate that certain services are necessary as ancillary facilities to a hotel, we will be able to consider that on a case by case basis.

Mr HO's question also assumes that existing hotels gain very little under the new policy of additional plot ratios or extended plot ratios. But we must note that even in our studies, most of these hotels were actually built in the last five years or so and I see this in a rather theoretical sense that these hotels will suffer because they are already there, they were built during the last three, four or five years and they are not thinking of redevelopment. But the new policy will definitely help the construction of new hotels on sites which are not built as hotels yet, because in that case the new hotel developments will enjoy the full plot ratio now permitted under the new policy.

PRESIDENT: Mr HO, not answered?

MR EDWARD HO: Yes, Mr President, I asked whether the Secretary would give us those examples that were made, so that he can substantiate his case. Could he tell us whether he is willing to do that or not?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President, I will be quite happy to provide copies. (Annex I)

Library Block of Northcote College of Education

3. MR ANTHONY CHEUNG asked (in Cantonese): Mr President, it is learnt that the newly completed library block of the Northcote College of Education (NCE) may have to be demolished in 1997. In this connection, will the Government inform this Council:

of the reasons why no mention was made in the discussion paper on funding request submitted to the Finance Committee of this Council in June 1993 that the site on which the library block was located would be used for other purposes in 1997; and
whether there was any co-ordination between the departments concerned at the time when the construction of the library block was being planned; if so, what are the details?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, the requirement for an expansion project of the NCE, which includes the redevelopment of the existing library into a new library block, was first identified in 1983 to cater for the increase in student enrolment and to enhance the quality of teacher education. The project was included as a Category D project in 1984 and upgraded to Category B in 1985. Detailed drawings for the project were prepared in 1991 and funds were secured in the 1993-94 Estimates to enable the project to commence.

In February 1993, the Provisional Governing Council (PGC) for the Hong Kong Institute of Education (HKIEd) was established with a view to taking over the four Colleges of Education and the Institute of Language in Education (ILE). One of the early tasks of the PGC was to examine the requirements of the campus of HKIEd, the development capacities of the existing Colleges of Education, and the possibility of developing a unified main campus or retention/redevelopment of the existing Colleges of Education. The Architectural Services Department (ASD) was requested to conduct a study on the development capacities of the sites of the existing Colleges of Education. A site search was initiated in parallel to identify possible sites for development of a unified campus.

As regards part (a) of the question, when the request for funding of the NCE expansion project was submitted to the Finance Committee of this Council in June 1993, no decision had been taken by the PGC on the future campus of the HKIEd. Also, there was no application to acquire the NCE site. Hence the possibility that the library block might be used for other purposes in 1997 did not arise.

In July 1993, the PGC was informed of the various proposed interim improvement measures at ILE and the Colleges of Education including the NCE expansion project. In August 1993, the PGC decided that a site at Tai Po Area 34 was suitable for the development of a unified HKIEd campus. In September 1993, the PGC confirmed to the Administration that there was still a justified need for the construction works of the NCE expansion project to commence in order to improve the substandard facilities at the College and raise the quality of teacher training in the intervening years.

In May 1994, in seeking the Finance Committee's approval in principle for the HKIEd campus development project, the Administration informed Members that interim improvement works would be carried out in the existing campuses (including the NCE site) to upgrade the standard of accommodation and facilities.

As regards part (b) of the question, like all other government building projects, the NCE expansion project was required to go through a series of established procedures in its planning stage. The development of the project was co-ordinated by the ASD. Relevant government branches and departments, namely the Education and Manpower Branch, the Education Department, Works Branch, Finance Branch, and the Government Property Agency were consulted and required to indicate their support, before the project was recommended for upgrading.

In response to a reference in the question that the completed library block of NCE may have to be demolished, I would like to say the following. In July 1994, the University of Hong Kong (HKU) submitted an initial proposal to acquire the NCE site for redevelopment of the Faculty of Medicine. In July 1995, the Administration agreed in principle to HKU's proposal. The Administration plans to allocate the NCE site to HKU for the redevelopment of the Faculty of Medicine once the site is vacated by the College.

We will make a submission to the Finance Committee of this Council shortly seeking approval in principle for this development project and a sum of $4 million for the University to carry out detailed site investigation and preliminary design. The feasibility and cost-effectiveness of retaining the existing NCE buildings, especially the new library block will be part of the proposed study and will be carefully considered.

MR ANTHONY CHEUNG (in Cantonese): Mr President, will the Secretary for Education and Manpower further clarify whether the Government has, when deciding to allocate the NCE site to HKU, set down any conditions to ensure that the library block can be retained in a certain way so that the building which cost $20 million of public money to construct will not go down the drain? In addition, the Secretary has mentioned that the Government will seek the Finance Committee's approval for an allocation to study the feasibility and cost-effectiveness of retaining the existing NCE buildings. So will the Government be able to set down requirements that have binding effect over HKU?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I wish to clarify one thing. At present, regarding HKU's application for using the NCE site for the redevelopment of the Faculty of Medicine, the Government has agreed in principle that it is feasible but has not yet allocated the site to HKU. Also, as I have clearly stated in my main reply, the project has to go through other procedures, that is, we have to make a submission to the Finance committee of this Council for its approval in principle for this redevelopment project. Should the Finance Committee agree, HKU will be required to consider the feasibility and cost-effectiveness of retaining the existing NCE buildings when doing the site investigation and preliminary design.

Rent Allowance under Comprehensive Social Security Assistance

4. MR FRED LI asked (in Cantonese): As the rent allowance under the Comprehensive Social Security Assistance (CSSA) Scheme has not been adjusted since July 1993, will the Government inform this Council of:

the reasons why the Government has not adjusted the rent allowance in the past two years;
the rate of rent increase in private residential buildings in urban areas during the same period;
the size of a flat which a family of two to three members can rent in the urban areas with the existing monthly maximum rent allowance of $2,265; and
the average monthly rent allowance at present received by CSSA recipients living in private residential buildings; and how many such households have to use part of their monthly standard allowance to cover the shortfall in the rent allowance?

SECRETARY FOR HEALTH AND WELFARE: Mr President, under the CSSA Scheme, a rent allowance is payable to enable recipients to meet the cost of accommodation. The allowance is set at levels which can fully cover the actual rent paid by all families living in public housing estates and the great majority of those living in private housing. The existing maximum levels of the monthly rent allowance range from $1,118 for a single person, $2,265 for a two- to three-person household, $2,858 for a four- to five-person household to $3,420 for a household with six or more persons.

The average monthly rent allowances received by CSSA recipients living in private housing in 1995 are not yet available. They will be ready early next year. But as at the end of December 1994, the average monthly rent allowance received by those living in private housing was about $700 for a single person household, $1,300 for a two-person household, $1,500 for a three-person household and $1,700 for a household with four or more persons. There were about 86,000 CSSA households receiving rent allowance, of which about 22% were living in private housing. Only about 2% of all households receiving rent allowance were paying rent above the existing maximum levels of rent allowance at that time.

CSSA households living in private housing and paying a rent higher than the relevant maximum rent allowance are usually short-term cases. In the event that it would be unreasonable to require CSSA recipients in this situation to move to cheaper accommodation in the short term, their cases may be referred to the Housing Department for compassionate rehousing or in the case of elderly persons, possibly for admission into a residential institution instead. The Director of Social Welfare has the discretionary power to approve payment of rent allowances up to two times that of the relevant maximum rent allowance while the CSSA recipients concerned are awaiting allocation of a public housing unit or admission into a residential institution.

We have no directly relevant statistics relating to the rate of rent increase in the urban areas for the type of accommodation used by CSSA recipients. We publish two indices which give some indication of rent trents. Neither distinguishes between urban and non-urban areas and neither yet has firm figures for 1995. According to the Consumer Price Index (A) rent index, private housing rentals increased by 12.4% from 1993 to 1994. According to the private domestic rental index prepared by Rating and Valuation Department, rents for the smallest properties increased by 15% over the same period. We have no data on the size of flat that a family of two to three persons could rent in the urban areas with a rent allowance of $2,265. This would depend on market forces at the time and would vary greatly depending on the location and condition of the accommodation.

The maximum levels of rent allowance are reviewed and adjusted regularly to ensure that they cover the actual rent paid by all families living in public housing units and by the great majority of those living in private housing. We know that this objective was still being achieved at the end of 1994 and hence no increase over the level set in 1993 was justified at that time.

Presently, we are reviewing the rent allowance as part of our ongoing comprehensive Review of the CSSA Scheme. Any increases arising as a result of this exercise will be implemented at the same time as other recommendations arising from the Review after it has been completed early next year.

MR FRED LI (in Cantonese): Mr President, the Secretary for Health and Welfare has pointed out in the last paragraph of her main reply that the comprehensive Review on the CSSA Scheme would be ready early in January next year. That would include the rent allowance that I asked above. To increase the rate of rent allowance will, of course, lead to increase in social welfare expenditure. Yesterday the Chinese side threatened that this would result in "car crash and destruction of life". Will the Government inform this Council whether the plan to improve the CSSA Scheme will be shelved in view of these remarks?

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Mr President, the Review has been done for some time now and we have sufficient information to submit to the Legislative Council for scrutiny. I believe if the exercise is reasonable, funding will be approved by the Legislative Council.

PRESIDENT: I have got three names on my list and I propose to draw a line there.

MR LAW CHI-KWONG (in Cantonese): Mr President, in her main reply, the Secretary mentioned that rent allowance for a household of two to three persons is just over $2,200. Although the Secretary did not provide data of the size of the flat that they can rent, according to our common sense, just over $2,000-odd can only rent a room of about 100 sq ft, which will be shared by three persons. Each of them will have an accommodation area of only 30 sq ft. It is so crowded that the conditions are worse than those of the overcrowded families in public housing estates. Do you think the rent allowance is adequate? By the same token, when the Secretary said that the 1994 Review revealed that the expenditure spent on accommodation by most of the CSSA recipients did not exceed the rent allowance, I think this is a question of chicken and egg. Bearing in mind that the rent allowance given by the Government is so meagre, how can they afford to rent a more expensive unit? I hope the Secretary will answer this question.

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Mr President, if we want to help the CSSA households in a more practical manner in order to solve their financial as well as other difficulties, we have to, first of all, understand their living conditions and what problem they have in accommodation. I think the most practical way is to help them apply for public housing. A scheme has been set up to help those needy people apply for compassionate rehousing. The Director of Social Welfare does receive thousands of applications every year and the Housing Department has also reserved some quota for families in need. For the elderly, we hope to help them apply for places in residential institutions or hostels for the aged. In doing so, their problem in accommodation as well as other difficulties can be really solved.

MR LEE WING-TAT(in Cantonese): Mr President, I am sure the Secretary is also aware that compassionate rehousing does not apply to most CSSA families. Nor is it available to the elderly and families with disabled members. So the Secretary's reply has not answered the Honourable Law Chi-kwong's question. In regard to part (c) of the Honourable Fred LI's question concerning the size of a private housing unit which can be rented for just over $2,000, the Secretary replied that there is no such statistics. It is very surprising because such information can certainly be found in the annual report published by the Rating and Valuation Department. If you do not believe me, tomorrow I will go for a search. I think one can rent a room of less than 100 sq ft with just over $2,000. The Secretary may feel too ashamed to mention it because the space is really inhumanly small. Currently, the expenditure spent on accommodation by a family of four on the general waiting list is $6,600 which is 2.3 times the same expenditure of a CSSA family. Does the Social Welfare Department or the Health and Welfare Branch have any criteria, such as the location of the accommodation and the basic per capita area, in determining the rent allowance?

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Mr President, according to the preliminary information obtained from the Review on rent allowance for CSSA households, certain category of households, especially those living in private housing units, may find that the rent allowance so determined cannot meet their needs. So we have started to undertake a review in this aspect.

In regard to the provision of public housing units to needy families, we can do it in different ways. First of all, we will help those needy households apply for compassionate rehousing. Every year, we have sufficient quota for this purpose. We will also try our best to meet the specific needs of every household, such as their preference in certain districts and sizes of flats. In regard to rent allowance, the ceiling is not more than 150% of the maximum rent payable in public rental housing. However, as I said in my main reply, the Director of Social Welfare has the discretionary power to approve payment of rent allowances up to two times that of the relevant maximum rent allowance.

PRESIDENT: Mr LEE, not answered?

MR LEE WING-TAT (in Cantonese): Mr President, my question is very simple. I ask whether there is any objective criteria, such as the most preferred location and the basic per capita living area which will be regarded as humane, in determining the rent allowance for CSSA households living in private housing?

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Mr President, in regard to private housing, the locality and the living conditions of the buildings will have a great bearing on the rent. Sometimes, the difference is very great. In our review, we will check whether the maximum amount of rent allowance is still applicable or not. In the meantime, we will also see whether the living conditions of the CSSA recipients are good enough. I think the best way is to help them apply for public housing in case we find that their living environment is poor or the living conditions are overcrowded. In fact, different rents are charged in private housing. For sure, rent in urban area is different from rent in non-urban area. Rent also varies from street to street. There is really a lot of work for us to do in order to provide better services to the CSSA households living in private housing.

MR WONG WAI-YIN (in Cantonese): Mr President, the Secretary still refuses to directly answer the basic living area that a person should have. As far as I know, the minimum living area is 5.5 sq m per capita in public housing estates. Recently I am handling matters concerning dog breeding grounds and find that the Agriculture and Fisheries Department (AFD) has stipulated that the minimum living area for a large dog is 7.4 sq m. I wonder what is the implication to be drawn from these figures. It is surprising that the standard set by the AFD is so high. Mr President, in the third paragraph of her main reply, the Secretary said that to require CSSA recipients living in private housing and paying a rent higher than the relevant maximum rent allowance to move to cheaper accommodation would be unreasonable. But I know that when the Housing Department (HD) has decided to request some CSSA households living in public housing estates to move out from their units, they will, by every possible means, transfer them to cheaper and smaller units. Does the Secretary think that the HD is unreasonable as she has mentioned in the third paragraph of her reply?

PRESIDENT: Are you seeking an opinion, Mr WONG?

MR WONG WAI-YIN (in Cantonese): Mr President, since the Secretary, in the third paragraph of her main reply, mentioned that it would be unreasonable to request these households to move to smaller and cheaper units; this is actually what is happening now, so I hope the Secretary will answer this question. Will she guarantee that such a situation will not happen?

PRESIDENT: That would be the Government's rationale for the existing policy and not an expression of personal opinion. Secretary, would you like to state the Government's policy on the matter?

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Mr President, I said in the third paragraph of my main reply that those who are living in private housing and paying rent above the maximum payable rent allowance are usually short-term cases. Some of these families may choose to move to cheaper accommodation. But some, owing to some other reasons or their specific needs, such as the locality of their children's schools, do not think that it is suitable for them to move to other places. We will then try our best to refer these cases to the Housing Department in the hope that compassionate rehousing could be arranged for them.

Sex Education

5. DR JOHN TSE asked (in Cantonese): Will the Government inform this Council of the following:

how the Government determines the definition, content and curriculum of sex education; what reviewing mechanism it has put in place and when a review will be conducted;
how many primary and secondary schools provide sex education on a systematic basis and what is its mode of teaching; and
what measures does the Government have to enhance the quality of sex education and make it more readily available in schools, and how much is expected to be spent by the Government for these purposes in the current financial year?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President,

As stated in the Guidelines on Sex Education in Secondary Schools issued by the Education Department in 1986, sex education in schools covers three main aspects of personal development, namely physical growth, emotional maturation and inter-personal relationships. It encompasses sexuality, feelings about being male or female, the ability to trust and love, attitude towards family, and the understanding of personal and social meanings of relationships with other people.

Under a cross-curricular approach in the teaching of sex education, the Education Department encourages schools to integrate sex education in relevant subjects in the formal curriculum, to be supplemented by topic-related extra-curricular activities. For primary schools, sex education is taught through Health Education to provide pupils with a basic knowledge of the development of the human body. It is also taught through Social Studies to help pupils develop caring attitudes within and outside the family. At the secondary level, sex education is usually taught through Integrated Science, Biology, and Human Biology on physical growth; Home Economics on practical aspects of family life; Religious Studies and Liberal Studies on moral values; and Social Studies on adolescent development and family and peer relationships.

The content and curriculum related to sex education are drawn up and reviewed regularly by the relevant subject committees under the Curriculum Development Council. A major review of the Guidelines will take place in 1996.
Nearly all the primary schools and about 75% of the secondary schools are teaching sex education through their formal curriculum as described in paragraph (a) above. They also make use of school assemblies, moral education periods, extra-curricular activities and so on to supplement the formal teaching.
The Education Department has actively promoted and enhanced the quality of sex education in schools by:
1. tendering advice on sex education during regular school visits;
2. conducting in-service teacher training in sex education;
3. upgrading the multimedia and computer facilities at the two sex education resource centres in North Point and Hung Hom. Teaching kits or display materials are produced to help teachers update the sex education programmes in their schools;
4. undertaking surveys and research on sex education. In October 1994, the Chinese University of Hong Kong was commissioned to conduct a research study on the knowledge, attitude and behaviour of secondary school students relating to sex. It is hoped that the research findings available in early 1996 will provide useful input for the 1996 review on the guidelines; and
5. encouraging schools to avail themselves of leaflets, booklets and audio-visual materials on sex education produced by the Central Health Education Unit of the Department of Health.
  The total amount of funds allocated to promoting sex education in schools in 1995-96 is about $3 million.

PRESIDENT: I have seven names on my list. I propose to draw a line there. In the interests of Members and in order to allow more supplementaries to be asked, may I appeal to Members to keep their preamble to suplementaries very, very short indeed and not to digress into matters which do not relate to the main question.

DR JOHN TSE (in Cantonese): At present, sex education is taught on a piecemeal basis and no effort has been made to promote it on a comprehensive scale. There are now at least some 120 secondary schools in Hong Kong that do not provide sex education at all. I think what has been done to facilitate sex education fails to cater for the need of youngsters in the course of growth. Can the Government inform this Council of the number of hours of training in sex education a secondary school student will receive when he/she graduates from school and whether such training is adequate? How many teachers have undergone in-service training in sex education on a systematic basis?

PRESIDENT: Secretary, are you prepared to give figures? May I remind Members that previously it has been agreed that supplementaries on figures ought to be incorporated in the main question.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, with regard to the first supplementary, sex education is, as I have said in the main reply, taught in secondary schools through many subjects under a cross-curricular approach. In this connection, the Education Department does not have statistics regarding for how long a secondary school student will receive sex education through various subjects when he/she graduates from school. In respect of the second supplementary, as I have also mentioned in the main reply, we have provided in-service training in sex education for teachers. Statistics show that over 1,000 secondary school teachers have taken the comparatively in-depth training programmes in sex education organized by the Education Department or the Family Planning Association.

MR CHEUNG MAN-KWONG (in Cantonese): Mr President, in view of the increasing trend of youngsters, in particular small children, being sexually abused and even involved in incest cases recently, can the Government inform this Council whether the content of sex education includes providing small children with the correct knowledge relating to sex to enable them to distinguish between sexual abuse and demeanours betokening affection or intimacy so that they can promptly take psychological precautions at an early stage and even resist the attack or report to the police afterwards?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I have stated in the main reply that sex education in primary schools seeks to provide pupils with a basic knowledge of the development of the human body, which of course includes knowledge of the physical changes that male or female will undergo in the course of growth. We will conduct a comprehensive review of the Guidelines on Sex Education in Secondary Schools in 1996. In the meantime, we are considering and studying ways to enhance pupils' understanding of the circumstances in which contacts may carry implications that go beyond amity in a general sense, just as the Honourable Cheung Man-kwong referred to just now. We will consider fostering pupils' awareness in this regard.

MR HENRY TANG (in Cantonese): Mr President, in the main reply the Government mentioned that nearly all primary schools and 75% of secondary schools provide sex education. Why is the number of secondary schools providing sex education in the formal curriculum relatively small? Besides, sex education is now taught separately through many subjects ......

PRESIDENT: Only one question is allowed, Mr TANG.

MR HENRY TANG (in Cantonese): Mr President, I will rephrase my question. At present, sex education is scattered and taught separately through many subjects. Has the Secretary for Education and Manpower considered developing sex education as an independent subject and why is sex education not taught in all secondary schools?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, under the existing Guidelines, we hope to provide secondary school students with sex education and impart knowledge relating to sex to them through a diversity of subjects. However, as I said earlier, we are waiting for the findings of a research study conducted by the Chinese University on the knowledge, attitude and behaviour of secondary school students relating to sex. When the findings are available, we will review the Guidelines on Sex Education in Secondary Schools across the board in 1996 to consider whether or not it is necessary to provide certain schools with guidelines advising them to teach sex education as an independent subject. At present, we believe that it is more appropriate to teach sex education under a cross-curricular approach.

MR ANDREW CHENG (in Cantonese): Mr President, I think the teaching of sex education through an informal curriculum at present simply cannot keep pace with the need of youngsters for knowledge relating to sex as they are living in a society where there are all sorts of temptations. In the face of the proliferation of pornographic comics, some of which are passing on wrong ideas of sex to our next generation, the Government only provides $3 million for the implementation of sex education. Compared with what the pornographic comics publishers have invested, this amount of money is indeed trivial. Has the Government considered stepping up publicity through the media, thereby making members of the public change the way they feel about sex education and further enhancing sex education for young people?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, first of all, I do not necessarily agree that the effectiveness of sex education is directly proportional to the amount of resources allocated. Besides, as I said just now, we will launch a relatively comprehensive review in 1996 to study ways to facilitate the popularization of sex education in schools. I do not consider it a more effective way to provide sex education to students through Announcement of Public Interest on television after they have left school than imparting to them the correct attitude towards sex and knowledge relating to sex in schools by well-trained teachers through a systematic curriculum.

MR ERIC LI (in Cantonese): Mr President, the biggest problem in the implementation of sex education is that students are very often provided only with incomplete knowledge of sex. While their interest in sex is aroused, the students cannot ask questions or discuss the matter with their teachers. The Education Department, of course, will not encourage students to carry out such experiments. It is learned that teachers have also found it very difficult to teach this subject because of the lack of adequate training. In addition, this subject involves many teachers as it is taught under a cross-curricular approach but each teacher is not allowed too much time for it. The Secretary for Education and Manpower said earlier that 1,000 teachers have received training. Does he know how many of them are teachers of sex education? What are the opinions of these teachers regarding, for instance, the suitability of the teaching materials, the need to treat it as an independent subject and so on? May I ask if the Education Department has any recognized findings in this respect? If so, what are these findings?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, first of all, under the Guidelines on Sex Education in Secondary Schools that we drew up in 1986, teachers are not only encouraged to impart knowledge of sex education to students, they are also advised to encourage students to ask questions. They can also pass on knowledge relating to sex to students by means of group activities. Moreover, we will conduct a comprehensive review on the Guidelines on Sex Education in Secondary Schools in 1996 and we plan to launch a public consultation exercise prior to the implementation of the revised guidelines. Therefore, apart from teachers and parents, members of the public, including Legislative Councillors, can offer us their brilliant thoughts by then.

MR ANTHONY CHEUNG (in Cantonese): Mr President, "sex" is indeed a matter which gives cause for great concern. Surveys show that many youngsters nowadays have had experience in sex and what is more, premarital sex. However, our sex education has been laying its stress on teaching young people or students knowledge of the changes in the human body or urging them not to have sex. In view of the changes in society, has the Government considered shifting the emphasis to providing students with knowledge of safe sex?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, we have, in fact, many teaching materials other than the Guidelines on Sex Education in Secondary Schools. I will be very happy to show Members after this sitting those teaching materials which can pile up to nearly two feet high. Those teaching materials include knowledge of premarital sex, abortion, homosexuality and so on. Therefore, the curriculum comprises not just the study of changes in the human body. Knowledge of physical growth is largely taught in primary schools. Teaching materials for secondary schools have become far more complex.

DR LEONG CHE-HUNG (in Cantonese): Mr President, will the Administration inform this Council whether information on venereal diseases and preventive measures against venereal diseases are included in the implementation of sex education? If they are, does the Government have any mechanism in place to assess the effectiveness of sex education? If not, will they be incorporated in 1996 when the review is due to take place?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, sex education in secondary schools comprises a wide variety of information, which, of course, includes information on venereal diseases. As a matter of fact, information on AIDS is also included to teach students the correct knowledge of AIDS. As I have mentioned in the main reply, we hope to conduct a review subsequent to the release of the findings of the research study conducted by the Chinese University. This is because the research study, which is targeted at over 5,000 secondary school students, will find out students' knowledge and attitude relating to sex and whether they have actually engaged in sexual intercourse. It is my hope that the findings of this study will enable us to know more clearly and from a more objective perspective how effective sex education has been among secondary school students after years of implementation. We will then study in what ways the existing Guidelines on Sex Education in Secondary Schools should be revised. Now let me mention in passing that apart from schools, parents also have the responsibility to pass on knowledge of sex to their children. In this connection, the Committee on Home-School Co-operation will conduct a survey in early 1996 to canvass the opinions of parents in general on sex education. I believe that the findings of this survey will be very conducive to the overall review that we are going to conduct in the future.

PRESIDENT: Secretary, Members such as Dr John TSE and Mr Eric LI have asked questions for figures in their supplementaries. Could those be supplied to them after the sitting, in written form?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): I am sorry, Mr President. If I have missed out anything, will Members please repeat their questions so that I can give them an answer?

MR ERIC LI (in Cantonese): Mr President, my question is very simple indeed. The Secretary mentioned just now that 1,000 teachers have received training in sex education. But since sex education is taught under a cross-curricular approach, it may involve tens of thousands of teachers in the teaching of sex education. May I ask if the Administration has a more accurate figure which tells us how many tens of thousands of teachers are involved in the teaching of sex education?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I said just now that 1,000 teachers have attended the comparatively in-depth sex education training programmes organized by the Education Department or the Family Planning Association. However, I would like to clarify that as a matter of fact, most of the teachers currently teaching in schools are trained. In the course of their training, be it at the colleges of education, the Institute of Education, the University of Hong Kong or the Chinese University, knowledge of sex is incorporated in the essential subjects that they have taken. Such being the case, we cannot say that, other than those 1,000 teachers, other teachers are totally devoid of knowledge of sex or unsuitable for teaching students knowledge relating to sex.

Widening Gap between the Rich and the Poor

6. MR TSANG KIN-SHING asked (in Cantonese): Mr President, at present the Census and Statistics Department conducts a population census every 10 years and a by-census every five years, using the Gini coefficient to indicate diversity in household income distribution. Will the Government inform this Council:

whether, in the face of a continuing rise in value of the Gini coefficient in recent years which points to widening gap between the rich and the poor, the Government has analyzed the reasons behind this phenomenon, and what measures the Government has put in place to improve the situation;
whether the Government will consider shortening the interval between censuses to ensure that the relevant figures on household income are updated more regularly; and
whether the Government will conduct longitudinal studies on certain families, such as families which are long-term Comprehensive Social Security Assistance recipients, families consisting of people with long-term unemployment or underemployment problems, families with handicapped member(s), families of new immigrants, low-income families and so on, so that the situation of social mobility can be reflected; if not, what the reasons are?

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, in response to the Honourable TSANG Kin-shing's question which comprises three parts, the reply below accordingly is divided into three parts. Since part 1 covers a very broad area, the reply is correspondingly longer.

The value of the Gini coefficient as compiled on the basis of the 1991 Population Census was 0.476, while those as shown by the 1981 Population Census and 1986 By-census were 0.453 and 0.451 respectively. Since the 1996 By-census will not be conducted until next March, a more updated estimate of the Gini coefficient is not available at present.
Commenting on the diversity in household income distribution in the community, we should place more emphasis on overall economic growth as this provides the prime driving force for improvements to the income of the community as a whole. In the past 10 to 15 years, our economy has maintained a steady growth. Statistics have also indicated that the income of the general public has increased significantly in real terms. For households at the bottom 20% of the income spectrum, their median household income showed an accumulated increase of 237% from 1981 to 1991, far higher than the 116% increase of the CPI(A) over the same period, reflecting substantial growth in the income of these households in real terms. The median income of the middle income households had a more or less similar growth. It was only because the median income of the high income households had a far greater accumulated growth of 270% that resulted in a higher Gini coefficient in 1991 over a decade ago. However, it is obvious from the statistics that the income of every member in each stratum of society has improved with the continued development of the economy in Hong Kong.
We all know that our economy has been undergoing a rapid structural transformation in the past 10 years. Apart from bringing more business opportunities to Hong Kong, it has also provided more employment opportunities to the local workforce. With the change in the requirements of jobs, there has been a greater demand for professional, managerial, supervisory and technical personnel in our economy, This has led to a faster growth in the wages of these jobs than those of the non-skilled ones. The widening diversity in income distribution as witnessed in recent years is attributable to this. Experiences in other places also show that diversity in income distribution tends to widen in an economy with fast development or rapid structural transformation.
Hong Kong is a free market economy. It is a natural phenomenon that structural transformation will bring different economic impacts on different sectors. Through adjustments in demand and supply in the market, naturally there will be different effects on earnings in different sectors. Sectors, in particular, the financial, trade and various service sectors, which have greater development potential and expanded continuously in response to the increase in demand, will correspondingly require more workers. And workers who have the professional knowledge required by these newly emerging sectors will enjoy better employment opportunities as well as faster and higher increases in earnings. Such development precisely reflects the high degree of flexibility of the labour market and of the market adjustment mechanism of the Hong Kong economy.
The Government has a package of consistent policies, such as subsidized education, vocational training and retraining, and job matching scheme, to ensure that everyone has ample opportunity to improve his/her economic conditions. By meeting the needs of economic transformation on the one hand, and helping workers to change employment on the other, the Government ensures that the competent ones will attain higher positions and improve their income and living conditions while society can make the best possible use of its people's talents.
The Government has been providing nine years of free and compulsory education since 1978. The Government's basic principle is to ensure that no one will be denied access to education because of a lack of means. Apart from the nine years of free education, fee remission schemes are also available to ensure that students from low income families may also be provided with education at kindergarten and senior secondary levels. As far as tertiary education is concerned, needy students are eligible for a range of loans and grants. Those from the middle to low income families should benefit from these schemes. The Government, in recent years, has also increased heavily the resources for improvement in education. The present level of investments in education accounts for over one-fifth of the recurrent expenditure, clearly reflecting the Government's emphasis on both the quality and quantity of education.
In addition, the Government, through the implementation of the long established public housing policies, provides housing for needy families. The basic principle is to ensure that no one will be homeless. At present, 51% of the total population are living in public housing. An additional 316,000 units will be available in the coming six years.
As regards social welfare, no means tests are imposed on the majority of social services. These services, therefore, are open for all. In respect of medical services, the Government's current policy is that no one should be denied adequate medical treatment through lack of means. Furthermore, the Government provides a safety net of social welfare for the needy and the disadvantaged.
To sum up, the Government, through subsidized education, public housing, social welfare services, and health and medical services, has greatly improved the living standard of the general public, thus narrowing the income gap in real terms among people from various strata of society. Hence the Gini coefficient calculated from the household income information obtained from a Population Census or By-census cannot reflect the whole picture. We, therefore, should not simply take this figure by itself and ignore the material effects of the concrete measures implemented to improve people's livelihood.
It requires substantial financial and human resources to conduct a Population Census or a By-census. Besides, the general public will be required to spend time in providing the necessary information. So Population Census or By-census should not be conducted too frequently. In addition, the change in the pattern of income distribution is usually relatively slow. It is therefore appropriate to conduct such Population Censuses once in every five years.
The nature and purpose of Population Census or By-census is mainly to collect, on a broader scale, information on the social and economic characteristics of the entire population in Hong Kong, to be used by Government departments as reference in formulating related policies. It is also very useful in assessing overall social changes. Apart from overall information, it also provides information by major category, though relatively general in nature. Such information has already played a role in the formulation and implementation of overall policies. Longitudinal studies are in fact quite different. It is technically incompatible with the various existing statistical work.

It is, of course, in some ways useful to focus longitudinal studies more specifically on some particular issues. I am willing to refer the suggestion to the policy branches concerned to see whether it will help them in formulating policies. However, as regards each of the social problems Mr TSANG Kin-shing mentioned, the various departments concerned at present already possess information on a large number of cases and officers of these departments have been conducting follow-ups on them regularly. To a certain extent, longitudinal studies are in place to help them understand the situation. Nevertheless, I will propose to departments concerned to adopt a more structured approach and conduct more thorough longitudinal studies on the cases.

Thank you, Mr President.

PRESIDENT: I have six names and I will draw a line there. We have already spent an hour and 20 minutes on questions. May I again remind Members to keep the preamble very short or else I will have to regard them as addresses to the Council in the guise of a supplementary and rule them out of order.

MR TSANG KIN-SHING (in Cantonese): Mr President, the Secretary for Financial Services said substantial resources would be required. How much would that be? How many times would that be the costs of renovating the Financial Secretary's house which amounts to $3.8 million? Besides, last night I heard Mr CHEN Zuo-er of the Hong Kong and Macau Affairs Office say that the Hong Kong Government was "speeding" when he was speaking on the issue of social welfare in Hong Kong. Has the Chinese Government interfered with the Government's administration over the issue of social welfare on many previous occasions? Mr CHEN talked about "speeding", but to the grass-roots of Hong Kong, the vehicle is a rickshaw only, and it was rotten rickshaw into which the Government is unwilling to inject any investment. In what manner is the Secretary for Financial Services driving? Is he driving safely or is he pulling a rickshaw at an excessive speed?

PRESIDENT: That strays away from the question, Mr TSANG. I rule the question out of order.

MR ALBERT HO (in Cantonese): Mr President, Hong Kong will be submitting a report on human rights which will include the economic, social and cultural conditions and the conditions of human rights in Hong Kong to the Commission of Human Rights of the United Nations for scrutiny next year. One of the items in the report would be whether Hong Kong has carried out its responsibility to enable everyone to live with dignity. How should living with dignity be defined? I believe the economic development and the gap between the rich and the poor in Hong Kong should be factors which the Commission of Human Rights would consider. I would like to ask whether the Gini coefficient is absolutely useless to the Government as a guideline or reference in the formulation of its social policies which include deciding on the assistance to be provided to those who are most in need, for instance, determining the rate of the Comprehensive Social Security Assistance and deciding whether a more progressive tax system should be introduced?

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, to a certain extent, of course, the Gini coefficient which provides a rough statistical index in income and distribution has its referential value. But concerning the question raised by the Honourable Albert HO just now, the basic approach of the Government in the face of various social problems is to determine what assistance is actually needed by the needy in this free market economy of Hong Kong in terms of housing, welfare, medical services, education and so on so that substantial assistance can be provided and a certain degree of economic growth can be attained for the benefit of every stratum in the community. That is the most important policy approach.

DR LAW CHEUNG-KWOK (in Cantonese): Mr President, I fully agree with the Secretary for Financial Services that the Gini coefficient, which is derived on the basis of data concerning household income collected in censuses, cannot reflect the disparity between the rich and the poor in Hong Kong. In this respect, can the Government inform this Council whether income data which have been collected in censuses will be adjusted shortly to take account of the assistance received and the profits made from the sale and purchase of property and shares by different sectors of the community so that the Gini coefficient can reflect the real situation of disparity between the rich and the poor in Hong Kong more fully? If not, why not?

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, the Gini coefficient has its specific definition in statistics. I have explained earlier that as a very rough index, it cannot reflect the real situation. The so-called transferable income or the social assistance, education or housing services can, in principle or in theory, be quantified to form another index. But if this type of transferable income is to be accurately quantified and survey has to be carried out in every case or every household, a very large sample will be needed, the procedures involved will be very complicated and it will eventually involve some problems of estimation because there is a kind of transferable income which cannot be calculated on an objective standard. Therefore, there are certain practical difficulties.

MR LEUNG YIU-CHUNG (in Cantonese): Mr President, the Secretary for Financial Services indicated in his reply that attention should be paid to economic growth in order to narrow the differences in income between different strata of the community. He also said that because Hong Kong is a free market economy, a lot of things rely on adjustments through market demand and supply. However, we notice that the present situation is that the economy of Hong Kong is continuously slowing down while the number of unemployed is continuously increasing. Will the Government re-examine how to deal with the present situation of economic downturn and the increasing number of unemployed; in particular, considering that no police has ever been formulated to narrow the gap between the rich and the poor, will the Government conduct a review and formulate such a policy now, especially in the face of the present economic changes?

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): I do not wish to repeat the arguments in the main reply, but I would like to quote from the views expressed by the Financial Secretary on the question of equal distribution of wealth in a motion debate in this Council on 2 November 1995 as follows:

"In a free market economy such as ours, we do not set ourselves the objective of a completely even distribution of income. Instead, we set ourselves the objective of trying to ensure that everyone benefits from economic success. That is why our public housing programme provides highly-subsidized accommodation for nearly half of our households. That is why we have adopted substantial welfare measures and have increased welfare spending within our overall spending guidelines ...... Provided we can afford them, we will continue to make improvements to the scope and level of social welfare assistance in our community."

MR HENRY TANG (in Cantonese): Mr President, I would like to seek clarification on one of the figures. The Secretary for Financial Services said in the main reply that figures have been compiled for households at the bottom 20% of the income spectrum, but no percentage figure was spelt out for the high income households. Have figures been compiled for households at the top 20% of the income strata as well? I believe if we can have a comparison, we will have a more accurate picture.

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, the delineation which has all along been adopted by the Census and Statistics Department is to take the lowest 20% as the lower range and the highest 20% as the higher range, with all the rest falling within the middle range.

MR LEE CHEUK-YAN (in Cantonese): Mr President, although the Government has admitted in the main reply given by the Secretary for Financial Services that the gap between the rich and the poor is widening, it has neither admitted the seriousness of the problem nor indicated that it would need to do something to rectify the situation. And it has not said that enough has been done by the Government to narrow the gap between the rich and the poor. Here I have to give a warning to the Government. The problem of disparity between the rich and the poor has become increasingly serious and will certainly affect the stability of the society in the future. It is like turning Hong Kong into a high-speed race car. If this high speed is maintained, the car will certainly crash and the people in it will be killed within the next few years. Therefore, will the Government implement any policy of income redistribution, including introducing changes to the tax system (such as introducing a progressive tax system), implementing the Old Age Pension Scheme and increasing the expenditure on social welfare so as to avoid the car crash and to narrow the gap between the rich and the poor?

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, perhaps I can reiterate what the Government's basic policies are. We are not aiming at achieving an equal distribution of wealth. If we want to solve the inevitable problem of disparity between the rich and the poor, we should maintain our economic growth so as to give those who are earning a relatively low income an opportunity to improve their financial positions and capabilities. That is the most important way to deal with the problem.

PRESIDENT: I have ruled Mr TSANG Kin-shing's supplementary out of order, but in the original supplementary he did ask for some figures which were relevant to the main question. He was asking how much it costs to conduct a census exercise. Can the Secretary supply the figures now or in written form?

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, perhaps I can cite both the 1991 Population Census and the 1996 By-Census as examples. For the 1991 Population Census, $150 million was spent on the basis of the 1988-89 prices. About 110 additional full-time staff were needed and about 16,000 part-time staff were employed. The 1996 By-Census will cost about $185 million on the basis of the 1994-95 prices. It is estimated that an additional 80 full-time and 8,000 part-time employees will be needed at the peak level.

WRITTEN ANSWERS TO QUESTIONS

Community Service Orders

7. MR JAMES TO asked (in Chinese): Last year, an official of the Social Welfare Department stated publicly that it was planning to extend the scope of Community Service Orders so that they could apply to District Court cases as a form of correctional measure. However, this plan has yet to be implemented. In this connection, will the Government inform this Council:

whether there is a specific timetable for the implementation of the plan; if not, what are the reasons; and
whether it has estimated the resources required for the implementation of the plan; if so, what is the estimated amount required?

SECRETARY FOR HEALTH AND WELFARE: Mr President, a Community Service Order (CSO) is a form of sentence provided in the Community Service Orders Ordinance (Cap. 378). The Order aims at being both punitive and rehabilitative. Under the Order, an offender is required to perform unpaid work of benefit to the community under the supervision of a probation officer who also provides rehabilitative counselling and guidance to the offender. Through community service and guidance from the probation officer, the aim is to encourage the offender to gain a more constructive outlook on life and an enriched sense of self-worth. If this is achieved, the offender should be much less inclined to commit further crimes in the future.

The CSO Scheme was introduced in 1987 on a pilot basis and was extended to all Magistrate Courts in 1992. So far, about 2 200 offenders have served CSOs and about 90% completed them satisfactorily. In view of the value of the CSO Scheme, we intend to extend its use to the District Courts in 1997-98, subject to the availability of resources. The extension would cost about $1.9 million per year (at 1995-96 prices).

Personal Allowance for Salaries Tax

8. MR ERIC LI asked (in Chinese): In view of the concern expressed by this Council over the amount of personal allowance for salaries tax, will the Government inform this Council whether, on the basis of the number of taxpayers in 1995-96, it has estimated the respective numbers of persons who will fall out of the tax net if the amount of basic personal allowance for both individuals and married couples is to be raised by 5%, 10%, 15%, 20% or 25%; if so, what are the respective numbers of taxpayers remaining and what are the respective percentages out of the working population of nearly 3 million people; if not, why not?

SECRETARY FOR THE TREASURY: Mr President, based on a working population of roughly 3 million people in 1995-96, our estimate of the number of taxpayers who would fall out of the tax net if the amount of single person and married person allowance were increased by 5%, 10%, 15%, 20% or 25%, and the number of taxpayers who would then remain in the tax net, is broadly as follows:

Increase in basic personal	Number of taxpayers who will drop out of	Remaining taxpayers
allowance	tax net	Number	Percentage of working population
5%	76,000	1 324,000	44%
10%	150,000	1 250,000	42%
15%	221,000	1 179,000	39%
20%	287,000	1 113,000	37%
25%	350,000	1 050,000	35%

Manning Scales for Airport Immigration Control

9. MR PAUL CHENG asked: In regard to the problem of arriving passengers forming long queues to await immigration clearance at the immigration counters at the Hong Kong International Airport, will the Government inform this Council:

of the criteria adopted in determining the manning scales for immigration control at the airport;
when these criteria were last reviewed; and
what measures the Government will take to improve the situation?

SECRETARY FOR SECURITY: Mr President,

The manning level for immigration control at the Airport is based on two factors:
1. the passenger traffic flow, which fluctuates daily depending on flight arrival and departure schedules, and seasonal variations (with higher traffic during festive seasons and holidays); and
2. our performance pledge of clearing 92% of passengers within a waiting time of 30 minutes.
We keep the first factor under review, and make staff deployment changes to meet the changing demand. Under normal times, the number of counters manned is 54 for the departure level and 72 for the arrival level. The number of arrival counters manned can be increased by 12 to 13 during peak periods. Immigration Department can also vary the staffing shifts to cope with daily fluctuations in demand.

The second factor has not been changed since its introduction in 1993. We have been able to meet the performance pledge for 100% of departing passengers, but only 86.4% of the time for arriving passengers during the first eight months of 1995. In September and October, the performance for arriving passengers has improved to 88.9% and 91.7% respectively.
Steps have been taken to improve the situation in recent months. These include:
1. the addition of 44 staff to increase the number of counters that are manned from 116 to 126;
2. adjusting the roster and meal breaks of counter staff over a longer period to maximize the number of counters that can be manned at any one time;
3. referrals of more difficult cases to off-counter, secondary checks in order not to hold up the queue;
4. implementation of a new computer system in end-September to enable us to process machine readable passports by optical scanners. This results in a saving of 20 seconds for each such transaction.
We will be taking the following steps to improve the situation in the coming year:
1. seven more posts created in mid-November will be filled shortly to man one to two additional counters.
2. The Civil Aviation Department is seeking funds to implement a serpentine queuing arrangement (single queue for multiple counters) at the departure level;
3. We have commissioned a consultancy study on the current operational system in order to identify scope for efficiency savings and improvement. The study began in October and will be completed before the end of the year. We will consider further improvement measures in the light of the findings of the study; and
4. The Immigration Department's task force, which was doubled in size from 46 to 92 in October, will be flexibly deployed to reinforce control points during the busy festive seasons.

Sale of New Bank Notes over Face Value

10. DR LAW CHEUNG-KWOK asked (in Chinese): In his reply to a written question which I raised in this Council on 25 October 1995 regarding the Hongkong Bank recent sale of new $20 notes at a price in excess of their face value, the Secretary for Financial Services stated that the action of the Hongkong Bank was not in breach of the Bank Notes Issue Ordinance. It was subsequently known that such transaction was approved by the Hong Kong Monetary Authority (HKMA) and that certain high-ranking officials of the Bank and of the HKMA had also emphasised on different occasions that the profits from the transaction would go to charity. In this connection, will the Government inform this Council whether:

the Hongkong Bank is required to apply to the HKMA before proceeding with the transaction; if so, what are the criteria for approving the application and under which Ordinance is such approval granted;
the Hongkong Bank has provided the relevant government department with receipts certifying that the profits so generated have been donated to charity; if so, whether records of such donations will be made available for public inspection; and
consideration will be given to amending the Bank Notes Issue Ordinance so as to regulate the sale of new bank notes by notes issuing banks at a price in excess of their face value?

SECRETARY FOR FINANCIAL SERVICES: Mr President,

There are no provisions in the existing Bank Notes Issue Ordinance which require the Hongkong Bank or any other note issuing bank to apply to the Hong Kong Monetary Authority (HKMA) before proceeding with the transaction. However, as a matter of practice, the note issuing banks consult with the HKMA on a wide range of matters concerning their note issues. The consultation between Hongkong Bank and the HKMA in this particular instance was part of this established and on-going practice.
The question of donations to charity is entirely a matter for the bank concerned. The Government does not require receipts of the nature described, though donations will in the normal way be reflected in the bank published accounts in due course.
The Bank Notes Issue (Amendment) Ordinance 1995 does contain a provision which enables the Government to impose terms and conditions as necessary on the note issuing banks in the conduct of their note issues.

Bus Accidents

11. MR MARIAM LAU asked (in Chinese): There have been several accidents involving the detachment of wheels from buses of franchised bus companies on the road in recent months, one of which has even resulted in the bus driver concerned being prosecuted by the Police. In view of this, will the Government inform this Council:

of the causes of such accidents;
what measures will be taken to prevent the occurrence of similar accidents in the future; and
of the reasons why bus drivers should be held responsible for such accidents?

SECRETARY FOR TRANSPORT: Mr President, over the past four months, there have been three incidents in which wheels came off buses during service. A Kowloon Motor Bus (KMB) bus was involved in the first incident and a China Motor Bus (CMB) bus in the second incident, whilst the third involved a non-franchised residential bus run by Citybus.

In response to the specific questions:

The three buses involved in these incidents were inspected immediately by staff from the Vehicle Examination Division of the Transport Department. The findings revealed that the first and the third incident were caused by the failure of wheel bearings. The second incident arose because the nut-locking bolt on the wheel had not been fitted properly.
Following discussion with the bus companies, agreement has been reached for the companies to revise their maintenance procedures to tackle this particular problem. The wheel bearings will be changed more frequently whilst bolts on wheels will be checked monthly. Training of technicians and quality control of maintenance works will also be strengthened. On its part, the Transport Department is paying particular attention to bus wheels during regular roadworthiness inspections and daily random checks.
It is for the police to investigate traffic accidents and consider whether and whom to prosecute. In two of the incidents, KMB and CMB have been summonsed for "using a motor vehicle with fittings not in good and serviceable condition". In the CMB case, the police considered that, apart from the bus company, the bus driver should also be held responsible and he was, therefore, summonsed for a similar offence.

Stimulation of Domestic Demand

12. DR DAVID LI asked: It is reported that the volume of retail sales in the first eight months of 1995 and the volume of restaurant receipts in the first half of 1995 have declined by 1.3% and 3.3% respectively as compared with the corresponding figures in the same period last year. There are also signs of a weak demand in other sectors of the service industry which might result in the closure of more business establishments, thereby aggravating our unemployment problem. In view of this, will the Administration inform this Council whether measures are being taken or planned to stimulate domestic demand as a means to avert a further rise in unemployment?

SECRETARY FOR FINANCIAL SERVICES: Mr President, as indicated very clearly by the Financial Secretary in his reply to this Council at the motion debate on 8 November 1995 on measures to stimulate the economy, any arbitrary measures by the Government to counter short-term fluctuations in the economy would be ineffective or counter-productive. On cutting taxes as a stimulus, experience shows that its success in stimulating the economy is doubtful. On increasing public expenditure, the Government should spend money only when there is a real justification and need, and the increase should not be designed just to boost economic growth in the short term. In any case, given the relatively small size of the public sector, the increase in public spending would have to be very large ─too large to be accommodated by our prudent spending guideline ─ in order to achieve any noticeable impact on the economy.

The retail and restaurant sectors have been facing a downturn following a period of booming business in the past few years. It has been our established economic policy that the market process, rather than the Government directing intervention measures, should best be left to adjust to such cyclical fluctuations. This policy will not change. In the longer run, the solution with regard to raising economic growth lies in greater productivity, enhanced competitiveness and greater flexibility, not in more government intervention in the economy.

Governor's Business Council

13. MR ALLEN LEE asked (in Chinese): As the objective of the Governor's Business Council is to examine ways to improve the territory's economy, will the Government inform this Council of the following:

what suggestions the Council has made to the Government to improve the economy since its establishment;
whether the Council has made any suggestions to tackle the present unemployment problem; and
whether the Government has adopted the Council's suggestions, if so, what are the results of implementing such suggestions?

SECRETARY FOR TRADE AND INDUSTRY: Mr President, since its establishment three years ago, the Governor's Business Council has discussed a wide range of issues affecting the economy, including land supply and harbour reclamations, inflation, the Consumer Council's competition studies, retirement protection, the economic implications of the Uruguay Round of multilateral trade negotiations, policy on financial services, promotion of services, container terminal handling charges, double taxation agreements and the recent situation of the Hong Kong economy. Members of the Council have offered valuable comments and advice on all these issues from the business perspective.

The Governor's Business Council has discussed the labour situation in recent meetings. The views expressed by Council members have been helpful in the Government's review of the labour situation in Hong Kong and in the formulation of measures to deal with it.

Supply of Petroleum Products

14. DR SAMUEL WONG asked (in Chinese): Will the Government inform this Council:

of the number of companies presently operating as agents for the supply of petroleum products to petrol filling stations which in turn provide fuels, such as petrol and diesel, to motorists;
whether the prices of petroleum products supplied by these companies are set at a uniform level; if so, whether these companies are offering services on the basis of fair competition; and
how these companies can be prevented from monopolising the market, so as to safeguard the interests of consumers?

SECRETARY FOR ECONOMIC SERVICES: Mr President,

There are five companies supplying diesel fuel and petrol to 178 filling stations operated by 119 dealers.
Currently, the prices charged by four of the companies supplying these products are identical. The prices charged by the fifth company are currently some 3% to 7% lower than those charged by the other companies. The similarity of prices is the result of the companies supplying nearly identical products and having similar cost structures and operating characteristics. The markets for diesel and petrol are price sensitive and each company is conscious of and responsive to the actions of its competitors. Though these factors militate against differential prices, they bring about competition for market share, expressed through advertising, creating product differentiation, and a variety of customer services.
There is no evidence that the interests of consumers are being compromised by the mode of operation of the market for the supply of diesel and petrol. There are five companies operating in the market and evident competition between them. The Government believes that market forces can be relied upon to ensure healthy competition.

Land Premium for Cathay Pacific Airways Headquarters

15. MR LEE WING-TAT asked (in Chinese): With regard to the land granted by the Provisional Airport Authority (PAA) to the Cathay Pacific Airways Limited (CPA) for the construction of the CPA headquarters, will the Government inform this Council:

of the land premium which the CPA is required to pay to the Government;
how the land premium is determined; whether it is determined on the basis of recovering the full market value of the land; and
whether the PAA will make known to the public and the Consultative Committee on the New Airport and Related Projects the land premium paid by CPA; if not, why not?

SECRETARY FOR ECONOMIC SERVICES: Mr President, the airport island at Chek Lap Kok (CLK) will be granted by the Government to the Airport Authority for airport operations, support and airport related uses. Under the Land Grant, the Authority may sub-lease land as and when necessary for airport related development.

Under an agreement reached with Cathay Pacific Airways Limited (CPA) for the construction of its headquarters at CLK, CPA will be granted a sub-lease by the Authority and will be required to pay a premium to the Authority, not to the Government.

Since the sub-lease of land was requested by CPA for a specific purpose, namely, the construction of its headquarters, the land premium was determined through negotiation between the Provisional Airport Authority and CPA. The Authority had worked on the basis of recovering the full market value of the land.

After the sub-lease is executed by CPA and the Authority, it will be registered at the District Land Registry, Islands. Information in the sub-lease including the land premium will be available for public inspection on request.

Slope Stabilization Materials

16. DR HUANG CHEN-YA asked (in Chinese): It is reported that the Singapore Government will conduct a study on a new geosynthetic material which can prevent landslides as the material is capable of strengthening the soil and improving the drainage. In this connection, will the Government inform this Council whether it has done any research on this or other similar materials; if so, what the findings are; if not, whether it will carry out such a research soon?

SECRETARY FOR WORKS: Mr President, the principles of using geosynthetic materials to reinforce and drain soil are well known. The use of such materials to reinforce compacted soil slopes has been in practice in Hong Kong since the mid-1980s. In 1989, the Geotechnical Engineering Office (GEO) published an engineering standard entitled Geospec 2: Model Specification for Reinforced Fill Structures. At the same time, we established an Endorsement Certificate System for the acceptance of proprietary products for use in permanent reinforced fill structures. The GEO has also commissioned a substantial number of studies with a prominent United Kingdom research institute into the engineering properties of various generic types of geosynthetics, to assess their acceptability and permissible design loadings for Hong Kong conditions.

It is not clear from the information provided by the Honourable Member whether the particular geosynthetic material referred to represents a new application of geosynthetics, or whether it is simply a new product for use in known applications. The GEO is following up with enquiries to professional colleagues in Singapore to obtain more information.

Continuing Education for Adults

17. MR TANG YING-YEN asked (in Chinese): With regard to continuing education for adults, will the Government inform the Council:

of the 155,000 adults estimated by the Government who will benefit from some form of part-time education this year, how many will take part in training schemes, part-time courses and distance learning courses respectively;
whether any financial assistance is provided to such schemes or courses; if so, how much is expected to be spent in this financial year; and
whether consideration will be given to offering tax concession to encourage working adults to take part in higher education/professional courses at their own expense, thereby enhancing the quality and competitiveness of our work force; if not, why not?

SECRETARY FOR EDUCATION AND MANPOWER: Mr President,

A breakdown of the 155 490 adults estimated in October 1995 to be benefiting from some form of part-time education in 1995-96 is at Annex A, together with the latest available enrolment figures on training schemes, part-time courses and distance learning courses respectively amounting to 72 181.
A breakdown of the estimated government expenditure on these courses in 1995-96 for the available statistics on student numbers is at Annex B, totalling about $216.82 million; and
During the Financial Secretary's recent consultation with Members of the Legislative Council on revenue measures for the 96-97 Budget, some Members proposed tax concessions to encourage training in respect of employers to provide such schemes or courses to their employees or for employees to attend such training courses at their own expense. These will be carefully considered in the process of formulating the revenue measures for the coming Budget.

Annex A

Estimated number of adults who will benefit

from some form of part-time education in 1995-96

Courses/Institutions	Estimated no. of adult students (based on 1994-95 figures)	Latest available enrolment figures 1995-96
(a) UGC-funded part-time programmes	22 000	Not available until February/March 96
(b) ()Self-financed part-time and distance learning programmes leading to qualifications organized by UGC-funded institutions	35 000	Not available until February/March 96
(c) Distance learning courses offered by the Open Learning Institute of Hong Kong	19 500	20 000
(d) Part-timetraining courses and part-time technical education courses offered by the Vocational Training Council	66 600	41 736
(e) Formal Adult Education Courses organized by Education Department	12 390	10 445
Total	155 490	72 181

Annex B

Estimated Government expenditure on part-time education for adults for 1995-96

Courses/Institutions	Estimated government expenditure
(a) UGC-funded part-time programmes	Not available
(b) Self-financed part-time and distance learning programmes leading to qualifications organized by UGC- funded institutions	-
(c) Self-financed distance learning courses offered by the Open Learning Institute of Hong Kong	-
(d) Part-time training courses and part- time technical education courses offered by the Vocational Training Council	$174.62 million
(e) Formal Adult Education Courses organized by Education Department	$42.2 million
Total	$216.82 million

Notes

Students enrolled in UGC-funded part-time programmes are counted within the target full-time-equivalent (fte) student numbers. Their places are subsidized through the recurrent grants allocated to the institutions by the UGC.
The UGC-funded institutions operate these courses on a self-financing basis, recovering their full direct costs through tuition fees charged to students. No direct government subvention is provided for these courses.
The Government has not provided any recurrent subvention to the Open Learning Institute (OLI) since it became self-financing on its recurrent account in 1993. Nevertheless, in order to avoid passing certain capital costs to the students, the Government has over the year granted $300 million to the OLI establishing specific funds for course development, construction of permanent campus and provision of low-interest loans to students.
Of the $174.62 million to be spent by the VTC on part-time vocational training and technical education of adult students, $26.6 million will be used to subsidize the training courses conducted by VTC's training centre from 75% to 100%. $146.9 million will be spent on the part-time courses conducted by VTC's technical colleges and technical institutes, which are between 50% and 93% subsidized by the Government. Another $1.12 million will be used to cover in general 50% of the costs of the out-centre training courses organized by VTC training boards.
Government subsidises the Adult Education Course (General Background) and the Government Evening Secondary School Course organized by the Education Department at primary and junior secondary levels on a 100% basis. At senior secondary level, the Government pays for 82% of the recurrent costs of these courses. Students who are enrolled in the English Course will, on the other hand, pay the full recurrent costs of the course through fees.

Air Pollution Index

18. LEUNG YIU-CHUNG asked (in Chinese): the Air Pollution Index (API) readings published by the Government have registered new highs in recent days, particularly those taken in Tuen Mun, Yuen Long, Sha Tin, Tai Po, Islands District and Southern District where the levels were forecast to reach as high as 100. In the light of this, the Government has publicly advised people with respiratory and heart problems to avoid outdoor activities. In this connection, will the Government inform this Council:

of the reasons why the API readings are especially high in the above-mentioned districts;
whether it has conducted a survey on the incidence of respiratory and heart diseases on those days when the API readings were particularly high, and whether it has studied the correlation between air pollution levels and the incidence of these diseases; and
whether, apart from giving advice to the public, it has any other measures to assist people with respiratory and heart problems, especially those who need to work outdoors, on the days when the API readings in certain districts are exceptionally high, so as to reduce the chance of such diseases afflicting them; if not, what the reasons are?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President,

The air pollution levels have recently increased generally throughout Hong Kong as a result of the dry weather which tends to cause fine dust and particulates to suspend in the air for a longer time. The areas mentioned in the question have experienced slightly higher dust levels, and therefore higher API readings, because of the level of construction activities in these areas.
We have not conducted a survey as suggested in the question. However, in 1991-92, a study was conducted jointly between the Administration and the University of Hong Kong on air pollution and respiratory health among primary school children. The results showed a positive correlation between the incidence of respiratory diseases and air pollution. Nonetheless, the study also indicated that other environmental factors, such as smoking, would also have to be taken into account. To further our understanding of the relationship between air pollution and health, we draw regularly on the findings of overseas studies and information promulgated by organizations such as the World Health Organization and the Environmental Protection Agency of the United States. Such information indicates that an increase in hospital admissions and the aggravation of symptoms among patients with asthma, allergic respiratory diseases and chronic lung diseases is associated with increased air pollution.
The advice given to the public on days of high Air Pollution Index readings is of a precautionary nature. The present levels of air pollution in Hong Kong will unlikely cause immediate health damage to those who are vulnerable and there is no need for additional protective measures for them although they should, of course, seek medical advice if they feel uncomfortable. To prevent possible adverse health impacts of chronic exposure to air pollution, the Administration proposes to continue to extend the number of industrial processes specified under the Air Pollution Control Ordinance for licensing control, to minimize the impact of dust on air pollution, especially from construction sites, and to control open burning. Our current proposal to require diesel vehicles under four tonnes to be gradually replaced by vehicles using unleaded petrol and catalytic converters will have a substantial impact on air pollution on which we are consulting the public.

Surrender of Home Ownership Scheme Flats

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

of the breakdown of the number of "green form" or "white form" Home Ownership Scheme (HOS) flats owners who surrendered their flats to the Housing Authority in each of the past three years, and whether there is an upward trend in such cases;
of the reasons why these HOS flats owners surrendered their flats; and
whether the Government has considered providing assistance to those HOS flats owners who have surrendered their flats because of financial difficulties but who are facing a housing problem?

SECRETARY FOR HOUSING: Mr President, the number of Home Ownership Scheme flats and Private Sector Participation Scheme flats bought back by the Housing Authority from owners in recent years, under the resale restrctions stipulated in the Housing Ordinance, is set out below:

1992-93	238
1993-94	286
1994-95	214
1995-96	190
(April - September)

No separate statistics are kept on whether these flats were originally purchased by Green Form or White Form applicants.

There is no evidence of a general upward trend. The number of flats bought back each year represents a very small percentage (under 0.5%) of total stock.

Flat owners are not obliged to give reasons for the sale of flats. The major reasons given are financial difficulties, emigration, divorce and changes in family circumstances.

Any such owners who face immediate housing difficulties because of financial problems may apply for compassionate rehousing. Their applications will be assessed by the Social Welfare Department to establish whether there is a genuine and immediate housing need, before recommendations are made to the Housing Department for appropriate housing arrangements.

Ranking of Hong Kong Commissioner Posts Overseas

20. MISS EMILY LAU asked (in Chinese): In his reply to a question in this Council on 22 February 1995, the Secretary for Trade and Industry indicated that the ranking of the post of Hong Kong Commissioner, London was under review but that it would be regraded down to D8 rank on the Directorate Pay Scale. He also indicated that there was no plan to regrade the post of Hong Kong Commissioner for Economic and Trade Affairs, USA. In this connection, will the Government inform this Council -

of the exact date of retirement of the incumbent Hong Kong Commissioner, London; whether the Government has completed the review of the ranking of this post; if so, to what rank will this post be regraded and what is the justification for doing so;
whether the regrading of the post of the Hong Kong Commissioner, London will affect the establishment of the London Office, including the posts filled by staff posted from Hong Kong and those filled by local staff; if so, what are the details; and
when the incumbent Hong Kong Commissioner for Economic and Trade Affairs, USA will retire; whether the Government will consider regrading the post, which is now ranked at D8 on the Directorate Pay Scale, to a lower rank upon the retirement of the present incumbent; if not, why not?

SECRETARY FOR TRADE AND INDUSTRY: Mr President, the incumbent Hong Kong Commissioner, London will complete his posting in December 1996. The future rank of the post is under review and, while no decision has yet been taken, we still think that it will certainly be lower than D8 on the Directorate Pay Scale.

The ranking of the post of the Hong Kong Commissioner, London and the establishment of the London Office need to have regard to the progressive restructuring of the London Office into an economic and trade office by 1997. An exercise to rationalize the establishment of the London Office has already started. During the current financial year, 14 posts have so far been deleted, comprising nine officers posted from Hong Kong and five locally employed officers. Another 12 posts comprising five officers posted from Hong Kong and seven locally employed officers are earmarked for deletion in 1996-97.

The incumbent Hong Kong Commissioner for Economic and Trade Affairs, United States will complete his posting in mid-1996. There are no plans at this stage to re-grade this post because the reasons for creating the post at D8 level continue to apply.

MOTIONS

PUBLIC BUS SERVICES ORDINANCE

THE SECRETARY FOR TRANSPORT to move the following motion:

"That the franchise conferring the right on the China Motor Bus Company Limited to operate a public bus service on the routes specified in the Schedule of Routes (China Motor Bus Company) Order 1995 (L.N. 310 of 1995) and in any subsequent order made by the Governor in Council shall not, for the entire period of the franchise, be subject to sections 26, 27, 28, 29 and 31 in Part V of the Public Bus Services Ordinance."

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

The Public Bus Services Ordinance provides for a profit control scheme which limits the profits that can be earned by a franchised bus operator. Our current policy for processing applications for fare increase is to take various factors into account, particularly operating costs, performance and public affordability rather than provide for a profit level based on a percentage rate of return on average net fixed assets. Therefore, in negotiating new bus franchises, our conscious approach has been to exclude all references to a profit control scheme.

We were successful in adopting such arrangements in China Motor Bus' (CMB) previous franchise and, likewise, CMB's current franchise, which commenced on 1 September 1995, also contains no profit control scheme.

Accordingly, insofar as CMB is concerned, we need to disapply those sections of the Public Bus Services Ordinance governing the profit control scheme whilst retaining those sections which enable the Government to specify depreciation rates in respect of franchise related assets and require the company to produce accounts and other information needed for effective monitoring of its bus operations. The resolution before Honourable Members seeks to give effect to these arrangements.

Mr President, with these remarks, I move the resolution.

Question on the motion proposed, put and agreed to.

FACTORIES AND INDUSTRIAL UNDERTAKINGS ORDINANCE

THE SECRETARY FOR EDUCATION AND MANPOWER to move the following motion:

"That the Factories and Industrial Undertakings (Amendment) Regulation 1995, made by the Commissioner for Labour on 25 October 1995, be approved."

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): I move the motion standing in my name in the Order Paper.

The purpose of moving this resolution and the other two resolutions I am going to move is to provide for consequential amendments to the Regulations under the Factories and Industrial Undertakings Ordinance upon the full implementation of the Builders' Lifts and Tower Working Platforms (Safety) Ordinance.

The Builders' Lifts and Tower Working Platforms (Safety) Ordinance was enacted in April this year. It provides for more specific and effective control over builders' lifts and tower working platforms to protect the safety of workers concerned. The first part of the Ordinance which deals with procedural matters such as registration of equipment maintenance contractors have become effective since July 1995.

However, builders' lifts and tower working platforms also fall under the definition of "hoists" in the Regulations under the Factories and Industrial Undertakings Ordinance. Thus, the equipment are concurrently controlled under the aforesaid Regulations and the Builders' Lifts and Tower Working Platforms (Safety) Ordinance. To avoid overlapping of authority, the amendment to be moved today seeks to transfer the authority vested in the Commissioner for Labour to the Director of Electrical and Mechanical Services who already regulates the safety of passenger lifts and escalators in domestic and commercial premises under the Lifts and Escalators (Safety) Ordinance. Upon these amendments, the remaining parts of the Builders' Lifts and Tower Working Platforms (Safety) Ordinance are expected to come into operation in late December.

This resolution seeks to dispense the requirement of reporting a collapse or failure of builders' lift or tower working platform to a factory inspector as the reporting should be made to the Director of Electrical and Mechanical Services under the Builders' Lifts and Tower Working Platforms (Safety) Ordinance.

Thank you, Mr President.

Question on the motion proposed, put and agreed to.

FACTORIES AND INDUSTRIAL UNDERTAKINGS ORDINANCE

THE SECRETARY FOR EDUCATION AND MANPOWER to move the following motion:

"That the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) (Amendment) Regulation 1995, made by the Commissioner for Labour on 25 October 1995, be approved."

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): I move the standing in my name in the Order Paper.

This resolution seek to change the reference of "hoists" in regulation 18B(1)(c) of the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations to reference to a "builders" life" or "tower working platform".

Thank you, Mr President.

Question on the motion proposed, put and agreed to.

FACTORIES AND INDUSTRIAL UNDERTAKINGS ORDINANCE

THE SECRETARY FOR EDUCATION AND MANPOWER to move the following motion:

"That the Construction Sites (Safety) (Amendment) Regulation 1995, made by the Commissioner for Labour on 25 October 1995, be approved."

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I move the motion standing in my name in the Order Paper.

This resolution seeks to amend the definition of "hoists" in the Construction Sites (Safety) Regulations by excluding builder's lifts and tower working platforms, to add the definitions of a "builder's lift" and a "tower working platform" and to make other technical amendments.

Thank you, Mr President.

Question on the motion proposed, put and agreed to.

BILLS

First Reading of Bills

BETTING DUTY (AMENDMENT) BILL 1995

ESTATE AGENTS BILL

INLAND REVENUE (AMENDMENT) (NO. 3) BILL 1995

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

Second Reading of Bills

BETTING DUTY (AMENDMENT) BILL 1995

THE SECRETARY FOR HOME AFFAIRS to move the Second Reading of: "A Bill to amend the Betting Duty Ordinance."

He said: Mr President, I move the Second Reading of the Betting Duty (Amendment) Bill 1995.

The Bill has three objectives: first, to introduce a Quinella Place bet at the betting duty rate of l1.5%; second, to impose rates of duty in respect of overseas bets on Hong Kong races into the Hong Kong pools at half of the prevailing rates; and third, to transfer the power to make regulations under section 7 of the Ordinance from the Governor in Council to the Secretary for the Treasury.

The Quinella Place bet is an extension of the existing Quinella bet. It requires the punter to select two horses to finish in any order in the first three places to be eligible for a dividend. Since the pool of the Quinella Place bet has to be split three ways, the bet will be introduced at the lower betting duty rate of 11.5% to make it financially viable. The Administration considers that its introduction would sustain punters' interest in horse racing, but would not induce non-punters to start betting. The resultant increase in government revenue from betting duty is estimated at $760 million per annum. Clause 2 of the Bill amends section 6(1)(a) to include the Quinella Place bet.

At present, there are separate betting pools on Hong Kong races in Canada and the west coast of the United States, and the betting duty goes to the respective governments. The Royal Hong Kong Jockey Club proposes that the Hong Kong Government should allow the acceptance of overseas bets into the Hong Kong pools at half of the prevailing rates. The other half will be allocated to the respective host governments, subject to the Club's negotiations with them. This proposal aims to tap the overseas markets. It will not have the effect of encouraging gambling in Hong Kong. Government revenue from betting duty on overseas bets from North America is estimated at over $100 million per season. In addition to betting duty, Hong Kong will benefit in terms of an increase in the allocation of funds from the Hong Kong Jockey Club to local charities. Clause 2 of the Bill amends section 6(1) of the Ordinance to impose rates of duty in respect of overseas bets at half of the prevailing rates.

The power conferred under section 7 of the Ordinance relates to the making of regulations to govern the manner for the collection of betting duty. It is minor in nature and is rarely exercised. It is proposed that the aforesaid power should be transferred from the Governor in Council to the Secretary for the Treasury, in line with prevailing practice. Clause 3 of the Bill amends section 7 of the Ordinance to achieve the above purpose.

Mr President, the Bill imposes rates of duty in respect of the Quinella Place bet and the overseas bets on Hong Kong races into the Hong Kong pools. The Bill is in line with our gambling policy and will result in additional betting duty which could be allocated to Hong Kong's social services. I recommend the Bill to Members.

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).

ESTATE AGENTS BILL

THE SECRETARY FOR HOUSING to move the Second Reading of: "A Bill to provide for the establishment of a body to be known in the English language as the Estate Agents Authority and in the Chinese language as " 地產代理監管局" and to define its functions, for the licensing of estate agents and certain salespersons, the regulation of estate agency work and certain agency agreements, and for matters related or incidental to the foregoing."

He said: Mr President, I move the Second Reading of the Estate Agents Bill.

The purpose of the Bill is to improve the standard of services provided by estate agents and to give greater protection to consumers involved in property transactions, thereby also enhancing the image and status of the trade.

The Bill has its origins in a Working Group established in late 1993, with representatives from the Government, the trade, the Law Society, the Consumer Council and the Independent Commission Against Corruption and others, in response to growing public concern about malpractice by some estate agents. The Working Group's recommendations were published for public consultation in late 1994 and they received wide support. The Government has accepted the recommendations generally.

The Estate Agents Bill 1995 now presented to this Council seeks to:

-first, set up a licensing and regulatory system for the trade, through the establishment of a statutory, self-financing Estate Agents Authority and a licensing system for estate agents;

- second, define the duties of estate agents, which include duties to provide essential information about a property to a client, to inform a vendor of any offer made, to fully disclose his interests, and to conduct transactions in a fair, open and honest manner;

- third, ensure that estate agents meet certain standards of competence such as those related to education, qualifications and working experience, and regulate their conduct and practices;

- fourth, provide sanctions against estate agents for non-compliance;

- fifth, provide a venue for aggrieved consumers to complain about estate agents' unsatisfactory services or malpractices;

- sixth, provide a channel for settling disputes relating to the payment of commission or fees to an estate agent by a client;

- seventh, set up an independent appeal panel to handle appeals against the decision of the Estate Agents Authority on licensing matters; and

- lastly, permit the EAA to make regulations and rules, subject to the approval of the Secretary for Housing.

In order to ensure impartiality, Mr President, EAA members will be drawn from the trade, related professions and the community. Representation from the trade will not exceed one third of members, excluding the Chairman and the Vice-chairman.

I would like to point out that the proposed licensing system will be introduced in a gradual and planned manner to ensure that it will not cause unnecessary anxieties in the trade or disruption of service to the public. Initially, transitional licences will be issued. There will be sufficient time for estate agents to meet the full licensing requirements to be set by the EAA.

Mr President, I beg to move.

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).

INLAND REVENUE (AMENDMENT) (NO. 3) BILL 1995

THE SECRETARY FOR THE TREASURY to move the Second Reading of: "A Bill to amend the Inland Revenue Ordinance."

SECRETARY FOR THE TREASURY (in Cantonese): Mr President, I move that the Inland Revenue (Amendment) (No.3) Bill 1995 be read a Second time.

It is our policy to include provisions on double taxation relief for airline income into the Air Services Agreements which we have negotiated with our bilateral aviation partners on a case by case basis, subject to the endorsement of the Chinese side. Due to the international nature of their operations, airline operators are more prone to double taxation than other taxpayers. The taxation of income from aircraft operation is a "grey area" because the income is mainly derived from activities carried on in the "no man's land" of international air space. This makes it difficult to allocate, on a meaningful basis, income amongst the countries visited in the course of an international flight. For this reason, many countries have introduced special rules for computing an airline's income, particularly for non-resident airline operators.

Unlike Hong Kong which adopts a territorial source principle, most countries tax their residents on a worldwide basis. It is therefore common for airline operators to suffer double taxation. To address this, many countries seek to conclude double taxation agreements on airline income which give them exclusive taxing rights in respect of their resident airlines.

By virtue of the double taxation relief article we seek to include in the Air Services Agreement, Hong Kong will tax the income generated from international traffic of Hong Kong airlines derived from an agreement country and which has been granted full tax relief by that country. In return, we will forgo the right to tax the income of airlines of the agreement country derived from Hong Kong if such income is subject to tax in the agreement country. This will mean that Hong Kong airlines will pay tax only in Hong Kong, which in general has a lower tax rate, on income attributable to an agreement country. They will also benefit from not having to deal with the tax authorities in an agreement country. We are currently discussing and negotiating such arrangement with various countries.

The Inland Revenue Ordinance at present only allows us to tax income that is sourced in Hong Kong. The Bill therefore seeks to enable us to tax the income of Hong Kong airlines which is earned from international traffic attributable to an agreement country.

The Bill also introduces miscellaneous amendments to update the Ordinance, to rectify minor irregularities and to adapt the Ordinance to ensure compatibility with the Basic Law.

Mr President, with these remarks, I commend the Bill to Members.

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).

MERCHANT SHIPPING (REGISTRATION) (AMENDMENT) BILL 1995

Resumption of debate on Second Reading which was moved on 15 November 1995

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

Bill read the Second time.

LANDS TRIBUNAL (AMENDMENT) BILL 1995

Resumption of debate on Second Reading which was moved on 2 November 1995

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

Bill read the Second time.

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

Committee Stage of Bills

Council went into Committee.

MERCHANT SHIPPING (REGISTRATION) (AMENDMENT) BILL 1995

Clauses 1 to 4 were agreed to.

LANDS TRIBUNAL (AMENDMENT) BILL 1995

Clauses 1 to 4 were agreed to.

Council then resumed.

Third Reading of Bills

THE ATTORNEY GENERAL reported that the

MERCHANT SHIPPING (REGISTRATION) (AMENDMENT) BILL 1995

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

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

Bill read the Third time and passed.

THE SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS reported that the

LANDS TRIBUNAL (AMENDMENT) BILL 1995

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

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

Bill read the Third time and passed.

MEMBER'S MOTIONS

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR EDWARD HO to move the following motion:

"That the Buildings (Administration) (Amendment) (No. 3) Regulation 1995, published as Legal Notice No. 466 of 1995 and laid on the table of the Legislative Council on 25 October 1995, be repealed."

MR EDWARD HO: Mr President, I move the motion standing in my name on the Order Paper.

The Buildings (Administration) (Amendment) (No. 3) Regulation 1995 seeks to increase the fees for the inclusion, retention or restoration of names in the authorized persons' register, the structural engineers' register, the contractors' register or the register of ventilation contractors by about 9%.

The Subcommittee of which I was elected Chairman was formed to study this Regulation and the Marine Fish Culture (Amendment) Regulation 1995. The Subcommittee has held two meetings with the Administration.

The Administration has clarified that the actual total revenue collected in 1994-95 was $5.237 million, and not $22 million as advised earlier. It is anticipated that the revenue for 1995-96 will be $6 million.

The Subcommittee has pointed out that since the total costs for providing the services in 1994-95 amounted to only $3.152 million, while the revenue collected for that year was $5.237 million, the figure clearly indicates that there was an over-recovery of costs of more than $2 million by the Administration. The Administration argues that the costs of $3.152 million was only an estimate used to calculate the fee level when the fees were last revised in November 1994. It has not been able to provide actual costs for 1994-95 since the costing exercise is conducted once in every four years. The Administration further explains to us that about two thirds of the fees collected in 1994-95 were fees for the retention of names in the registers for three years, that means, quite a substantial amount of fees paid in advance.

The Subcommittee has reservation about the Administration's explanation. Under the circumstances, the work involved for operating and maintaining the registers in the following years would be substantially decreased, hence the projected costs would be correspondingly reduced. While there is still an anticipated revenue of $6 million in 1995-96, the Administration will be over-recovering the costs. The Subcommittee therefore opposes the proposed increase in fees and agrees that the said Regulation should be repealed.

Mr President, I beg to move.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Buildings (Administration)(Amendment)(No.3) Regulation 1995 seeks to increase the registration fees of the authorized persons, the registered structural engineers, the registered contractors and the registered ventilation contractors by about 9%. In terms of the amount of payment, the proposed increase in fees will range from $40 to $790, and a large proportion of which is the fees for restoration of names in the registers for which the persons concerned have to pay $40 to $75 more each year. Compared with other operating costs of the construction industry, the proposed increase is only a minimal figure. It will neither affect the operation of the construction industry nor cause any difficulty to the architects, structural engineers, contractors and ventilation contractors.

The only reason for the proposed increase in fees is to recover the costs incurred for maintaining the registers according to the Buildings Ordinance and the related subsidiary regulations. Some Members queried whether we are over-recovering the costs from the fees charged. The answer is definitely in the negative. It is undeniable that in 1994-95, the revenue we collected was about $5.2 million, while the amount of expenditure was around $3.2 million. However, we have to understand that in 1994-95, some new registration arrangements began to be implemented and as a result, a lot of people came for the new registration procedures. Among these people, the majority have registered or three years. So in the following two years, we still have to keep on paying various kinds of fees, for example, the fees required for gazetting the registers annually. The revenue during that period of time will thus decrease due to fewer number of people coming for registration. Hence, the excess of income over expenditure is only temporary. The Government is merely recovering all the costs incurred for managing the registration for three years in advance.

There is only one result for refusal to adopt this amended regulation, and that is the taxpayers will have to subsidize the commercial organizations and the profit-making companies to the benefit of some 3 200 architects, engineers and contractors. Those who are engaging in these businesses are already financially capable and do not require any subsidy from the Government or the public to maintain their operations.

Mr President, I would also like to ask sincerely: will the waiving of this adjustment to the registration fees do any help to the society and people's livelihood? Mr President, I hope that Honourable Members will vote against this motion.

SECRETARY FOR THE TREASURY (in Cantonese): Mr President, earlier on, the Secretary for Planning, Environment and Lands has explained the background and the justification for this fee adjustment. Two days ago, the Director of Buildings also provided Members with detailed calculations of the costs and revenues in a letter sent to all of them. All the figures have shown that this item of service charge has not been set above the total costs.

In this legislative year, Members have altogether frozen 13 charges levied by the Government already, resulting in a loss of public revenue amounting to some $39 million. Freezing the charges levied by the Government will force the Government to subsidize the services concerned, including those who do not need any assistance from the Government. This approach, which is contradictory to the "user pays" principle, is certainly unfair to the taxpayers. Freezing the charges levied by the Government will also make our financial management less flexible, affecting, for instance, some tax remissions originally planned.

I hope Members will negative this motion because of these reasons.

MR EDWARD HO (in Cantonese): Mr President, the Subcommittee set up to study this regulation is opposed to the principle and the substance of this regulation. Perhaps let me briefly relate what has transpired at the two meetings.

In the first meeting which was held on 7 November, the Administration advised the Subcommittee that the annual cost incurred would be $22 million. We felt very strongly about this at the time because we would never have thought that the registration of some 3 000 people would require $22 million. However, in the second meeting held on 17 November, the Administration told us that they had made a mistake in the first place and that the cost for 1994-95 only amounted to $3.15 million. This is so big a mistake! Does the Administration think that every time it asks for a fee increase, this Council will only act as a "rubber stamp" and will certainly grant approval without taking anything into consideration? Fortunately, Members of this Council are very discreet and a Subcommittee is set up to study this regulation. Having been provided with the necessary information, we nevertheless noticed another problem. It turned out that while the cost for 1994-95 is some $3 million, the Government has, in fact, over-recovered more than $2 million after deducting the cost from the revenue collected.

I would like to respond to the arguments of the Government. First, as I have mentioned in the previous speech, if two thirds of the persons concerned have paid in advance the fees for three years, the Government will not have to verify the qualifications or other information of these people in the two following years, in which case the cost should be reduced. For this reason, we oppose this proposal of a fee increase today. I must point out that we oppose this proposal of the Government not on account of the affordability of the people in the trade. They can, of course, afford the payment. Besides, we cannot relate people's livelihood to this matter because we are now looking at the principle of the matter in question. While we support the cost recovery principle, I think it is worthwhile for colleagues to seriously contemplate a number of points and learn from them.

First, the Government is saying that it is necessary to recover the cost. However, members of the public are in no position to monitor the Government in terms of control over the cost. Take the management of a register for a mere 3 000 people for an example. Is this a task necessarily to be handled by senior officials or is this something that general clerks are already capable of doing? Another example is that the Government is telling us that there is plenty of work to be done. If the address of an architect is changed, amendments will have to be made in the register accordingly. However, is this something which must be handled by professional staff? We found this questionable. Is it that the Government can always maximize efficiency and achieve cost-effectiveness? My view is that this regulation has made us realize that we have to be very careful in the deliberation over matters concerning the charging of fees.

Secondly, as the costing exercise is conducted by the Government once every four years, even the Government itself does not know how much the cost is. Given that we have up-to-date computer technology and proven cost control, cost accounting practices and so on, why is the costing exercise conducted only once every four years? The Government should indeed conduct a review in this regard.

Thirdly, I have the feeling that every time the Government tables a fee increase proposal, it has already presumed that we would accept everything that is proposed unconditionally. This proposal, for example, evidently shows that the revenue collected already exceeded the cost. If the Government is to propose a fee increase in the next session and is able to prove to us then that it is working with the highest possible efficiency and the cost is reduced to the lowest level, I think we would be very happy to reconsider or even approve the fee increase.

Mr President, in view of the many problems that have arisen, we have much reservations about this regulation. Therefore, we hope that colleagues will support my motion to repeal this regulation.

PRESIDENT: Mr James TIEN, is it a point of order?

MR JAMES TIEN: Mr President, I would like to ask for your ruling on whether Members are now allowed to speak or not.

PRESIDENT: No Members are permitted and no Public Officers are permitted to speak after the final reply.

Question on the motion put.

Voice votes taken.

THE PRESIDENT said the "Ayes" had it.

PRESIDENT: Mr LAU Chin-shek, is it a point of order?

MR LAU CHIN-SHEK (in Cantonese): I claim a division.

PRESIDENT: Are you claiming a division? I am sorry. I have already declared that the "Ayes" have it.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR ALBERT CHAN to move the following motion:

"That the Television (Royalty and Licence Fees) (Amendment) Regulation 1995, published as Legal Notice No. 479 of 1995 and laid on the table of the Legislative Council on 2 November 1995, be repealed."

MR ALBERT CHAN (in Cantonese): Mr President, I move the motion standing in my name on the Order Paper. This motion seeks to repeal the Television (Royalty and Licence Fees)(Amendment) Regulation 1995 under Section 34(2) of the Interpretation and General Clauses Ordinance.

This Council agreed on 3 November to from a subcommittee to examine the Television (Date of Renewal of Licence)(Asia Television Limited) Order 1995, the Television (Date of Renewal of Licence)(Television Broadcasts Limited) Order 1995 and the Television (Royalty and Licence Fees)(Amendment) Regulation 1995.

The subcommittee held two meetings with the Administration, and having examined the proposals submitted by the Asia Television Limited (ATV) and the Television Broadcasts Limited (TVB), Members of the subcommittee unanimously supported the orders for the respective dates of renewal of licences. However, most of the Members questioned the Television (Royalty and Licence Fees)(Amendment) Regulation 1995. The Regulation stipulates that the licence fees ATV and TVB having to pay will be increased from $1,000 a year to $1.04 million a year, with effect from 1 December 1995, which means an increase of 100 000%. Moreover, the licence fees that are to be paid after 10 years will be as high as $10 million, rising simply at the speed of a rocket.

The subcommittee is very much concerned that the huge increase in licence fees will bring about tremendous financial pressure on the broadcasters. This is because apart from the licence fees, the Government also collects royalties. Take the year 1994-95 as an example. The royalties paid to the Government by TVB and ATV were as high as $210 million and $57 million respectively. It will be even more backbreaking for the broadcasters should the two television broadcasters be required to pay the licence fees which are both expensive and rapidly increasing, in addition to the huge amount of royalties to be paid!

Although the subcommittee supports in principle the policy that licence fees should be pitched at a level to recover the full costs, in the implementation of this policy, we have to note that the policy ought to be implemented under reasonable and fair circumstances. Should it deviate from these two principles, it would only encourage the Government's practice of increasing fees unscrupulously. Therefore, in putting into practice the policy of recovering the costs of licence fees from broadcasters, we should treat all the broadcasters on equal terms, and we must not increase the licence fees of some broadcasters substantially, while remaining undecided as to whether or not the fees for some other broadcasters should be increased, or when they should take effect, for if we do, it will create unfairness.

Under the present policy, in the course of the interim review for individual broadcasters, the Administration will recover the costs of these licences according to different timetables. Such an arrangement is really unfair. I have provided honourable colleagues with a table just before the meeting. It clearly shows the differences in licence fees for the various television media, including TVB, ATV, Star TV and Cable TV. At present, the licence fees for TVB, ATV and Cable TV are invariably $1,000, while it is $46,000 for Star TV. However, according to the Government's proposal, the fees pitched to recover the full costs for TVB and ATV after 10 years will be $10 million, whereas there are still neither timetables nor charging schedules for Cable TV and Star TV. Moreover, on the question of royalties, just now I have mentioned that TVB had already paid more than $200 million and ATV more that $57 million for the year 1994-95. However, Star TV was only required to pay $1 million as the service fee, and Cable TV a mere $1.52 million. Therefore, there is obviously a major discrepancy with regard to the overall financial obligations.

Furthermore, from the Government's cost analysis data, the subcommittee has found that there seems to be some discrepancies in the calculations regarding the recovery of costs of various licence fees. In other words, as to what exactly the costs should be is still subject to debate. The subcommittee recommends that this matter should be referred to the Financial Affairs Panel for further studies. Not only is this Regulation to increase the licence fees unfair, but it is also unreasonable in certain aspects; should we support this Regulation, it would be against the principle of fairness and reasonableness that we have been insisting on.

There is a view that since this fees increase will not increase the burden of consumers, it should be approved rather than subsidizing the broadcasters with taxpayers' money. Such a remark is only half right. Since the fees increase in question will not directly increase the burden of members of the public, we should be even more cautious when considering whether or not the increase is fair and reasonable. If we support whatever fees increase which does not concern the people's livelihood regardless of whether the increase is reasonable, we would be committing the same mistake made by those who "oppose whatever fees increase" and neglecting the principle of fairness as well as justifiable grounds!

In view of the fact that the Administration will conduct a review on the deregulation of the pay television market in the first quarter of 1996 and a comprehensive study on our broadcasting policy, most Members of the subcommittee are of the view that the above Regulation should be repealed at this stage, and further examination will be made after the result of this review is known. As to the questions of whether or not the licence fees should be increased, how much the increase should be and when the fees increase should take effect, these should be in keeping with the principle that all parties should be treated on equal terms and that everything should be fair and reasonable.

The recommendation of the subcommittee was submitted to the House Committee for discussion on 24 November, but it did not win the support of most of the Members who were present. Nevertheless, most of the Members of the subcommittee are of the view that the recommendation to repeal the fees increase Regulation should still be submitted to this Council for examination, and that Members be urged to support the recommendation.

Mr President, I so move the motion.

Question on the motion proposed.

SECRETARY FOR RECREATION AND CULTURE (in Cantonese): Mr President, I am really surprised and disappointed at the motion moved today. The Government has spent a considerable amount of time explaining to Members the case for introducing the full cost recovery licence fees for Asia Television Limited (ATV) and Television Broadcasts Limited (TVB). I would reiterate the salient points now.

A licence to broadcast confers both power and privilege: the power to influence the public and the privilege to seek profit under a restricted competitive environment. The public has a right to expect that the exercise of the power and the privilege is properly regulated to prevent unfair exploitation. This is the purpose of licensing. Effective licences must be drawn up carefully and enforced properly. The Government has to recover the costs incurred from licence fees because it has to administer the issue of licences and monitor the television companies to ensure that they observe the conditions laid down in their licences. That is why we have to recover the costs incurred through an increase of licence fees. It is only fair that the licensees, not taxpayers, should foot the bill for preparing and administering the licences from which they derive a commercial benefit.

Moreover, full cost recovery licence fees do not yield a profit for the public purse. They merely seek to recover the expenses from commercial enterprises. As the new fees will not be passed on to the public, they will have no impact on the people's livelihood. However, if the Regulation is repealed, it is the public which will lose out. Money which would have been available to fund additional services or contribute to our reserves will have to come from our taxpayers.

Some Members questioned why full cost recovery licence fees could be introduced at the same time for all broadcasters. The answer is clear. A licence is an agreement between the licensing authority and the licensee for a fixed term. There is a provision for changes to be made through negotiation by both parties in the mid-term review of each licence. Unless the conditions are fully justified, it would be unreasonable for either party to impose any changes unilaterally.

These licence fees are not imposed unilaterally on the television companies. They have been negotiated in good faith as part of a package of amended conditions. Some of the conditions are proposed by the Government, and some of them by the television companies. It is really unreasonable that the television companies are attempting to revoke part of the deal they have previously accepted. If their lobbying efforts prove to be successful, it will certainly weaken the Government in future negotiations when it seeks to secure the best deal in the public interest.

Both television companies have sought to link the issue of licence fees with the royalties they paid out of advertising revenue. They argued that because of the increase in competition they face, the royalty rate should be reduced. It is also suggested that the introduction of full cost recovery licence fees should be deferred until we have completed our review on the deregulation of subscription television. I cannot see the logic of that argument because the review will not have any effect on the need of the licences or the cost of providing them.

Indeed there is not necessarily a connection between royalty rate and licence fees. But in case some Members feel sympathetic to the plight of the television companies, let me point out just how reasonable we have been. First, we reduced the effective royalty rate by 2% in October 1993. Secondly, we considered further reducing the rate in December 1994 but concluded that the impact of additional competition did not materially affect their advertising revenues. Wharf Cable Television does not show any commercials while the impact of other international broadcasters on their advertising revenues is negligible, particularly as most of the programmes are in English and not Cantonese. Thirdly, we have said that we are prepared to look at royalties paid by the two television companies again if the outcome of our review on the deregulation of subscription television shows that their operating environment is significantly affected.

Finally, Mr President, I should like to point out that for the sake of public interest, it is only fair and reasonable to ask the two television companies to bear the costs of their licences. We have also considered the financial position of the television companies and so we are not asking the companies to pay the full costs now, or next year, or the year after that. In fact, under the proposal submitted Members today, a whole decade is allowed before ATV and TVB have to meet the full costs of television licences. I urge Members to oppose the motion.

Thank you, Mr President.

MR ALLEN LEE (in Cantonese): Mr President, I would like to talk about the licensing conditions for the two television broadcasters, namely, Television Broadcasts Limited (TVB) and Asia Television Limited (ATV). When the Broadcasting Panel was set up, one of its major tasks was to review the licensing conditions of the two television broadcasters. I was the Chairman of the Panel. I would like to tell the Secretary for Recreation and Culture and the relevant officials how licence fees and royalties were determined.

Before 1988, royalties were calculated on the profits of the company at a rate of 25%. After lengthy studies and discussions with the two television broadcasters, the Panel was of the view that the paying of royalty by just one of the two licensees should not continue. (At the time only TVB paid, but ATV did not because it was losing money.) The ground for this view was that both are television broadcasters and therefore both should pay royalties. We also conducted a review on licence fees but did not find the review meaningful as only a nominal amount of $1,000 was charged for the issue of licence. What was agreed upon by all parties was that the Government should collect the due amount of royalties. As one can see, over the years, the Government has collected a significant sum.

If Members are not clear about how the decisions were then made, I would like to give an explanation now. I believe the Secretary for Recreation and Culture may not be clear about the same either and I hope he could go over past records to find out why licence fees and royalties were separately dealt with and why it is meaningless to increase licence fees to whatever amount from $1,000. The licences were granted to the two broadcasters in consideration of the royalties paid. The licensees were not entirely happy with the arrangement then. Once the decision was made about licensing arrangements, we calculated the royalties on the total income from advertising. We promised to review the matter after six years and the licence covered a period of 12 years.

Recently, the Government often mentioned the policy of cost-recovery, but is royalty part of the recovery exercise? Why does the Government want to make so much money? Is such a huge sum recovered costs. I feel that "cost-recovery" has become part of the language of the Government. Now, whenever, the Government wants an increase in fees, it does so on the pretext of cost-recovery or on the ground that tax money should not be used to support commercial organizations, which can hardly stand as a good ground. Over the years the Government has created a large amount of surplus and reserves. Where comes the money? It is all tax-payers' money. With all the fortune it presently made, the Government still want to impose taxes and increase fees and charges.

I feel there is gross unfairness in the licence fees arrangement for the television broadcasters in that the arrangement runs against the decisions of the Broadcasting Panel. What is at issue is not the increase from $1,000 to $1,000,000 or any other amount. The point is the original decision was to charge licence fees by way of royalties. So, I hope colleagues can give careful considerations to the matter: we had certain undertakings with the two television broadcasters and we should not now turn to lobby support for the Government's proposal on the pretext of cost-recovery or of protection of commercial interests. That fact is: with no profits available, ATV has to pay over 50 million dollars to the Government. Members should take into careful consideration of the conditions under which the licences were granted. These conditions should not be altered in 12 years. The pretext of cost-recovery is hardly convincing.

Mr President, I support the proposals put forward by the Honourable Albert CHAN and the Subcommittee.

MRS SELINA CHOW (in Cantonese): Mr President, I was very surprised to hear the Secretary for Culture and Recreation say that he was surprised and disappointed. I was surprised and disappointed, too, because the Subcommittee had already expressed certain views to the Government during the examination period. Therefore, he should not have been caught by surprise but should have anticipated them as our attitude has always been very clear. We are not dealing with this particular fee alone. Even for other fees, we also have a major principle to follow and we have repeatedly made ourselves clear.

First of all, I have to clarify that I have no connection with the subsidiary legislation under discussion now and therefore need not declare my interest. But I believe that there is no need for me to declare that I have very close relationship with the television industry, as this is well-known to everybody. My speech today is on the unfairness and partiality of the Government's policy on the broadcasting industry from a macroscopic point of view.

We have to look at a few facts first before we can consider objectively whether the Government's fees increase demand is justified:

In 1994-95, the royalty paid by the Television Broadcasts Limited ("TVB") to the Government was over $216 million while the royalty paid by the Asia Television Limited ("ATV"), still running at a loss, was $57.8 million.
Although the Cable TV and the Satellite TV are competing with TVB and ATV for audience in Hong Kong, the licence fees paid by the former were only $1,000- and $40,000-odd respectively. Now the licence fees paid by the two television companies are to be increased from $1,000 to $1.04 million and that is not a fixed amount. It is to be raised annually ─ three years later it will be over $4,000,000 ─ until it ultimately reaches the amount of over $10 million, which is the total recovery of the costs. Of course, this is only based on today's price level and we are yet to know whether it will be adjusted according to the inflation rate or the actual expenses.
The two television companies have written to the former Financial Secretary and the Deputy Secretary for Culture and Recreation in objection to the Government's determination of their licence fees which is based on the total recovery of costs theory. They consider that as the companies have already contributed a total of $270 million in royalty to the Treasury, the one-thousand-time licence fee increase proposed by the Government is not only far too high and unreasonable but also unfair. They hope that the Government will also consider this issue when it reviews the overall television industry. In fact, the market environment of the television industry's operation is constantly changing and the market for the paid television will be further relaxed next year. The consultant report on this review will be completed in January next year and submitted to this Council for examination. The Government has also indicated to the Culture and Recreation Panel that by the end of May, that is, before the expiry of the franchise of the Cable TV, it will make a further decision on its policy.

The so-called recovery of costs policy is a new policy which has not undergone any consultation or detailed explanation in recent years. To have an adequate discussion on this policy, this Council has intended to dig deeper into it in the meeting of the Financial Affairs Panel.

Recently, the Government has been incessantly claiming that if the costs cannot be recovered, the result will be taxpayers subsidizing services users. This is exaggeration to generate fear. It is necessary to clarify that the Liberal Party considers that under the present situation where the Government is financially well-off while the economy is sluggish, the Government is fully capable of postponing the increase. The one who pays is not the taxpayers but the Treasury and the Treasury has ample revenue because the Financial Secretary has charged more than enough from the public in various ways in the past. And now we are only asking for a temporary relaxation. Why should the Government be so stingy?

When examining fees increase proposals, the Legislative Council ought to ensure that the increase is fair and those affected will not have to bear a double burden. This increase of the broadcasting business charges is neither fair nor reasonable and is also another heavy burden on top of the heavy advertising royalty. I hope that my colleagues here will not eye this charge as simply something having nothing to do with the people's livelihood and so accept the proposed increase but will consider objectively the reason behind and its acceptability. I hope that Members will support the Honourable Albert CHAN's motion to freeze this increase.

MR ANDREW CHENG (in Cantonese): Mr President, I am the Democratic Party spokesman on recreation and culture policy. I would like to spend a few minutes to talk about the position of the Democratic Party on the Honourable Albert CHAN's motion.

The Democratic Party has a very clear and firm position on repealing the Television (Royalty and Licence Fees) (Amendment) Regulation 1995. The Government thinks that since the broadcasters have occupied the air waves for commercial purposes, their licence fees should be recovered in full-cost, and that they should not be subsidized by taxpayers. In fact, the Democratic Party does not oppose the principle on this issue. However, we have to emphasize that the Government should consider the following principles when implementing the cost recovery policy on licence fees:

the implementation of the cost recovery policy must be fair;
the cost-calculating method must be reasonable;
the cost recovery policy must co-ordinate with the overall broadcasting policy.

Mr Albert CHAN and the two Members who have just delivered their speeches have expressed the opinions of the Subcommittee. Among those views, "equity" and "reasonableness" are the principles which the Democratic Party always emphasizes, and I do not want to repeat the points concerned. I would like to put forth the ideas of the Democratic Party on the third point only, that is, the cost recovery policy must co-ordinate with the overall broadcasting policy.

Mr President, the broadcasters in Hong Kong are classified into three types, namely, terrestrial TV , including Asia Television Limited (ATV) and Television Broadcasts Limited (TVB), satellite TV and cable TV. All the broadcasters have to pay different business taxes, royalties or programme fees to the Government. If there is a substantial increase in the licence fees , and together with the royalties that the broadcasters have to pay to the Government, their operation may be seriously affected. Therefore, when considering the rate of increase of the licence fees, the financial situation and the competition among the broadcasters should also be taken into consideration, so that the broadcasters do not have to face the keen market competition and pay hefty royalties and licence fees. The Democratic Party thinks that it would be unreasonable otherwise.

Mr President, in the eyes of the Democratic Party, there are important changes pending in the broadcasting environment. On one hand, the subscription television will soon put into operation, the broadcasters will face even more fierce competition; on the other hand, the present broadcasting legislations have not yet settled on. The clauses on different broadcasters' licences, licence fees or service charges are now provided under different ordinances. The Telecommunication Ordinance and the Television Ordinance, and but two examples. If there is now a substantial increase in the licence fees, obviously, the broadcasting environment which is going to be changed has not been taken into consideration. Concentrating only on the substantial increase in fees, and delaying the progress of the consolidating Broadcasting Bill, the Democratic Party thinks that this is not something that an accountable government should do. Recently, in replying to my written question, the Government declared they have to consult the Chinese side first on the culture and recreation policy, and I think this is not unreasonable. However, this Council is not very clear about the content of the consultation and the overall policy. Under such circumstances, we feel that the culture and recreation policy of the Government is caught in a dilemma, and it is subject to the unclear political climate of 1997. For this reason, the Democratic Party cannot accept that the Government only considers the short-term economic benefits and ignores the overall culture and recreation policy which requires more discussions and evaluations.

Mr President, the Democratic Party thinks it is not the right time now to increase the fees drastically. The problems concerned should be reviewed comprehensively early next year, that is, a few months later when the evaluations and legislations on the broadcasting environment and the consolidating Bill concerning broadcasting are presented to this Council for discussion and examination. This is then the appropriate schedule for implementing the overall broadcasting policy.

Mr President, with these remarks, I support Mr Albert Chan's motion.

MR JAMES TIEN (in Cantonese): Mr President, Mr CHAU Tak-hay had been the Secretary for Trade and Industry for many years and he might have always been subscribing to the positive non-interventionist policy. Now that he has assumed office as Secretary for Recreation and Culture, he is saying he is very surprised. It seems that he will be in for even more surprises in the days to come.

Mr President, several Members have just discussed in detail the royalties and the licence fees payable by the television companies. In the past few days, the Financial Secretary and the other policy secretaries have also commented a lot on the charging policy, with the bulk of the comments covering the principles of "cost recovery" and "users pay". The industrial and commercial sector holds that for those services that are provided to the public by the Government, for example, those services in the areas of social welfare, education and housing, it is of course impossible to recover the cost. However, we from the industrial and commercial sector have to pay every time we use government facilities. If we are so lucky that we can still make a profit after paying all those fees and charges, we then have to pay tax. The Asia Television Limited (ATV) has to pay a royalty to the tune of over $50 million every year, but the Government still seeks to levy a licence fee of $1 million. The Honourable Allen LEE has just said that ATV has so far never been in the black. Insofar as ATV is concerned, it would be better to increase the royalty payment than to levy increased licence fees. However, the Government holds a contrary view and says that if it cannot recover the cost, it would then increase the royalty rate. Otherwise, argues the Government, where would the money come from?

There are two problems inherent in the concept of "cost recovery". First of all, the time needed to recover the cost; second, the amount of cost to be recovered. If the Government is not competent and the management efficiency is very low, then is it reasonable to require the industrial and commercial sector to pay however much the Government has spent? For our own business operation, we would carefully compute the cost, for example, we would use computers to cut cost and would look into whatever means available to cut cost because we believe that, at the end of the day, we would make a profit. However, the Government does not bother about whether it would earn money or not. Will there be any policy secretary or directorate grade officer who is willing to cut the resources of his own department? It would be most desirable to have as many people and as much money as possible in one's own department. Why should they think of using computers to cut cost since, after cutting the cost, it would only benefit the industrial and commercial sector for they would have to pay less. If this is the case, does it mean that the Government can spend and charge as much as it wants and we would have to pay as much as the Government wants? This is unreasonable.

Let us now look into the problem of over how many years the cost is to be recovered. If we phase in the increase progressively over 10 or 20 years, as is the case with the paying back of bank mortgage by instalments, it would be much better. However, the Financial Secretary has issued guidelines to various departments specifying that the cost has to be recovered as soon as possible. I do not really know the meaning of "as soon as possible". That may refer to five or six years. Apart from the fee increase proposed today, the fee increases for other items are around 20% to 30%, representing a certain percentage of increase on top of the inflation rate for the purpose of recovering the cost as soon as possible. I really hope that the Government can think again its policy in this area.

Mr President, the Government always says that the fee has to be increased because it has to catch up with inflation. I would then ask Members: how to tell the difference between catching up with inflation and fueling inflation? Take for example today's proposed fee increase. If the fee is to be increased by 9% or 10%, it may be said that it is aimed at catching up with inflation for last year, but it may also be said that inflation for next year will be fuelled. Right now, is it the industrial and commercial sector, the general public or the Government that is taking the first step? Shall we require the industrial and commercial sector to freeze the prices of their products so as to contain inflation? Or shall we require the employees not to have pay rise so that they will take the first step to curb inflation? Or shall the Government itself take the first step by freezing the fee level at that of last year, so that the fee will not be increased in accordance with the inflation rate? In so doing, the Government can genuinely lead us to combat inflation.

Mr President, under the present situation, it is the Government which is in the money, not the industrial and commercial sector, nor the general public. The rate of unemployment is high and the economic situation of the general public is not that good. Even for the industrial and commercial sector, in the first six months of this year, the number of companies going bust is higher than that for the whole of last year. It shows that the industrial and commercial sector is not in smooth operation. The results of all the listed companies in Hong Kong for the first six months have been published and the profits of most companies have been cut by half. On the contrary, the fiscal surplus of the Government is to the tune of over $150 billion. We are not asking the Government to use up all its surplus, we are just asking whether the surplus of over $150 billion, that is, over $10 billion a year, can be taken as normal general revenue. If this is the case, can we just freeze these charges for the time being?

Last but not least, I would like to remind the Members from the labour sector that we do not want to see the categorization of charges into "livelihood-related" and "non-livelihood-related" ones. The industrial and commercial sector and the Liberal Party support the freezing of all charges that are related to people's livelihood. We are not asking to freeze only the fees and charges that relate to the industrial and commercial sector while giving a free hand to the Government to raise the fees and charges related to people's livelihood. We hope that the Members from the labour camp can rethink this issue.

Mr President, based on the above grounds, I support the motion moved by the Honourable Albert CHAN.

MR MOK YING-FAN (in Cantonese): Mr President, the Hong Kong Association for Democracy and People's Livelihood (ADPL) supports the Administration's proposal of increasing the licence fees payable by the Television Broadcasts Limited (TVB) and the Asia Television Limited (ATV). There are a number of reasons in support of our stance.

Just now, a number of Members mentioned equity and reasonableness; however, the small business operators, such as the "small store" operators, have to pay over $2,000 for their business registration certificates. On the contrary, when the Government seeks to recover the full cost for the issue of licences to the large-scale and franchised television companies, the Members feel that it is unfair and unreasonable. If the companies have to pay $1 million more by way of licence fees, it actually means that they would have to pay $1 million less in terms of the corporate profits tax. In this respect, I cannot figure out what is fair and what is unreasonable.

The Government now pursues the charging policy of full cost recovery for each fare or fee item. For example, in the areas of sewage charge and solid wastes handling charge, we have been subscribing to this policy. If the broadcasting industry does not follow this policy, it would then become double standards. For this reason, we should take a consistent and equitable view. If the Government seeks to recover the cost in respect of items of a subvention or service nature, for example, the medical service, then we will of course oppose the recovery of the cost. However, for those large-scale commercial enterprises which are making profit every year, why should we not employ the cost recovery principle for the charging of licence fees? Learning that the television companies pay a yearly licence fee of only $1,000 which is even lower than the business registration fee payable by small business operators, many people are very surprised at this very fact.

In the past, the Government used to foot the bill for administering the licensing scheme in respect of commercial broadcasting enterprises as operated by the Director-General of Telecommunications and the Commissioner for Television and Entertainment Licensing. I think that this was wrong from the outset and the Government is now only seeking to revert to the right course. Since the policy is now revised and the cost recovery principle is adopted, then those services should not be subsidized by public money paid by the taxpayers. We therefore feel that this principle is worth our support. Why should the public subsidize the profit-making enterprises?

Furthermore, the current fee increase to recover the cost would be phased in progressively over 10 years. It shows that the Government has taken into full account the financial situation of the commercial enterprises. If we take into consideration the continuous increase in the advertising revenue of the two enterprises, the current fee increase exercise should not cause enormous pressure on the financial situation of the enterprises, nor should the increase cause undue hardship to them. I have just heard that one of the television companies has always been in the red, but it can afford to pay a royalty to the tune of tens of millions of dollars. I am quite amazed to find that a company being always in the red is yet able to pay a royalty to the tune of tens of millions of dollars.

In view of this, the ADPL will consider each fee increase application lodged by the Government with the Legislative Council on its own merits and will not oppose all fee increases proposed by the Government in one stroke. For all those charges which would have a bearing on people's livelihood and would cause a heavier burden on the public, the ADPL will surely oppose those increases. But in respect of those charges which are levied on profit-making conglomerates or commercial enterprises, we will support the Government's stand.

I so submit. The ADPL will oppose the motion moved by the Honourable Albert CHAN.

MR NGAN KAM-CHUEN (in Cantonese): Mr President, today's question is to repeal the Television (Royalty and Licence Fees) (Amendment) Regulation 1995.

It seems that we are not in dispute with regard to the royalties, and the discussion is mainly focused on the licence fees. Obviously, these are two different types of fees. The Democratic Alliance for Betterment of Hong Kong (DAB) basically supports the idea of cost recovery and also agrees with the Government's proposal to progressively recover the cost in 10 years' time.

In the past years, the Government has been subsidizing the licence fees of the broadcasters, and the fees are in fact too nominal. The Honourable MOK Ying-fan of the Hong Kong Association for Democracy and People's Livelihood (ADPL) has just commented on this point. It is acceptable for the Government to recover progressively the cost of issuing licences and of monitoring the way the television stations perform the licence conditions. Also, the related increase does not have a direct bearing on our livelihood.

Some Members pointed out that the royalties of the two television companies are already quite high, and the competition in the industry is getting keener and keener. If the licence fees will be further increased, the burden of the two television stations will be increased and their competitiveness will be eroded. However, according to the figures, the advertising revenue of the two television stations in recent years has been increasing in real terms at an annual rate of 4%. Therefore, it is believed that the two television stations will not have any financial hardship.

The DAB believes there is no reason for the Councillors to defend the interests of the two television stations by voting against the phasing in of the increase in license fees annually to recover the cost which will have no direct bearing on consumers. If the Members agree to give a helping hand to the television stations with regard to the high royalties, they can propose to revise downward the rate.

The DAB will vote against the motion.

MR LEE CHEUK-YAN (in Cantonese): First of all, I want to respond to Mr James TIEN's comment about the stand of the Hong Kong Confederation of Trade Unions in taking the people's livelihood as the dividing line. I consider this a simple concept. The main reason for using the people's livelihood as the dividing line is because this involves a process of distribution of the society's resources. If the Government has more money, it should spend more on social welfare and help those in need rather than the better-off classes in society. Earlier on, in a question concerning the Gini coefficient, it was also mentioned that the disparity between the rich and the poor is very serious in Hong Kong. We also look at issues from this angle to see if the gap between the rich and the poor can be narrowed by adjusting fees and charges so that the needy in society can obtain more resources and assistance.

I want to state briefly my stance in this debate. We are against the freezing of the two television companies' licence fees. Many Members have talked about many major principles just now, including broadcasting policy. But getting down to the basics, we only need to discuss what the Honourable Albert CHAN and the Honourable Andrew CHENG have mentioned, that is, whether it is fair and reasonable. I still do not understand how it could be unfair. The only thing that is unfair seems to be that there is no reason not to place the Television Broadcasts Limited ("TVB") and Asia Television Limited ("ATV") on a par with Cable TV and Star TV. But I think they should not be placed on a par and should be dealt with separately. The situation is like an orange and an apple. They are both fruits but they are different. It is the same as there is no ground for discussing the licence fees of the Kowloon Motor Bus Company and the mini-bus operators together. I consider TVB and ATV to be broadcasting organizations whose nature is totally different from that of Cable TV and Star TV. It is fair to consider TVB and ATV together as the two are competitors. We all know how many subscribers Cable TV has. There is no way that Cable TV can rival with TVB or ATV. Therefore, I think it is correct to handle the licence fees of TVB and ATV together. Since it is correct, the question of unfairness does not come into the picture.

ATV and TVB have been paying a token licence fee of only $1,000 for years. If we are looking for fairness, does it mean that Cable TV should pay this token amount for some years too to be fair? Actually, the Government will be considering raising the licence fee of Cable TV in the future. Is it what we call fairness that Cable TV should pay this token licence fee of $1,000 for 10-odd years as well? So, I do not buy this argument of fairness and I think the two should not be jumbled together. Therefore, I oppose the freezing of the two television companies' licence fees.

Thank you, Mr President.

MISS EMILY LAU (in Cantonese): Mr President, I rise to speak against the Honourable Albert CHAN's motion. I fully agree with what some colleagues have said and so I will cut short my speech.

Mr President, I support the Government's policy of cost-recovery for all services except those subsidized services. Under this principle, the Executive Council decided last year to recover costs from the licence fees of the two television broadcasters. Many Members have mentioned the nominal fee of $1,000 now being collected. According to information supplied by the Government to this Council, both television broadcasters and the Government have reached an agreement to gradually but markedly increase the licence fees within a period of 10 years. The Government has my support for this arrangement. The Honourable LEE Cheuk-yan said it was not appropriate to compare the two television broadcasters with Star Television and Cable Television as far as competition is concerned. I agree with Mr LEE on this.

Mr President, if we support Mr Albert CHAN's motion today, the Government will not be able to adopt a new way of collecting the fees next month. At the House Committee meeting last week, I also mentioned that if they did not pay the money, our taxpayers would have to. As far as this goes, I agree with what the Government said, that is, there is no reason why the fees should be shifted to our taxpayers. Nevertheless, I also concur with the criticisms some colleagues made in respect of the Government's broadcasting policy. I hope under the leadership of the new Secretary for Recreation and Culture, the Recreation and Culture Branch can produce excellent results. The Secretary for Recreation and Culture said the issue of cost-recovery in the licence fees for Star Television and Cable Television should be dealt with during the interim review of the two television broadcasters, and I felt it was a sensible thing to do. So, I support this course of action of the Government.

Mr President, I supported the Honourable Edward HO's motion earlier because I hoped to curb inflation through freezing the various fees and charges this year. I do not think freezing fees and charges will boost the economy, but I hope to be able to curb inflation, which I am sure is a matter of great concern for the public. I would also urge the Government to do all it can to curb inflation. Now, Mr Albert CHAN's motion is a bit different. What we have been objecting to over and over again is the increase of fees and charges this year and I am in favour of freezing fees and charges. But the present policy is to enable the Government to recover costs under the new licence fee system. If we do not allow the Government to recover its costs, then the burden of this payment of a huge sum will be shifted to the taxpayers. This is what I cannot agree.

With these remarks, I oppose the motion.

MR LEUNG YIU-CHUNG (in Cantonese): Mr President, first of all, I would like to respond to the remarks on people's livelihood made by the Honourable James TIEN. A Member has mentioned the Gini coefficient during Members' question time. As we all know, our current Gini coefficient has reached 0.476, which is almost the highest among the four Little Dragons of Asia. Compared with the Gini coefficient of Taiwan, which is now 0.3, ours is much higher. Members have just now repeatedly asked the Government whether there is any policy to narrow down the gap between the rich and the poor. The Government replied that it would not implement any such policy. In view of the lack of public policy in this regard, how are we going to narrow the gap between the rich and the poor? So the only way to deal with this will be to look at all issues from the perspective of people's livelihood. I can tell Mr James TIEN that I will not be irresolute and will take a firm stand on matters of price increases involving the people's livelihood.

On the other hand, however, I quite agree with many colleagues in their criticisms on the Government's "cost recovery" and "user pays" principles, especially their criticism that the principle has been abused. Despite that, we should not oppose these two principles without reasonable grounds. For instance, we should not oppose the Government's application of the "cost recovery" and "user pays" principles on some giant consortia. But in regard to some issues relating to people's livelihood, such as medical services, we must oppose the implementation of "user pays" and "cost recovery" principles. I therefore urge Members not be one-sided. The Government may now be abusing this policy, but we should not abuse our right to oppose this policy.

Some Members have argued that it would be totally unreasonable if we support the Government's proposal of increasing the licence fees. It is also unreasonable to the other television companies. But I would like to draw Members' attention to the fact that the time when Cable TV and Star TV were established, their targetted audience and the nature of their services are all different from Asia Television and Television Broadcasts Limited. It would be unreasonable if we insist on dealing with these two television companies at the same time, especially when Cable TV and Star TV have been scheduled for review next year. Why should these two television companies be reviewed at the same time? Insisting on dealing with them indiscriminately will mean an abuse of the principle of reasonableness. It is not a targetted approach of seeking truth from facts. I hope Members can clearly understand this point.

With regard to the policy on licence fees, we must pay special attention to the fact that the Government has to invest a lot of manpower and other resources to monitor the television stations. If the licence fees are not aiming at cost recovery, the public at large will have to bear the costs. In other words, tax revenue from the taxpayers will be spent on it. As a lot of problems have been found in television programmes, their impacts on the public will be much more serious if the Government does not closely monitor them. The Government, therefore, should recover the costs in order to enhance this work so that television programmes can really benefit the public and meet the public's needs. So we should not abuse our principle and turn a blind eye to the fact.

Mr President, with these remarks, I support the increase of licence fees by the Government this time.

MR FREDERICK FUNG (in Cantonese): Mr President, I speak to oppose the motion moved by the Honourable Albert CHAN. I do so for two reasons, one of which has already been raised by the Honourable LEE Cheuk-yan just now and so I shall not repeat it here. Therefore, I shall put forth the other one.

To give a business operator a licence is in fact to grant him a legitimate status for running his business. Having been granted the legitimate status, how great will the operator's business impact upon members of the public, be it positive or negative? Should the operator be held responsible for the negative impact, if any? This is the first point. Secondly, after the operator has obtained the licence and begun his business, are the resources spent in the course of his business operations to be borne by taxpayers, or should the person who applies for the licence bear the costs himself? I think neither the Government nor the taxpayers should subsidize his business operations. Since he has committed himself to running the business, he ought to bear the costs of his own business operations. For example, we are of the view that the operators of some industries, particularly those polluting industries, should observe the "user pays" principle─ to which both this Council and the Hong Kong Association for Democracy and People's Livelihood (ADPL) subscribe. Since such businesses have produced a negative impact on the community, they should spend an extra amount of money to tidy up the consequences of their pollution. Such costs should be borne by these operators as the community should not subsidize their money-making business.

As far as television stations are concerned, they also have a negative impact on society. For example, are the contents of their programmes in keeping with the moral standards of this society? These standards and criteria do need to be monitored by the community. While the Government has to commit resources to the monitoring of these television programmes, such expenses ought to be included in the costing of the licence fees. My view is that all government expenditure in connection with the legitimate operation of businesses should be borne by the operators. Of course, there are some special circumstances under which we may find that the licence fees can be reduced or even exempted. For example, if certain services or businesses are scaring away any potential operators for the time being as one would lose money in running them, the Government should then subsidize them with taxpayers' money by way of lower licence fees, hoping that business will pick up in future. But once their businesses get on healthy tracks, they ought to be charged in accordance with the "user pays" principle, too. For example, the Wharf Cable Television may encounter some difficulties at the initial stage of its operation, and the licence fee levied by the Government may not be pitched at full cost recovery. As a matter of fact, the licence fee levied on Television Broadcasts Limited more than a decade ago was also not pitched at full cost recovery. And the same case applied to Asia Television Limited. But now, after 20 years or so, I think it is absolutely unacceptable if we still do not recover the full costs and if we still require our taxpayers to subsidize their businesses. I do not believe their operations still needs taxpayers' subsidization. If they cannot get their business off the ground after more a decade, then I would rather ask them to simply fold their business.

However, licence fees are different from royalties. As the Government grants a particular operator instead of other organizations a certain franchise, such a tax has to be imposed for this reason. I think such a tax system is open to discussion and debate. Further discussions can be raised on such issues as the existing imperfect royalties system, too heavy a rate of tax, or the Government's unreasonable assumption that advertising revenue should grow annually by 4% in the wake of an assertion that there are not that many advertisements. However, this is a question concerning royalties which should not be mixed up with licence fees. They are two completely different matters.

Moreover, the Liberal Party always questions whether it is appropriate to draw the bottom line at the people's livelihood. Well, I think it is entirely appropriate because the people's livelihood is connected with services provided by the Government. For instance, now that domestic sewage charges, itemized charges on health care as well as medical services are all pitched at cost recovery, I would like to ask the Government this question: Are we treating these services as some kind of business operations to make money? I certainly believe that they should not be so treated. And if they are not business operations, then they must be services. Services are no longer services if we have to recover their costs. That we have paid taxes to the Government, for example, income tax, profits tax and so on, means that members of the public have paid the Government for the services I have just mentioned. Where then would Members suggest I should draw the line if not at the people's livelihood?

Therefore, I agree that the line should be drawn on the basis of the people's livelihood, and also that the licence fees for businesses that have been in operation for 10 to 20 years should be pitched at full cost recovery. I think it is really too late for the Government to propose full cost recovery only after 10 to 20 years.

DR YEUNG SUM (in Cantonese): Mr President, I seldom speak on matters relating to the increase of fees or charges. But having listened to the speeches of many colleagues, I would like to explain in a few words why the Democratic Party has opposed every fee increase recently proposed by the Government.

First of all, I would like to give an account of the central principle. Mr President, in view of the high inflation, high unemployment rate and low consumption desire, we basically hold that the Government should freeze the fees or charges in order to stimulate the economy as the Government has amassed a substantial surplus. Besides, we have, time and again, strongly urged the Government to come up with effective measures to demonstrate that it is minded to curb inflation. Yet, it is regrettable that the Government is still dragging its feet so far, claiming that the market should be allowed to make its own adjustments. I hereby warn the Government again that should the Government fail to come up with effective measures which can make us believe that the Government has the intention to suppress inflation, the Democratic Party will oppose every and each proposal of the Government tabled at the Legislative Council to increase fees or charges.

As I have explained the central principle, let us now turn to the finer points. In comparing $1,000 with $2,000 we can certainly tell that $2,000 is a greater amount whereas $1,000 is a smaller one. Some Members have raised the point as to why members of the public are made to subsidize the television broadcasters which are making profits. Speaking of television broadcasters making profits, we surely would not consider it to be something that we should encourage. However, from what the Honourable Allen LEE has said, we learned that when the Government and the television broadcasters were negotiating the terms of the contract, they basically agreed on the levying of a certain amount of money from the royalties and a nominal licence fee. Now, we are in support of the recovery of cost by the Government as most of the Members who have spoken hold that the Government should recover the cost incurred.

However, seldom do we go back on the substance of legislation or policies after they have been passed. It is for this very reason that the Democratic Party opposed the Government's policy on better-off tenants of public housing estates. It is unreasonable to require tenants, who were badly-off when they first moved in the public housing estates, to pay double rent now after they have lived there for 10 years and when their children have grown up. We seldom argue on legislation or policies after they have been approved. This is undesirable unless the Government states clearly to the television broadcasters upon the renewal of contract that the licence fees will no longer be nominal but the royalties will be levied on the same terms and that, if they want to continue with their business, they are required to apply for a licence.

I believe what Mr Allen LEE has said for he was a member of the Broadcasting Authority. I think it is unreasonable if the Government should go back on its words. The Government can state in clear terms upon the renewal of contract that all forthcoming fees will be charged in such a way as to recover the cost and therefore the licence fees to be borne by television broadcasters will no longer be nominal. I think it is a viable way to straighten things out if the Government can hold new rounds of negotiations with the television broadcasters. However, if it was previously agreed that heavy royalties would be levied and that the licence fees would be nominal, I think there is no justification for the Government to renege on its promises after a certain period of time.

Some Members said that there is every reason for television broadcasters to pay heavy taxes as they are making money. But from the information provided by the Honourable Albert CHAN, the television broadcasters have been paying substantial royalties and I believe they have paid a huge price for their exclusive operation. If the Government is to make changes to this arrangement, the Government may have to conduct a review and hold new rounds of negotiations with the television broadcasters to achieve this end, putting it across to them that the licence fees will no longer be nominal but royalties will be levied on the same terms. I think it is better for the Government to hold negotiations afresh than getting into a row because of a change in its policies. If the Government is to get into yet another row over its policies, I would not give it my encouragement although the television broadcasters have been making profits. This is similar to the fact that our legislation seldom has retrospective effect after it has been passed.

Thank you, Mr President.

SECRETARY FOR THE TREASURY (in Cantonese): Mr President, first, I would like to thank Members for their support of the Government's motion to amend the regulation, but I would also like to take this opportunity to respond to the views of those Members who oppose it.

The Secretary for Recreation and Culture has explained the background and the related justifications of this charge adjustment in detail. He has also pointed out clearly that licence fee and royalty are charged according to completely different bases. Licence fee is set according to the principles of user pays and cost-recovery. As regards royalty, it is the tax collected by the Government in return for its permission to develop one of the limited resources of society or to operate under limited competition by means of a licence or other forms. The purpose of collecting royalty is to ensure that the public can share the monetary profits made by the broadcasting companies under competitive circumstances. I have to point out that there are apparent differences between license fee and royalty which serve different purposes and the two should not be mixed up. The principles of user pays and cost recovery are nothing new; they are policies which we have adopted over the years. We would be pleased to explain this point in detail to any Member who is not clear about it.

Some Members are concerned that requiring the television broadcasting companies to pay licence fees and royalties at the same time will create operational and financial difficulties to them. However, according to the relevant information, that is unlikely to happen. In fact, the present rate of licence fee for television broadcasting companies is only $1,000 which is a nominal amount. To avoid a sudden increase in licence fee by an excessive margin, the Government has agreed to increase it gradually over the next 10 years. In other words, the licence fees paid by the two television broadcasting companies in the first year will only be able to cover 10% of the Government's costs.

Some Members have mentioned the question of cost-effectiveness. I can fully understand the views expressed by Members and the Government actually considers this to be an important matter. Therefore, the Government has a system to ensure that those who make use of the Government's services will obtain cost-effective services. Since resources are limited, the policy branches or the department heads have to conduct regular reviews on the services they provide in order to make their operation simple and efficient and to cut costs. Otherwise, there will be no chance that additional resources will be allocated to them to expand their services.

Besides, the Director of Audit will audit according to the value-for-money principle and supply independent information, advice and guarantee to the Legislative Council on the questions of the cost effectiveness, efficiency and efficacy of the policy branches and the government departments. The Public Accounts Committee may also summon any member of the public to give evidence during its scrutiny of the report submitted to the Legislative Council by the Director of Audit. In fact, this has put a lot of pressure on the directors of government departments and members of the policy branches.

Members have already suspended 14 items of the Government's charges, including the last one. However, I would like to take this opportunity to mention that suspension of the Government's charges will not help stimulate the economy at all, nor will it help control inflation. Suspending the royalties and licence fee this time will only make the Government use the money of the ordinary taxpayers to subsidize the commercial firms which aim at profit-making. That is unfair to the ordinary taxpayers.

For the reasons mentioned above, I hope Members will negative this motion.

MR ALBERT CHAN (in Cantonese): Mr President, I am very glad that there are so many Members and government officials speaking on this subject. I did not expect to see such a lively and vigorous debate.

First of all, I would like to clarify a point mentioned earlier by the Secretary for Recreation and Culture at the very beginning of his speech that the television stations might have successfully persuaded Members. In regard to the question of television licences, over the last six months or so, I have not contacted any television station, nor has any television station liaised with us on its own accord. Basically in the past few years, the Panel on Recreation and Culture has had numerous discussions on the issues about licence fees, royalties and broadcasting policy. The viewpoints of the Government and the Panel have obviously been different. If the Secretary for Recreation and Culture looks up the minutes of past meetings, he will not feel shocked and disappointed. Judging from the speeches of some Members, particularly with regard to their understanding of broadcasting policy as well as the various concepts and rationale behind the proposed fees which are now put before Members for voting, I can see that there are still some mistakes in the information and understanding of a lot of Members. Using the words of the Secretary, I myself feel shocked and disappointed.

Before the start of this sitting, I specifically prepared a checklist clearly showing the different licence arrangements and royalties for different television media. I did so because I was concerned that Members might not know or understand the situation. However, it surprises me that despite the checklist, some Members still do not understand. Let me try to explain briefly the present situation again.

In fact at the very start, the Honourable Allen LEE has already spelt out the whole background. The Government's decision to adopt the cost-recovery policy this year marks the alteration of the arrangement in regard to the licence fees and the broadcasting policy stipulated in 1988. Of course, I am not against the Government changing some arrangements. But at the time of an alteration, it should take account of the whole policy as well as fairness and reasonableness which I mentioned earlier. One should not abuse one's principles, as what the Honourable LEUNG Yiu-chung has just mentioned. We should consider whether the fees are fair and reasonable and not merely look at whether the consortia concerned can afford to pay. If those companies that can afford it have to pay more, then are we going to charge Cheung Kong (Holdings) Limited of Mr LI Ka-shing a higher registration fee? We cannot do that we have to consider the nature of the question before analyzing it. Charging those companies with greater profits more and those running in deficit less cannot be regarded as fair.

A Member mentioned earlier that Asia Television Limited (ATV) and Television Broadcasts Limited (TVB) have both agreed to the proposed fees. I would like to clarify again that this is not the case according to our information. The papers provided by the two television stations clearly indicated that they had put forward their opposing views to the Government time and again. Of course, the Government adopted a "high-handed approach" eventually and insisted on increasing the licence fees. Do the television stations want to give up their licences? Therefore, I am afraid that to say that the two television stations accept this arrangement of the Government is just making them scapegoats.

As a matter of fact, in regard to the formulation of licence fees, quite a number of Members and I have explained earlier that it is due to the Government's change of principles and the computing method for licence fees as well as its different treatment of different television media. Many Members remarked that Star TV and Cable TV are different from TVB and ATV, and thus there should be different principles for assessing their licence fees. If this premise can be established, we will have to analyze what the differences actually are. At present, Star TV is getting into every family in Hong Kong but then the Government is not charging any royalty on its advertising revenue. However, no matter whether ATV and TVB are earning a profit or suffering a deficit, they still have to pay, according to my understanding, $100,000 to the Government on average out of every $1 million of advertising revenue they earn. This is the arrangement of royalties. When the Government formulated this level in 1988, it clearly knew that the licence fees were nominal and that the television stations were shouldering social responsibilities and other government expenditures through payment of royalties. Therefore, it is rather unfair and unreasonable when the royalties were not reviewed while the licence fees were greatly increased during the mid-term review.

Over the past few years, the entire broadcasting industry has marched into a revolutionary stage. In the days to come, the market of subscription television will open up and there may be more than one subscription television stations. There will be the new video-on-demand (VOD) service and there may even be other major developments which will have a very great impact on ATVand TVB. Members who have followed the broadcasting policy should understand that although the advertising revenues of the two television stations are not bad in the past two years, it does not mean that the situation will also be that favourable in the coming two years. That is because Cable TV may be able to show commercials next year and this will greatly affect the advertising revenues of the two television stations.

It is thus my opinion that apart from analyzing this issue from a macro point of view, we also have to take into consideration the definition of the fees itself, the past history of the policy and the computation of the present fees. When dealing with this issue, the Subcommittee was not influenced by the television stations but analyzed the issue purely on the basis of the policy itself before deciding on its stance. I hope that after understanding the question, Members will support today's motion.

Thank you, Mr President.

Question on the motion put.

Voice votes taken.

Miss Emily LAU and Mr LEE Cheuk-yan claimed a division.

PRESIDENT: Council will now proceed to a division.

PRESIDENT: May I just remind Members that you are now called upon to vote on Mr Albert Chan's motion to repeal the Television (Royalty and Licence Fees) (Amendment) Regulation 1995. Now will Members please register their presence by pressing the top button in the voting units on their respective desks, and then proceed to cast their votes by pressing one of the three buttons below?

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

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, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr Albert HO, Mr LAW Chi-kwong, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Miss Emily LAU, Mr Eric LI, Dr Samuel WONG, Miss Christine LOH, 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 David CHU, Mr IP Kwok-him, Mr LAU Chin-shek, Mr Ambrose LAU, Dr LAW Cheung-kwok, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mr NGAN Kam-chuen and Mr YUM Sin-ling voted against the motion.

THE PRESIDENT announced that there were 28 votes in favour of the motion and 25 against it. He therefore declared that the motion was carried.

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 27 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.

VIETNAMESE MIGRANTS PROBLEM

MRS SELINA CHOW to move the following motion:

"That, in view of the Governor statement in the Progress Report attached to this year Policy Address that it is unlikely Hong Kong will be able to close all Vietnamese migrants (VM) camps by early 1996 and that it has not been stated in the Policy Address how the problem of VM being stranded in the territory is to be resolved, this Council urges the Government to make known to the public as early as possible the specific timetable for the complete resolution of the VM problem in the territory before the change of sovereignty, to abolish as soon as possible Hong Kong status as a port of first asylum; and, having regard to the motion passed by this Council on 7 December 1994, to seek Britain commitment to resettle and take care of all VM not repatriated to Vietnam before 1 July 1997 and to make a claim to the United Nations High Commissioner for Refugees for all overdue payments to Hong Kong."

MRS SELINA CHOW (in Cantonese): Mr President, today this Council is once again debating on the problem of Vietnamese migrants (VM). From the proposed changes the amendment made to the motion, I can see that unless there are Members opposing both the original motion and the amendment, I can assume that all Members are in support of urging the Government to make known to the public as early as possible a specific timetable for the complete resolution of the VM problem in the territory. They are in support of asking the British Government to "underwrite" the VM problem, and urging the United Nations High Commissioner for Refugees (UNHCR) to repay the debt to Hong Kong. As a matter of fact, this Council already reached a consensus on these issues on 7 December last year. Today, the Legislative Council in the current Session is only reaffirming this consensus.

The sole difference between my motion and the amendment is that the former seeks to abolish as soon as possible Hong Kong's status as a port of first asylum. The Honourable LAW Chi-kwong's amendment wants to restore my original motion to the one last year. However, the situation this year is very different from that of last year. This Council must reassess the situation and it is necessary to abolish the first asylum policy.

I understand that the proposal to abolish the status as a port of first asylum is a controversial one. Some people would say that I am disregarding humanitarianism. The Government will again say that we will be subject to international reproach if my proposal is implemented. Also, those who remember that I was against the amendment in relation to abolishing the first asylum policy last year may accuse me of "taking an about-turn".

In fact, I also asked the Government to review the first asylum policy last year. However, it was not an appropriate time to abolish the policy then. But with the change of times, can we still stick to our old rules? Somebody has remarked that I am "taking an about-turn". That is true. It is the situation that has forced me to change my demand on the Hong Kong Government. Yet I am not the only one "taking an about-turn" as there are more and more voices on my side. Even those organizations and public opinion representatives who have always upheld humanitarianism and shown concern about the rights and interests of the VM and refugees also think that the opportunity has come for a change now. We must find the right path in a changing environment. If we are still controlled by external forces while the number of VM stranded in Hong Kong is increasing, and we still fail to clearly, resolutely and honestly lay down a policy of refusing to accept more VM, but rather create an illusion among the boat people planning to escape from Vietnam that they might be screened as refugees in Hong Kong, that is really immoral and inhumane. We can no longer stubbornly forget about Hong Kong's interests, insist on doing harm to the Vietnamese economic migrants with good intention, and welcome them into our detention centres with the doors wide open.

Amid the new situation confronting us, the greatest threat comes from the unpredictable signals from the United States to the VM. Just when we feel that dawn is coming when the Conference on Indo-Chinese Refugees in Geneva resolved in March this year that Vietnam should take back 1 800 VM stranded in Hong Kong each month, some United States Congressmen suddenly proposed a re-screening of the VM in May. Although the United States Government subsequently made another proposal of screening after repatriation, the move by the United States Congress has already severely hampered the implementation of the whole repatriation scheme. This has led to riots in the VM camps and even vain illusions among the Vietnamese. If these signals should trigger off another influx of VM, are we still going to take the risk to allow or retain the first asylum policy and attract them to come?

Last year when this Council adopted the motion urging the British Government to "underwrite" the problem, the Governor criticized me and said the motion would become a dangerous signal. If what he said was true, the Hong Kong Government should really abolish the first asylum policy without delay. As a matter of fact, I firmly believe that this Council will never accept the British Government's shirking of its responsibility towards the Hong Kong people by using the excuse that another influx of VM might be triggered off. And the Hong Kong people will not listen to the words of Governor PATTEN and hold their tongues on this issue.

　 The VM stranded in Hong Kong have already given rise to a lot of problems. Since mid-May, when the United States Congressmen moved the motion of re-screening the VM, the whole repatriation scheme has become stagnant. With more and more problems emerging in the camps, things are beginning to go out of control. For example, there are various cases like VM escaping from the camps, "fleeing under the guise of seeking medical consultation", bogus marriages and so on. Every time during camp removal, there is bound to be confrontation and violence, which brings disgrace to our disciplined services. By normal reasoning, we should definitely stop the Vietnamese boat people from coming to Hong Kong in order not to add to our burden. Whether there are 10 or 100 boat people, we should also refuse to let them in, not to mention that there are already 400 VM this year! The Secretary for Security has refused to abolish the first asylum policy on the grounds that the number of new VM is not very large. It would be like feeding a patient of serious indigestion and saying, "The illness can be treated gradually. Since you are already suffering from serious indigestion, it will not do much harm if you take a few more spoonfuls of rice."

The Government has always emphasized that Hong Kong may be reproached by the international community if we abolish the status as a port of first asylum. No one can tell whether this is true or not. But to the Hong Kong people, other than leaving this problem brought by the British unresolved, why not urge the British Government to share this international pressure while it is still bearing the moral responsibility towards Hong Kong to solve the problem? I suspect that the British Government is using this kind of psychological fear of the Hong Kong people so that it can stand aloof of the whole matter.

According to the resolution of the Steering Committee of the International Conference on Indo-Chinese Refugees on 14 February 1994, due to changes in the situation of Vietnam, the screening procedure under the Comprehensive Plan of Action (CPA) would no longer be applicable to Vietnamese entering the ports of first asylum in the region. These Vietnamese will be treated according to the laws of individual countries and internationally accepted practice. In other words, the screening procedure under the CPA has already come to an end since then. As a matter of fact, since the signing of this agreement, Singapore, Indonesia and Malaysia no longer allow the boat people to enter their territories. The screening procedure has ceased in the Philippines, and all the boat people who illegally enter the territory are to be treated as illegal immigrants and sent to prison. Hong Kong is the only place in Southeast Asia still maintaining the first asylum policy. No wonder all the boat people have come to Hong Kong!

Mr ASPREY, the then Secretary for Security, and Mr BRESNIHAN, the Refugee Coordinator, both attended the conference. Mr BRESNIHAN, who is still the Refugee Coordinator at the present moment, should explain to us today this event which has not been widely covered in the news media ─ What exactly was it all about? Has the Hong Kong Government deliberately hidden the fact from us? Has this agreement been reported to the Executive Council and the Legislative Council so as to form the basis for reviewing the existing policy and to decide whether the outmoded policy should be changed?

The Hong Kong Government has long been defending the first asylum policy on the pretext of possible international reproach. But actually, is it the interests of Hong Kong or the false image of humanitarianism of the United Kingdom that the Government is defending? If we have maintained the first asylum policy simply because we have been fooled, then should we continue sacrificing the interests of the Hong Kong people just to promote the international image of the United Kingdom now that we are awake?

Even the Refugees Concern Group, which has long been looking at matters from the perspective of the rights and interests of the refugees and the boat people, also issued a statement the day before yesterday in support of abolishing the status as a port of first asylum. This shows that our current request will actually not do any inhumane harm to the boat people or the political refugees. The Honourable James TIEN will later explain in detail the arguments of the Refugees Concern Group for Members' reference. I hope Honourable Members can remember that the Refugees Concern Group has long been regarded as an organization upholding human rights and advocating humanitarian policies and actions. The fact is that times have changed and so have the circumstances. There will not be a large number of Vietnamese political refugees. The first asylum policy which was designed for protecting the large number of refugees escaping from political persecution in Vietnam will no longer be applicable now.

According to the data from the Refugees Concern Group, none of the VM who came Hong Kong in 1994 and 1995 have been screened as political refugees. Although in response to a question asked yesterday, the Government said that there were 1 267 VM and 240 VM in 1994 and 1995 respectively being screened as refugees, the Security Branch must clarify whether these refugees arrived in Hong Kong after 14 February 1994, when the international agreement was signed to the effect that the screening procedure would no longer be applicable, and how many of the VM who arrived after that date have been screened as refugees. As a matter of fact, with the United States restoring its normal diplomatic relations with Vietnam in July, any Vietnamese seeking political asylum can go to the United States Representative's Office by all means. Besides, there is also a representative of the UNHCR in Vietnam to deal with this kind of applications and help them. Therefore, there should be sufficient channels for the political refugees to seek political asylum in Vietnam and there is no need for them to come all the way to Hong Kong.

Mr President, the Hong Kong Government has written to Members in an attempt to persuade them with the same hackneyed arguments not to support the proposal of abolishing the first asylum policy. But I would like to ask Members to look more closely. The international reputation of Hong Kong should not and will not be jeopardized, just as the other Southeast Asian countries. In particular, this agreement on abolishing the screening policy was signed last year, that is, on 14 February 1994, why should Hong Kong feel ashamed when it is acting in compliance with this international agreement and following the footsteps of its neighbouring countries? In the aspect of implementation, Hong Kong should have a comprehensive system in order to protect the sovereignty of its waters. So far as I can understand, the other Southeast Asian countries have refused to let the boat people enter their territories with a resolute but humane attitude. In the international waters, food and water can be supplied. Hong Kong can surely do so if the Government has the determination. To date, Hong Kong has come to a state that it should be "doing benevolence in a hard-hearted manner"! Is the camp removal scene accompanied with the use of force much better than refusing the boat people entry to our territory? If the Hong Kong Government is lacking in experience and techniques, it can surely learn from our more experienced neighbouring countries or even from the United States. It can surely surmount the difficulties.

Mr President, last night I learnt that MR ASSADI, Representative of the UNHCR, would be leaving Hong Kong while the officials of the UNHCR would be downgraded. Once again, this has demonstrated the shrinking of the United Nations' commitment in Hong Kong. Can we still believe that the huge debt of $1 billion will one day be repaid to Hong Kong? If the British Government is to retreat from Hong Kong in an honourable manner, it has to shoulder the responsibility in regard to the boat people and the debt. Shirking of responsibility is something that Hong Kong can never tolerate.

Question on the motion proposed.

PRESIDENT: Mr LAW Chi-kwong has given notice to move an amendment to the motion. Mr 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.

MR LAW CHI-KWONG's amendment to MRS SELINA CHOW's motion:

To delete ", to abolish as soon as possible Hong Kong's status as a port of first asylum".

MR LAW CHI-KWONG (in Cantonese): Mr President, I move that the Honourable Mrs Selina CHOW's motion be amended by deleting "to abolish as soon as possible Hong Kong's status as a port of first asylum", as set out under my name in the Order Paper. I very much agree with most of the contents of Mrs Selina CHOW's motion. The Government has the responsibility to give the public a specific time frame within which the problem of the backlog of boat people be solved completely. It should repatriate those who have been screened out as non-refugees as soon as possible, call upon the British Government to take up the responsibility to resettle and look after the boat people and demand the United Nations High Commissioner for Refugees to repay $1 billion to Hong Kong. The Democratic Party's views in this respect will be expressed by other colleagues. In these few days, I have also heard the opinions of the refugees concern groups. On the surface, they agree to abolish Hong Kong's status as a port of first asylum, but if one examines their proposed procedures to deal with the Vietnamese boat people, one will realize that the procedures are, in effect, entirely the same as arrangements to retain the status of a port of first asylum. Therefore I will not respond to their stance in detail. Here, I will only concentrate on the discussion of the amendment which I have proposed.

Some people have commented that Mrs Selina CHOW's motion to abolish Hong Kong's status as a port of first asylum is only a political gesture to please the electorate. I do not wish to comment on that. I wish to discuss matters as they are and do not wish to speculate on the intentions of other colleagues. I oppose the motion to abolish Hong Kong's status as a port of first asylum as soon as possible for the following five reasons:

Impracticable as a matter of law

Since Hong Kong is still under British rule and Britain is a signatory to the United Nations Convention on Refugees (UNCR), Hong Kong has naturally become a port of first asylum. That is a fact which cannot be changed as a matter of law.

Abolition of the status of a port of first asylum cannot be put into effect

When there are boat people within Hong Kong waters, the British Armed Forces and the Royal Hong Kong Police Force cannot tow them out to the high seas in contravention of Britain's international obligations. Under these circumstances, Hong Kong cannot unilaterally abolish its status as a port of first asylum.

Unacceptable because of humanitarian reasons

If Hong Kong's status as a port of first asylum is abolished, that will not be directed against the Vietnamese boat people alone; anyone who come to Hong Kong for refuge because of political reasons, no matter which country they are from, will not receive reasonable screening and protection. The abolition of Hong Kong's status as a port of first asylum is unacceptable because of humanitarian reasons.

Whether to abolish the status of a port of first asylum is not the crux of the problem

About 196 000 Vietnamese boat people have come to Hong Kong over the past 20 years and about 190 000 of them have been resettled in other countries or repatriated to Vietnam. There should only be about 6 000 people remaining. If the fertility rate of the Vietnamese boat people has not been particularly high, the problem should basically have been solved. At present, the backlog of boat people in Hong Kong is about 20 000 and only 367 of them came to Hong Kong this year (up to 25 October). This shows that the problem lies not in the number of boat people who came to Hong Kong recently, but in the number of people who have been repatriated. The Orderly Repatriation Programme (ORP) has not as yet been much of a success; only 700-plus have been repatriated in the first 10 months of this year. The number of people who have been voluntarily repatriated has also decreased considerably from 12 000 people in 1993 to only 1 200-plus for the first 10 months of this year. In order to solve the boat people problem, the ORP should be strengthened and the boat people should be encouraged to join the Voluntary Repatriation Scheme.

International reputation is particularly important to Hong Kong in the latter part of the transitional period

Abolishing Hong Kong's status as a port of first asylum cannot solve the problem. Besides, Hong Kong will then be guilty of breaching the UNCR and receive a bad name for discriminating against the boat people and being inhuman. That will only be detrimental. If Hong Kong unilaterally abolishes its status as a port of first asylum, that will give Britain an excuse to shirk responsibilities. Britain can then say that it has nothing to do with it, it is the Hong Kong people who discriminate against the Vietnamese people, it is they who want to drive these people away and it is they who abolish the status of a port of first asylum. This will give Britain an excuse to shirk responsibilities and a chance not to fulfill its obligations stated in the Convention. They will then have nothing to do with the problem and international attention will then be focussed on Hong Kong.

To summarize, it would be impracticable to abolish the status of a port of first asylum as a matter of law, in terms of implementation and for humanitarian reasons. It cannot solve the problem and, besides, it will damage Hong Kong's international reputation and give Britain a chance to shirk responsibilities. I call upon colleagues in this Council to take the interests of the community as a whole into consideration, oppose the policy to abolish the status of a port of first asylum and support my amendment.

Mr President, these are my remarks.

Question on the amendment proposed.

MR CHAN KAM-LAM (in Cantonese): Mr President, in "puffing up itself at its own cost" so as to look grand in the eyes of the international community at the time, and in showing the pseudo-humanitarian stand of Britain and the United States, the British Government had made Hong Kong shoulder the burden of Vietnamese migrants (VM) for a full two decades without ever letting Hong Kong have a choice. During these two decades, we have seen nothing done by the British Government to solve the VM problem of Hong Kong. As a matter of fact, the British Administration in Hong Kong should be condemned by this Council and by members of the public on this issue.

Just now in criticizing the British Government, I spoke of its pseudo-humanitarianism, and that was not an excessive remark. Let us consider this: It began in May 1975 when a vessel named "Tau Truong Xuan" with 3 743 refugees on board came to Hong Kong, and during the two decades since then, how much humanitarian obligation has the British Government fulfilled? How many refugees has it taken in? Notwithstanding the argument that Britain has not been faring well economically and therefore has been unable to take care of matters other than its own and thus unable to take in the Vietnamese refugees, how many western countries has it endeavoured to persuade to take in the refugees? And how best has it tried to persuade the Vietnamese Government to take back those VM who have been identified as non-refugees? What is more unsatisfactory is that in 1989, the British Administration in Hong Kong empowered the Financial Secretary to advance money to pay for the VM expenditure under the Public Finance Ordinance. In doing so, it not only increases the financial burden of Hong Kong, but also makes it impossible for the Legislative Council to monitor the way the money is spent.

I am sure that the British Government does not want anyone to raise such a series of questions. This is because once these questions are raised, it is for certain that the British Government will be put to shame. However, for this protracted war of attrition, there ought to be an ending today which will satisfy the people of Hong Kong.

Up to the end of October this year, there were nearly 21 000 VM who were still stranded in Hong Kong, and there were another 1 500 Vietnamese refugees awaiting emigration to overseas countries. Under the existing orderly and voluntary repatriation programmes, there are only about 200 VM returning to Vietnam each month. Given the extremely slow progress that we are having, it will have to be another eight or 10 years before all the VM can be repatriated. And unless the target of the Indochinese Refugee Steering Committee of the United Nations to repatriate 1 800 VM a month can be realized, I am afraid this problem will certainly have to straddle 1997.

In 1979 the British Government signed an international agreement to make Hong Kong a port of first asylum unconditionally. Today, the Vietnam War has long been over and most of the Vietnamese people who came to Hong Kong are no longer political refugees. Moreover, as the United States Government has also restored diplomatic relationship with the Vietnamese Government, it is of course justifiable for Hong Kong to dump the burden of being a port of first asylum. It is because as long as we do not abolish Hong Kong's status as a port of first asylum, VM would continue to believe wrongly that once they manage to make their way to the port of first asylum, they can then proceed to the second or third port of asylum, or the destination they are minded to go. Therefore, the British Government is duty-bound to declare that Hong Kong will no longer be a port of first asylum.

In the Progress Report that went with the policy address this year, the Governor merely gave a brief account that it would be unlikely for Hong Kong to close all the VM camps by early 1996, and he attributed the slow progress of repatriation to the United States Congress' proposal to screen the VM once again. What is more, in spite of the fact that he knew full well that at that time even the Hong Kong Government had no say in the matter, the Governor claimed on a number of public occasions that it was the Members of the Executive Council in 1988 who were to blame. In the question time of the Legislative Council, he even said that legally the British Government would not take care of the VM who would still be stranded in Hong Kong by 1997.

I want to ask the British Government this: Has it decided that it will not "give a damn" to the VM problem but will leave it to the Special Administrative Region Government to deal with the mess? I sincerely hope that the British Government will not make those empty and irresponsible remarks any more. Instead, it should right away abolish Hong Kong's status as a port of first asylum on behalf of the Hong Kong Government, and to negotiate with the Vietnamese Government through diplomatic channels to increase the number of people for the orderly repatriation programme so as to ensure that all VM stranded in Hong Kong will be repatriated by the end of 1996. Also, the British Government has the duty to file a claim on the United Nations High Commissioner for Refugees on behalf of Hong Kong for the overdue payment of $1 billion.

Mr President, it is a well-recognized fact that both Vietnamese refugees and VM have brought to Hong Kong inconvenience and nuisance over the past 10 to 20 years. Hong Kong has done her best with regard to the VM problem and the international community should not demand anything more than that. Therefore, should there be any VM who have not yet been repatriated to Vietnam for various reasons by 1997 when Hong Kong's sovereignty reverts, then Britain as Hong Kong's sovereignty state should, since she had pledged on behalf of Hong Kong to make Hong Kong a port of first asylum, carry out her moral obligation to take care of any VM who are still stranded in Hong Kong.

Finally, I wish to praise colleagues from the Liberal Party, as I remember that less than a year ago they were still stridently criticizing other colleagues who were demanding to abolish the port of first asylum status for engaging in a stunt to win more votes. But we can see that eventually, they have a sure and clear grasp of the current situation today. To this, we express our welcome.

What is more, I hope that colleagues in this Council today can support this change of the Liberal Party. "When two persons are of one mind, they will become so powerful that they can even break a piece of metal", as the saying goes. Moreover, if Members of this Council can fully co-operate, it will facilitate Hong Kong's effort to fight with the British Government for a satisfactory solution.

Mr President, with these remarks, I support the original motion.

MR CHOY KAN-PUI (in Cantonese): Mr President, in 1988 when the Government was prepared to set up the Whitehead Detention Centre in Ma On Shan, Sha Tin, no consultation had been carried out. The Government had only informed the Sha Tin District Board of it. In 1989, the detention centre was established. At that time, the Security Branch assured that if any detention centre needed to be closed in the future, the first one to be closed would be the Whitehead Detention Centre in Sha Tin. Unfortunately, today, that is, six years afterwards, the Whitehead Detention Centre has not been closed; furthermore, it is still a place where most Vietnamese boat people are accommodated.

Such a situation reflects that the Government has misled the Sha Tin District Board and the residents, in Sha Tin. I believe you, Mr President, is also well aware of this. More importantly, the Government has not tried to fully solve the problem of boat people being stranded in Hong Kong during the past six years.

I do not want to further discuss whether the Government is deliberately or unintentionally misleading us. On the contrary, I want to emphasize that the Government must try to solve this problem before the transfer of sovereignty and should not leave the burden to the Special Administrative Region Government.

However, what should the Government do? This very much depends on what attitude and what policy Britain will adopt. Basically, Britain is unwilling, before its departure from Hong Kong, to solve this problem which has been haunting us for 20 years. I very much doubt whether Britain will do so.

During the period from 14 to 17 June this year, a Sha Tin District Board deputation visited Vietnam in the hope that they could help solve this problem. However, according to the information obtained from Vietnam, a meeting had been convened by a steering committee on 14 February 1994. A number of countries which were either directly or indirectly involved in the boat people issue had signed an agreement under the committee's arrangement. In accordance with this agreement, they all signed and agreed to repatriate immediately any boat people they intercepted. But to our surprise, Britain did not sign this agreement. In other words, after arriving in Hong Kong, the boat people will not be subject to immediate repatriation to their country of origin. Under such arrangement by Britain, the number of boat people coming to Hong Kong will not decrease. On the contrary, it will attract more Vietnamese to Hong Kong. Although the abolition of the first asylum policy may invite criticism from the international community and damage Hong Kong's image, we cannot keep on shouldering this burden indefinitely.

Mr President, we request that the British Government should ask for repayment of the outstanding debt owed to Hong Kong by the United Nations High Commissioner for Refugees (UNHCR). Besides, we also demand that this amount of debt should be repaid to Hong Kong by the British Government first which can keep on trying to recover the money from the UNHCR in case he/she fails to repay Hong Kong upon the transfer of sovereignty. I make this proposal for I am worried that the British Government will shirk all its responsibilities on the ground that Britain is no longer the sovereign of Hong Kong and "it is none of my business."

Mr President, with these remarks, I support the original motion. Thank you.

MR HENRY TANG (in Cantonese): Mr Deputy, we are now approaching the 21st century. At this moment, anyone who opposes on humanitarian grounds the abolition of the status of the port of first asylum, a burden encumbering Hong Kong for more than 20 years, is "looking at the sky from a well", and the well is a dried-up one, for he has failed to see what is taking place in Vietnam today.

I am not sure whether Members are aware that: since its economic reform in 1986, Vietnam has earned itself the title of "another tiger in Asia". The growth rate of Vietnam's economy was 7.2% between 1991 and 1993, while the inflation rate had dropped from 76% in 1989 to a remarkable 5% in 1993. In this respect, it has out-performed the Hong Kong Government. Furthermore, in 1989, Vietnam's grain production exceeded 20 million tons and its rice exports reached 1.5 million tons, making it the third largest rice exporting country in the world. In 1993, Vietnam's grain production reached a historical record of 24.5 million tons.

In 1988, the Vietnamese Government enacted its Foreign Investors' Law, aiming at bringing in foreign investments. Within five years, it had attracted a total of US$7.5 billion. Last year, even the United States (US) lifted its trade embargo against Vietnam. Three months after the lift, US investments in Vietnam reached US$78 million, including investments from Mobil Oil, Coca-Cola, Pepsi-Cola and Otis Elevator Company. Last year, Vietnam approved as many as 957 investment projects by foreign businessmen. Hong Kong has now a US$1.2 billion stake in Vietnam and ranks second to Taiwan in investments put in by the Four Dragons in Asia.

I believe the Hong Kong entrepreneurs are sharp-eyed people. Judging from Hong Kong's investments in Vietnam alone, we can see that Vietnam is in the heyday of its development. I hope, therefore, Members who oppose the Honourable Mrs Selina CHOW's motion on humanitarian grounds can give the matter some careful consideration. Should we abolish the first asylum policy and let the boat people return to Vietnam and flourish economically on their own Land? Or, should we retain the first asylum policy and continue to let the Vietnamese come to Hong Kong to live in deplorable conditions in the camps? Which is more humanitarian among the two alternatives?

Today's motion also brings home a very important message. It is the repayment of the HK$1 billion debt owed by the United Nations High Commissioner for Refugees (UNHCR). The issue has been a major concern of the public for years. On 30 June 1993, and again on 2 November this year I put a question to the Government. On both occasions, I asked about a time-table for repayment by the UNHCR and what responsibilities would the British Government bear if the UNHCR failed to repay all the outstanding debt after 1997. However, the written replies I received from the Secretary for Security were far from specific. They only reiterated the Hong Kong Government's duty to remind the UNHCR regularly. These reminders only served to elicit regular promises from the UNHCR, but the reminders and promises never included a time-table or have any contractual effects. So do they mean anything to the Hong Kong people?

The situation is getting worse. With the debt increasing, it is understandable that people are losing faith. Even the Director of Audit in his recent audit report also queried the ability of the UNHCR to repay. According to the calculations by the Director of Audit, the present outstanding debt of $1 billion would take the UNHCR 50 years to repay in full. Fifty years is not a short time, and this means repayment would straddle 1997. DENG Xiao-ping said things would remain unchanged for Hong Kong for 50 years after 1997; but would the United Nations (UN)? If the UN then fails to repay, who should we turn to for the outstanding debt?

When the Secretary for Security answered my question last time, he made it clear that the United Kingdom (UK) was not a party to the Statement of Understanding signed in 1988. So the recovery of the debt has nothing to do with the UK. In the circumstances, is the Special Administrative Region (SAR) Government going to hire some debt-collection companies to send some muscular tattooed men, chewing a straw in their mouths, to spray threatening red paint at the door of the UN? Therefore, the Hong Kong Government is duty-bound to respond to the queries of Members and to clear the suspicion among the public.

I suggest that the Government should:

sign, as recommended by the Director of Audit, immediately with the UNHCR a binding contract or loan document to make the outstanding monies a formal debt owed by the UNHCR to the Hong Kong Government;
draw up immediately a repayment time-table to fix the very basic amount of annual repayment which may be adjusted taking into consideration the financial position of the UNHCR;
review the current follow-up action and expediting work undertaken by the Hong Kong Government to ensure that the outstanding debt can be repaid within the least amount of time.
request the UK to undertake, as a matter of obligation, to recover on behalf of the future SAR Government any amount that remains outstanding after 1997; and
finally, press the UK Government to take up the responsibility to settle and take care of all those boat people who fail to return to Vietnam before 1 July 1997.

I hope the Government can commit itself in respect of the above in today's debate. With these words, I support Mrs Selina CHOW's motion, and oppose the Honourable LAW Chi-kwong's amendment.

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

MR LO SUK-CHING (in Cantonese): The Vietnam War was started by the United States but, after the war, the heavy burden of Vietnamese refugees has been laid upon the shoulder of Hong Kong people, only because Britain inflicted the "port of first asylum" policy on Hong Kong in 1979. In these 16 years, Hong Kong has taken in some 200 000 Vietnamese boat people and spent about $6 billion to $7 billion. At present, more than 22 000 boat people are still stranded in Hong Kong. When can they be all repatriated? The United Nations High Commissioner for Refugees still owes Hong Kong some $1 billion. When can it be paid back in full? Will the Commissioner still recognize his/her liability to this debt after 1997? These are all unknowns.

As the European and American countries have basically ceased to act on their promise of accepting the boat people stranded in Hong Kong in the past few years, their number keeps increasing. After Hong Kong began implementing the screening policy in 1988, all boat people who are not refugees are regarded as illegal immigrants and can only move in closed camps to wait for their turn to be repatriated. Nevertheless, as Hong Kong is still a port of first asylum, there is no way to stop the influx of boat people into Hong Kong. On the contrary, because of the open camp policy, the refugees can go out to work freely. This has not only caused considerable nuisance to the people living in the vicinity of the camps but also attracted more refugees to come to Hong Kong. And in 1989 there were over 35 000 boat people in Hong Kong. Of course, this did not include those who had been swallowed up by the sea or killed by pirates on their way here.

After the implementation of the forced repatriation policy in 1991, the situation improved somewhat. But in the last couple of years, the American politicians' advocacy of re-screening the boat people has again sparked off illusions in the mind of the boat people stranded in Hong Kong and the progress of repatriation has thus come to a standstill. Only 3 000 were repatriated last year.

To really resolve the boat people problem, the only way is to abolish the port of first asylum policy first. This is the core of the whole problem and we must suit the remedy to the case. The reasons held by those who oppose the abolition of this policy are nothing more than: (1) damage to Hong Kong's international reputation; (2) inhumanity.

The neighbouring southeast Asian countries which have been troubled by Vietnamese boat people have abolished the port of first asylum policy one by one but their international reputation has not been damaged. In implementing this policy, we have spent large amounts of public funds which has strained our resources for building public housing and hospitals. As a result, residents in the squatter and temporary housing areas, the cage home dwellers and households in crowded accommodation in the territory are deprived of the chance of having their environment improved; and the sick in Hong Kong cannot receive the medical care that they deserve.

Hong Kong, as one of the most crowded places in the world and with limited resources, in order to stop the Vietnam boat people from coming into Hong Kong, cannot but implement the closed camp policy. Under the port of first asylum policy, we cannot refuse the entry of the boat people; but on the other hand, we have no choice but to lock them up in closed camps for a long time. Is this humane? Particularly, is it humane to keep children in captivity since their birth? Is it humane to the Hong Kong residents who have been deprived of the resources and have to bear this heavy burden? Again is it humane to those Vietnamese boat people who have been lured to come to Hong Kong by this port of first asylum policy and end up being buried in the sea? What is really humane is to have them settled or sent back to their homes so that they will live freely in their own country!

The port of first asylum policy will also become a heavy burden to the future Special Administrative Region Government. I hope that this Council will urge Britain to discharge her responsibility of resettling all the boat people stranded in Hong Kong and ask the United Nations High Commissioner for Refugees to pay back all money he/she owes to Hong Kong before 1997. These are my remarks.

MR BRUCE LIU (in Cantonese): Mr President, the problem of Vietnamese migrants is a burden forced upon the Hong Kong people by the British Government. Therefore, the British Government has an absolute obligation to completely solve this problem before 1 July 1997, to take care of and settle all the Vietnamese migrants who cannot be repatriated before the change of sovereignty in 1997, and to demand repayment of the debt which the United Nations High Commissioner for Refugees (UNHCR) owes the Hong Kong people. This is an unshirkable responsibility for the British Government. On humanitarian grounds, the Hong Kong Association for Democracy and People's Livelihood (ADPL) is against the abolition of the policy of Hong Kong as a port of first asylum.

In 1979, without first consulting the Hong Kong people, the British Government signed an agreement on behalf of Hong Kong in Geneva, making Hong Kong a port of first asylum. The Executive Council was asked to adopt this resolution only after the signing of the agreement. We have no alternative but to accept it. For more than 10 years, we have spent more than $7 billion on screening, detaining and looking after the boat people. We have accepted that on humanitarian grounds. In recent years, there have been continual rioting, escaping and fleeing of migrants at detention camps, causing serious disturbance and pressure to the mental and psychological state of the Hong Kong people. However, we have also accepted all these incidents.

What makes us disappointed is that the British Government only pays lip service to human rights and humanitarianism. When it is time to shoulder some responsibilities and pay some prices, Britain will only act evasively and just hum and haw. The ADPL has requested the British Government to shoulder the responsibility of accepting and settling all those remaining Vietnamese migrants who cannot be repatriated before 1 July 1997. The Governor, however, said this was a "horrible" suggestion. The UNHCR owes Hong Kong $1 billion in advancement and they only repay $20 million annually. The Hong Kong Government said, "There is no reason to think that the UNHCR will not repay the debt." This has reflected a lack of enthusiasm in demanding the repayment. So the former is being hypocritical and the latter is trying to be generous at the expense of the Hong Kong people. Between justice and the national interest, the British Government has chosen the national interest without the least hesitation. Under the cloak of a civilized country, the focus of the British Conservative Party is just on practical interests.

The ADPL reiterates that the British Government should solve the problem of Vietnamese migrants before 1997, otherwise, Britain has to "underwrite" the obligation to accept and settle all those stranded Vietnamese migrants who cannot be repatriated before the change of sovereignty. In addition, in case the Hong Kong Government cannot secure the repayment of the debt from the UNHCR successfully, the British Government should perform its obligation as the suzerain power to advance the repayment to the future Special Administrative Region Government.

The ADPL is against the proposal of the Honourable Mrs Selina CHOW of the Liberal Party to abolish the policy of Hong Kong as the port of first asylum on three grounds. First, it is against humanitarian principles to turn a blind eye to lives that are in peril; secondly, this will tarnish the international reputation of Hong Kong; and thirdly, there is no need to abolish the first asylum policy now.

In a civilized society, human rights should be respected. For those migrants who have drifted and suffered a lot in the rough seas for months, there is no question of towing them back into the sea and ignoring the safety of their lives. Based on humanitarian grounds, we have to look after the migrants who have come to Hong Kong temporarily. We have to pay the price to be humane.

Secondly, it will tarnish the international reputation of Hong Kong if we abolish the first asylum policy unilaterally and hence break the commitment to international duty unilaterally.

Thirdly, there is simply no need to abolish the first asylum policy now, and this is also the most important point. There are already not many Vietnamese migrants arriving in Hong Kong in recent years, with only 12 in 1992, 101 in 1993, 363 in 1994, and some 400 arrivals up till now this year. At present, the problem which Hong Kong is facing is not a large influx of migrants, it is the large number of migrants who are held up in Hong Kong. The most important task now is to step up the pace of repatriation, rather than arguing over the asylum policy. In addition, even if the Hong Kong Government agrees to abandon the first asylum policy, our marine police anyway will not drive the boats of migrants back into the sea based on humanitarian grounds.

According to some legal academics, the first asylum policy is an agreement reached between the British Government and the international community. Britain will no longer be the sovereign state of Hong Kong after 1 July 1997, therefore the first asylum policy will be lapsed. From this, we can see that the motion moved by Mrs Selina CHOW to abandon the first asylum policy is really redundant. Lastly, I would like to raise two points in response to the proposals of the Refugees Concern Group.

I am very disappointed after I have read their submission carefully because the hidden motive behind the submission is not spelt out. In fact, what they feel most unhappy about is that the Hong Kong Government has not carried out the screening policy properly. They would like to see another screening exercise for the Vietnamese migrants now stranded in Hong Kong.
The submission also pointed out that there are only a few migrants arriving in Hong Kong after 1991. However, what they have not said explicitly is that, even if Hong Kong abolished the first asylum policy, the Hong Kong Government would still have to accept the migrants and carry out the screening process when they come to Hong Kong. In other words, the status of Hong Kong as a port of first asylum will not change anyway. Therefore, by quoting the submission of the Refugees Concern Group, Mrs Selina CHOW is just confusing us rather than strengthening her arguments.

Based on the above views, the ADPL supports the amendment of the Honourable LAW Chi-kwong.

These are my remarks.

MR CHEUNG HON-CHUNG (in Cantonese): Mr President, regarding the issue of Vietnamese migrants (VM), I would like to start my speech by telling Members the experience of a VM. On a night when the wind howled and the sea roared, a VM family, with both old and young on board, had used up all their savings and ventured out to the rough sea just for the purpose of pursuing freer and better lives. On the boundless sea, several boats fully-loaded with VMs were also under way but, at the outset, the VM's destination was not Hong Kong. On their way, the closer they got to Hong Kong, the more they wanted to give it a wide berth because Hong Kong was a port of first asylum. When they were in the open sea battling with storms and waves, the luckier ones survived while the unlucky ones got drowned in the sea. The survivors ultimately arrived in Hong Kong and Hong Kong took them in. In fact, from the very beginning when they decided to flee, they had never considered coming to Hong Kong. What was more, they even tried their best to stay away from Hong Kong waters. Why? It was because Hong Kong was a port of first asylum and the whole family would be sent to VM camps upon arrival. After being admitted to the camps, they would be locked up like prisoners. This ran counter to their original intention of fleeing from their home country. When these migrants are screened out as economic migrants after going through the status determination procedure, they would have to wait for repatriation to Vietnam. Since they could not be resettled overseas, they could only accept the arrangement of repatriation. However, since they heard that the United States (US) Government was going to review the screening policy of Hong Kong, the VMs thought that there was still some hope of resettlement in the US or in other western countries. They decided to wait for such a chance and they kept waiting instead of choosing to go back to Vietnam. This real-life example shows clearly that the destination of these VMs has never been Hong Kong. The policy of providing a port of first asylum will only result in more VMs losing their lives at sea.

The policy of the port of first asylum brings benefit to neither the VMs nor Hong Kong. On the one hand, it makes even more VMs risk their lives to by-pass Hong Kong; on the other hand, it also runs against the aspirations of the VMs while creating many social problems in and constituting an economic burden on Hong Kong. In fact, it is even more humanitarian for the VMs to stay in Vietnam. If they want to go to other places, the Hong Kong Government should only help them repair their boats and give them the necessary provisions so that they can go to whatever country they want. It would be more in line with the need of the VMs. However, at present, the VMs now being detained in VM camps are, in general, emotionally disturbed because they do not know what their future holds. Their hopes have now gone up in smoke and they are being detained in closed camps over prolonged periods. With growing dissatisfaction, even more ethnic conflicts will result. The repeated chaos and unrest that broke out in the VM camps serve as evidence of the fact that the VMs are extremely dissatisfied and they would try every means to give vent to their fears and dissatisfaction. In each chaotic incident, there were casualties and the community had diverse views with regard to the injured people. If it is the VMs who are injured, the international community would accuse Hong Kong of being inhuman; however, the fact shows that it is the VMs who deliberately start the conflicts. If there is enough evidence to prosecute them, then once they are convicted and sentenced, they would have to serve their prison terms in Hong Kong, thereby delaying further the time for them to be repatriated to Vietnam. If we do not prosecute those who deliberately create troubles and injure Correctional Services Department (CSD) staff, it would be tantamount to not enforcing the law, and the morale of the staff would be dealt a serious blow. This has really thrown the Hong Kong Government into a dilemma.

The VMs stranded in Hong Kong have been burdening Hong Kong and causing social unrest. Furthermore, it also exerts pressure on the provision of public facilities. Take for example the Prince of Wales Hospital in Sha Tin. Since it has to allocate some of its resources to serve the VMs, this has profound impacts on the provision of medical services to the residents in New Territories East. Those who seek treatment at the Accident and Emergency Department would have to wait for longer periods. This would have some impact on law and order in our society. The economic burden is even more shockingly heavy. According to the data provided by the Government, in this financial year, the expenditure for providing the basic necessities of life to VMs is to the tune of $740 million. This means that the expenditure spent on a VM a year is $35,000, representing about $95 a day and that has not taken into account the expenditure incurred by the deployment of CSD staff, police officers and the allocation of other social resources. Upon comparison, each elderly person receives only a meagre Comprehensive Social Security Assistance (CSSA) allowance of about $50 to $60 a day. What an irony! No wonder the people of Hong Kong complain to the Government that it treats the VMs even better than it treats our own elderly population. However, although Hong Kong so well-treats the VMs, it is still subject to international criticism that Hong Kong is inhumane. Is it fair? Furthermore, the United Nations High Commissioner for Refugees (UNHCR) still has not repaid the money owed to Hong Kong as regards the expenditure we spent on the VMs. It remains doubtful whether all the overdue payments can be settled after 1997. Hong Kong has spent enormous social and economic resources on the VMs and we have shown our care and sympathy, but we are still being reprimanded by the international community. Hong Kong people feel deeply aggrieved. We can still see from the television that many VMs are dissatisfied with the people of Hong Kong. No wonder more and more Hong Kong people show discontent towards the VMs.

Western countries, in particular the US which is the leader of the international community, on the one hand shout loudly that they respect human rights, while on the other hand they blatantly trample upon human rights. They adopt double standards on the treatment of boat people. Insofar as the boat people from Haiti are concerned, the boat people would be promptly returned to their home country upon arrest. However, regarding the screening policy for VMs as adopted by Hong Kong, we can see only a lot of nitpicking. Their criticism therefore can hardly be convincing. On the question of trampling upon human rights, there is a real-life example from Florida of the US where we can see (from the newspaper) that the prisoners are shackled and manacled when they sweep the streets. This is a grossly degrading act upon a person's dignity. According to the spirit of The Torture Convention, they obviously have infringed upon human rights. However, has the international community ever criticized them? Have human rights organizations ever commented on this problem? Is it true that "Might is right"?. The US on the one hand tramples upon human rights but on the other hand does a lot of finger-pointing at Hong Kong's screening policy on the pretext of human rights. I believe that the US is not qualified to give any criticism. Shut up, please, the US Government!

The United Kingdom (UK), as a signatory to the international covenant, signed the agreement on VM on behalf of Hong Kong. Shall Hong Kong continue shouldering the responsibility after 1997? With the change of sovereignty in 1997, the Chinese Government has made it clear that the VM problem must be completely solved after 1997. I believe the UK Government dare not make a commitment because it is worried that another exodus would be triggered if the VMs believe that they would have a chance to be resettled in the UK. This is understandable. However, this is the business of the UK Government.

The Democratic Alliance for Betterment of Hong Kong supports the original motion moved by Mrs the Honourable Selina CHOW but opposes the amendment moved by the Democratic Party.

I so submit. Thank you.

MRS MIRIAM LAU (in Cantonese): Mr Deputy, Hong Kong has been troubled by the problem of Vietnamese migrants (VM) for almost two decades. Though experiencing all kinds of hardships and perils in the said period, Hong Kong is still committed to, without any reservation, taking up the heavy burden of being the port of first asylum. For the sake of the VM, Hong Kong has already put in a lot of resources. Hong Kong is only a tiny piece of overseas dependent territory of the United Kingdom, yet we have to spend hundreds of millions of dollars and put in enormous manpower and material resources to take care of the VM. The burden on Hong Kong is really very heavy when compared with the resources that are put in by those western countries which always claim that they uphold democracy and subscribe to humanitarianism. In terms of the size of our population and the availability of land resources, our burden is totally disproportionate. To borrow the wording of the charge so often laid by the Independent Commission Against Corruption (ICAC) ─ "pecuniary resources disproportionate to the official capacity", Hong Kong's burden in taking care of VM is disproportionate to Hong Kong's capability.

There is virtually no international assistance offered to Hong Kong. Those countries such as the United Kingdom, which is our sovereign, and the United States, which has always been claiming that they uphold human rights, should offer Hong Kong the assistance we need. However, no assistance has ever been offered and Hong Kong has to, though not without pain, bear the burden for 20 years. I believe that most Hong Kong people would share my feeling. We cannot help but ask: "How much longer we have to endure? How much longer we have to sacrifice?" There should be a day when we will see light at the end of the tunnel. On this ground, I agree entirely that the Government should abolish as soon as possible Hong Kong's status as a port of first asylum, so that we can extricate ourselves from the heavy burden of VM as fast as possible. In fact, at present, Hong Kong should not and need not continue committing itself on a long-term basis to this responsibility. First of all, Vietnam itself has gone through major and desirable changes in the past 10 years in terms of politics, economy and people's livelihood. She is progressively advancing from poverty, underdevelopment and closed politics to opening up and reform. It is clear to all that the economy of Vietnam is budding and growing. That can never be denied. Therefore, we should not regard VM as political refugees, nor should we presume that they would surely be subject to political persecution, and therefore they should be resettled in other countries.

Secondly, the international political climate and attitude have changed. The United States, which claims to be the leader of western countries, has also undergone fundamental changes in terms of their views towards VM. They no longer insist on holding that the VMs should be given refugee status. Therefore, if Hong Kong can genuinely make a decision at this very moment that the status of a port of first asylum be abolished, I believe we need not worry about international pressure resulting as we did in the past, nor need we worry that humanitarians will accuse us of being irresponsible.

Thirdly, the economy of Hong Kong for the past few years were sluggish, all trades were declining and the unemployment rate was high. It shows that Hong Kong's economy is now in dire straits. Hong Kong is no longer capable of shouldering the responsibility of caring for tens of thousands of VM currently stranded in Hong Kong. This would only further stretch our already limited resources.

Fourthly, for the sake of detaining the VM, the Government has deployed many Correctional Services Department (CSD) staff to man the VM camps. That has resulted in the lack of manpower to man the already over-crowded prisons in Hong Kong. The detainees would easily feel bored since the camps provide only limited space for them to move around. In addition, some of the VMs' experiences in warfare and struggles have made them become pugnacious and unruly. They always create troubles inside the camps and would seek to vent their anger by precipitating clashes with the law enforcers. The many detainees' transfer exercises conducted in the past and the discovery of home-made weapons inside the camps reflect that the VM can be quite ferocious and tough. All these incidents have greatly disturbed the CSD staff and their morale has already been adversely affected. In addition, under the Orderly Repatriation Programme, CSD staff are duty bound to escort the VM home. Outsiders can hardly understand that feeling. The recent rise in the wastage rate of CSD staff is, to a certain degree, directly linked to the pressure exerted upon the CSD staff by the duty of managing the VM camps. So long as the VM are still here in Hong Kong, the manpower and resources of correctional institutions will still be under heavy strain, thereby indirectly affecting the chance for Hong Kong to penalize and rehabilitate local prisoners. This is really worrying.

Lastly, I must advise the Government that laws and policies should change with the times in order to cope with the current social situation. Since the international community's views towards VM have gone through major changes, the Hong Kong Government really should re-orientate its VM policy by expeditiously abolishing the status of Hong Kong as a port of first asylum as well as solving the problem of the VM stranded in Hong Kong at the earliest opportunity. This is what the community aspires to and it brooks not a moment's delay.

Mr Deputy, I so submit in support of the original motion.

MR JAMES TO (in Cantonese): Mr Deputy, today's motion could provide an opportunity for all Members to unite together and force the Government to do something. However, if the first asylum policy is debated, I trust our strength of co-operation will only be split by the pressure from the Government.

I have heard some distorted views just now, and I must state my position. The Honourable James TIEN and the Honourable Mrs Miriam LAU said Vietnam has been changing for the better, and is stable politically and economically. I cannot agree with them more. At the same time, I must point out that this contradicts the allegation by the Honourable Mrs Selina CHOW that our present policy has attracted Vietnamese migrants to come to Hong Kong. The reason is that if Vietnam had been so prosperous, those non-political refugees should not have come. These refugees, as we can see in the last few months or the last couple of years, amount to just a small number. Mrs Miriam LAU also said we should not assume that they are refugees. There has never been such an assumption in the first asylum policy. The question is when they come, they will have to be screened.

Meanwhile, the first asylum policy was linked to unemployment, the problems faced by officers of the Correctional Services, Social Welfare, and even medical services; and the list could go on. One can suggest such linkage if one proposes to abolish the first asylum policy 10 or 20 years ago, but not now. If the boat people came, what should we do? Abolishing the first asylum policy, if I have not misinterpreted what Mrs Selina CHOW said, would mean that we need to stop the boat people from coming, wherever possible. We need to turn away even one or two of them who come. The most we can do, for humanitarian reasons is give them water. In other words, we need to drive them away into international waters. This is not a humanitarian way of treating the boat people. We are not being humanitarian when what we do is just give them water. If the boat people do come and we need to drive them away, who should be doing the job? The army? The police? We need to think about this. Well, there are others who have commented that boat people are attracted by the first asylum policy. Facts over the last two years prove that they are not.

Another view is that a re-screening exercise proposed by the United States would trigger off a new influx of boat people. Frankly speaking, changes have already taken place in the last few months, but there has not been an influx of boat people. On the other hand, international co-operation is needed if we want to repatriate the boat people stranded in Hong Kong now. What would be the outcome if we unilaterally abolish the Comprehensive Plan of Action? The only outcome would be reproach by the international community. We would not even be able to ensure that we could secure the consent of the international community on the repatriation of all the boat people back to Vietnam, or accepting the Vietnamese refugees stranded in Hong Kong.

Furthermore, the so-called Track II proposed by the United States Government entails screening in Vietnam. If the screening were to be done in Hong Kong, the Democratic Party would raise an objection. Mrs Selina CHOW was using what the Refugees Concern Group said for her support. She said even the Group, which had been concerned about the Vietnamese boat people, agreed to the abolition of the first asylum policy. I hope she understands that she and the Group "are making different dreams in the same bed".

The Group wanted to abolish the first asylum policy for some hidden purposes. They hoped the boat people stranded in Hong Kong could be screened locally. Do Mrs CHOW and the Liberal Party agree with the Group's proposal to do re-screening here? The Democratic Party is against this proposal. I hope Mrs Selina CHOW would not use what the Group said to support her argument just because the Group agreed that the policy of first asylum should be abolished. Mrs CHOW should not think that their objective is the same as hers. In fact theirs is different from hers. Again, there are those who said we should not be worried even if we abolish the first asylum policy. When the boat people or refugees come, we may treat them as those arriving in Hong Kong from other countries. That is, we conduct a screening to find out whether they are boat people or refugees. If that is the case, that would mean that we need to lock them up first and then conduct a screening. Those who found to be non-refugees would have to be repatriated. So what difference does that make, compared with our present first asylum policy. Well, it may be said that this is not really what we intend to do. What we mean is we turn them away immediately without asking. Such a policy is inhumane. What if one of them is a refugee? Do we still drive them all away into international waters?

Well, there is another view saying that the United States and Vietnam have resorted their diplomatic relations now. So genuine refugees should be able to seek asylum at the United States Consulate in Vietnam. I absolutely agree. Yes, they can actually go there. Hence it is very unlikely for an influx of boat people to be triggered off. But if there is someone who does not know about or chooses not to use this channel, and this person comes to Hong Kong but we drive him away into international waters, are we doing something humane?

A number of Members said just now that locking up the boat people in Hong Kong is not humane. The Honourable LO Suk-ching also said so and I agree with him. But the point is we are forced to lock them up. Nevertheless, that we have them locked up now and we abolish the first asylum policy now are two completely different things. What direct relationship is there between abolishing the first asylum policy and locking up the boat people? They came here and we locked them up pending repatriation. As I have said, it has been proved that the present policy of first asylum is not an important factor that attracts the boat people to come.

Everybody says there is now uncertainty in the future. Actually, China will take over Hong Kong later and resume its sovereignty. Will the boat people still find Hong Kong attractive enough to come for screening or asylum? Facts speak louder than words. Finally, I would stress that it is of paramount importance that we should work together to compel the Government to quicken the pace of repatriation. I hope the Government can understand that what we need is to expedite orderly repatriation, however it is achieved.

The Bills proposed by some United States Congressmen have already caused the number of migrants willing to undergo voluntary repatriation to drop significantly. What we need to do is press Vietnam to increase the quota for screening, rather than wait for Track II. And then we would push ahead with compulsory repatriation and orderly repatriation. We should be able to solve the problem as far as we can before 1997. All we have to do is achieve as much as we can within our ability and make the terms attractive to the boat people. We should make them realize that their final home and ultimate hope is in Vietnam, not in Hong Kong.

Thank you, Mr Deputy.

THE PRESIDENT resumed the Chair.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, we have debated this issue two or three times already. First of all, I understand that most people in Hong Kong were once refugees or boat people themselves. But the fact is, after all, the fact. The Vietnamese are quite an ambitious people, as was demonstrated on a recent Vietnamese national day, when the Vietnamese government incorporated Beihai in Guangxi of China into its territory. This fully proves that as regards the Vietnamese boat people problem, Vietnam has paid a great price as well.

First of all, it is not so important as to whether this debate is useful or not. I want to take this opportunity to criticize the countries or parties concerned again. First, it is the United States. The Vietnamese boat people problem is entirely the consequence of the unrest in Vietnam triggered by the Americans who supported bringing down the regime of NGO Dinh Diem and his brother which ultimately caused the political refugees and boat people problem. The Americans have always adopted two different sets of so-called humanity standards in their international policies. It is a shame that many colleagues present today who have political party affiliations consider themselves Americans although they do not have an American passport or any connection with the country. These people ought to be rebuked by the people of Hong Kong. Morally, they should be rebuked. Therefore, we have to understand that the United States has to bear the entire responsibility and the people of Hong Kong have to always bear that in mind no matter how.

The second is Britain. No one can deny that Britain wants to have a graceful withdrawal from Hong Kong in 1997. But as long as the Vietnamese boat people problem remains to be resolved, I dare say that, other than the unjust possession of Hong Kong for 150 years, this incident again will always remain Britain's disgrace. Any politician, including the Governor, and any representative political party, no matter how long he or it be in power, cannot shirk this burden and historical responsibility. Therefore, apart from the United States, it is Britain who is to be rebuked.

The third is the Hong Kong Government. Why? The first choice of some of the Vietnamese boat people or refugees is not to come to Hong Kong, but when they mistakenly enter our waters, why does the Government keep them here? The Government should have tried to find out carefully whether they want to come to Hong Kong; if so, screen them; otherwise, let them go. Why lock them up? Therefore, although many say that Hong Kong is a port of first asylum and we should take care of them, in fact that is doing harm to them. We should ask them whether their first choice is Hong Kong; if so, I have nothing to say for no one asks them to come! If not, then do not offer your unrequited love.

The fourth, I must criticize the Democratic Party strongly. Why? The Hong Kong citizens have elected 19 of your members into the Legislative Council - there are even over 20 if the "unexposed" ones are counted. Does this imply that the public's first choice is in line with your party's platform? Do your actions imply that you are afraid of becoming political refugees or boat people yourselves and so you hope to protect yourselves and some voters of yours with this ordinance or policy? Why is it that when the United States is in the wrong you do not produce evidence to censure them but rather cause others to mistake you for using the United States as your backup to gain political capital here in Hong Kong?

That I so criticize you is because I love you and hope that you can really become a major party to fight for the interests of the Hong Kong people but not to get involved in the political conspiracies. Of course, perhaps I am advocating the political conspiracy theory myself but, anyway, my intention is to have this problem really resolved. You, the Democratic Party, have 10 to 20 or even over 20 votes and are the most powerful party. But up till now, I have only heard the Honourable James TO speak on behalf of those Members or the Democratic Party itself and the party leader dare not (or perhaps he will dare later) declare the Party's stance. I very much hope that you will stand up and take up your responsibility to fight for this cause. If you can do so, I promise to support you and fight for the interests of the Hong Kong people by your side.

Well, what about the things that I advocate? Of course, I hope the Hong Kong Government will take the "positive" action of making more contacts with the Vietnamese government and exert more pressure on them. I hope to let the boat people go back to their homes as soon as possible to develop their future careers. Another solution is to send the 10000-plus boat people to America on a ship hired by the Hong Kong Government. If the United States government is willing to accept them, then everything will be settled. Otherwise, the United States government will have to negotiate terms with the Vietnamese government on behalf of the boat people to have them sent home. Either of these two options can be chosen. Perhaps you may think that this is wild fantasy but it is not absolutely impossible because we have to understand that those concerned are obliged to ask the boat people whether their first choice is really to come to Hong Kong; if not, what is the point in talking about "humanity"? We, Hong Kong people, understand that if we go to Arab countries, there are a few countries which do not grant a visa to us if we are holding the "CI". What kind of reason is this? There are five items in the amendment and the greatest emphasis it lays is on "legal principle", "enforcement" and "humanity". As for "legal principle", what do the Hong Kong people lack? Why is there no "legal principle"? As for "enforcement", is it so difficult? If we let them go and escort them but not drag them out, why would they refuse to go? And "humanity", what is "humanity"? It is indeed inhumane if one is not capable of doing something but forces others to do it. They think that it is humane when they force others to lock the boat people up in Hong Kong. Worse still, all those who point their finger at us are international refugee organizations. What grounds do they have? What gives them the right to "load it" over us? What do they represent? All the cost is paid by the Hong Kong people and do we have to accept everything they say? Why do they not "look at themselves in the mirror"? Basically, the people of Hong Kong should stand up and fight for their own interests. I hope that the Democratic Party is heading towards this same goal.

Mr President, these are my remarks.

MR AMBROSE LAU (in Cantonese): Mr President, I support the Honourable Mrs Selina CHOW's motion even though it took a long time coming. Yet it is the right course of action.

Last year when Mrs CHOW proposed her motion on the issue of Vietnamese boat people, the then Honourable Member, Mr TSO Shiu-wai, put forth his amendment which urged for abolition of Hong Kong's policy as a port of first asylum for refugees. Yet his proposal was criticized as inhumane and that it would damage Hong Kong's reputation in the international community. As a result, the amendment was negatived. But this time, Mrs CHOW, in her motion, has added some words which had previously been opposed by some Members. I appreciate her attitude which conforms to a Chinese saying: Knowing that admonition was wrongly rejected, and being aware that remedy is still possible in the future. The first phrase means that we should, as soon as possible, abolish Hong Kong's port of first asylum policy. The second phrase means that it is still possible to solve the problem of boat people in the 500-odd days to come.

Mr President, the opinion that the abolition of Hong Kong's policy as a port of first asylum would be inhumane and would damage Hong Kong's reputation sounds correct but is indeed wrong.

The Vietnamese boat people, having been detained in the detention centres for long, cannot avoid committing crimes, such as fighting, causing nuisance and making trouble, even though their basic livelihood is provided for. As a result, confrontation and conflicts between the boat people on the one side and the police and the staff of the Correctional Services Department on the other side often occur. All these have done real damage to Hong Kong's reputation in the international community. Besides, the boat people in the detention centres, are isolated from the rest of our society, although they need not worry about their living. Women and children are often the victims whenever some boat people in the detention centre are making trouble. Why not sent them back to Vietnam which is now undergoing reform and has adopted an open-door policy so that they can integrate into the society of their own country? Would it be more humane than detaining them?

Mr President, at the meeting in Geneva held in March this year, it was agreed that boat people in various southeast Asian countries be sent back to Vietnam under an Orderly Repatriation Programme. Hong Kong is given the largest quota of 1 800 people a month. If this programme can be implemented, the problem of boat people will be solved before 1997. Unexpectedly, a United States, Congress Bill was proposed during the first six months of this year such that the boat people would be given another chance of screening. This makes the boat people cherish a false hope which has rendered the repatriation programme a failure. In the Governor's policy address in October this year, there was no mention of the problem of Vietnamese boat people at all. It seems that the Governor is deliberately avoiding this issue. I wonder whether he has a card up his sleeve or is merely neglecting his responsibility? I really doubt it. Yet 21 000 boat people are still being stranded in Hong Kong. Based on the average repatriation rate of 143 people a month, it will take nine years to complete the repatriation. Meanwhile, the office of the United Nations High Commissioner for Refugees (UNHCR) may have removed from Hong Kong after 1997 when British sovereignty over Hong Kong also comes to an end. By that time, not only will the $1 billion owed by the UNHCR become a bad debt, the boat people stranded in Hong Kong will also become a burden to the Special Administrative Region.

Mr President, I would like to urge Members to discard their political differences and be united with the common objective of protecting the interests of the Hong Kong people. What we have to do first is to urge the Government to abolish the port of first asylum policy. Secondly, as a Chinese saying goes, "It is better for the doer to undo what he has done", we must emphasize that the Government is duty bound to solve the boat people problem. Since the $1 billion owed by the UNHCR to Hong Kong during the past 10 years or so is unlikely to be repaid and the burden of boat people has been imposed on Hong Kong by Britain, this burden should be relieved by Britain and our Government should work out a repatriation programme and resolutely implement it. Should there be any stranded Vietnamese boat people in Hong Kong after 1997, Britain would have the obligation and responsibility to accept all of them.

Mr President, I so submit.

MISS EMILY LAU (in Cantonese): Mr President, I speak in support of the amendment put forth by the Honourable LAW Chi-kwong.

Just now the Honourable Mrs Selina CHOW said that when she moved a motion on 7 December last year, we showed our support and opposed the amendment proposed by the Honourable Alfred TSO. She also said that things have somewhat changed now. However, having heard what she said, I fail to see there is any difference in the situation, nor can I see how we can overcome the difficulties encountered in those days in actually abolishing the policy of first asylum.

The remarks made by some congressmen and people in the United States during the summer holiday this year have generated rays of hope among the Vietnamese migrants (VM) in Hong Kong, and this has worried me very much. The most worrying thing is that there might be a mass wave of VM coming to Hong Kong. For this reason, I have examined the issue of port of first asylum. On 26 July, I raised a question in this Council, and I also discussed it with the Refugees Concern Group (the group which is concerned for the VM). I learnt that they were also in support of abolishing the port of first asylum policy. But when I brooded over this issue, I realized that it was very difficult to achieve anything.

Firstly, when we say that Hong Kong is a port of first asylum, do we mean that it is only a port of first asylum for the Vietnamese people? In fact, just now Mr LAW has also mentioned this point. I believe the answer is "no". What will be the consequences should we abolish Hong Kong's status as the port of first asylum for refugees? Is it what we can refuse entry to people as long as they are Vietnamese, and that we take in others who are not? Or is it that all refugees should be refused entry? I am very much worried because we have heard of the "operation oriole" and many other operations and I have no idea how many Chinese refugees and members of democratic movements Hong Kong has taken in. If we are to support a policy whereby Hong Kong would no longer take in refugees from other place, then it is a policy I cannot agree with, especially when Hong Kong is a community that consists of refugees, and there is no telling whether we ourselves would become refugees one day. Therefore, we should deal with the refugees and VM problem compassionately.

Just now many colleagues have criticized the British for having been pretending to be humane and made Hong Kong bear this load without having consulted the Hong Kong people's views. I do agree with such a criticism that they have not consulted the people of Hong Kong. But the point is that should they really have consulted Hong Kong people at that time, would it be that every person in Hong Kong rejected this proposal of port of first asylum and ignored the Vietnamese refugees? Well, I myself as an elected Member and in view of the fact that I understand this load that we are having is so heavy now, I nevertheless find it very difficult to say for certain that should I have the power to decide in the seventies, I would refuse to do so at all costs, or even mow them down with a gun instead of having to bear this load. I think when we criticize the Government, we do so because we are not happy that it had not consulted our views and that they had not let us take part in making the decision so that we would be able to monitor the process.

Looking around at other Southeast Asia countries, we see that the United Nations does not owe them money. So why is it that the United Nations owes Hong Kong so much money? I of course have reasons to believe that the British Government has not tried its best to fight for Hong Kong in getting back the money. I believe the terms and arrangement set down at that time are very unfair to Hong Kong. Therefore, when the Honourable James TO said just now that we had to join efforts to make the Government do something more and put more pressure on it, I considered that what he said was correct. However, if one says that since we have not taken part in the decision-making, we have been made to bear this very load, implying that should we have taken part in it, we would never have taken in any refugee, then I can never agree with it.

I hope that when the Secretary for Security responds later on, he will inform us if it is true that Hong Kong will no longer take in refugees from any other place once the port of first asylum policy is abolished? I think this is a very serious matter. We all know that in the remaining 500 days or so, Hong Kong will be playing a very delicate and important role. We certainly hope that Hong Kong can still be a place for people to escape to.

Moreover, I wish to discuss the question of enforcement. Many colleagues have asked in clear terms: Are we going to tug the vessels to the high seas? I recall that years ago Miss Lydia DUNN said during a television interview with the BBC that the vessels would have to be tugged to the high seas. But when the interviewer asked her what should be done if those people came back, her answer was that nothing could be done about it, but that something must be done anyway just to let other people see what we were doing. Do we really want to do that? Do our police force want to tug the vessels to the high seas? Do members of the public want to see that? But if we do not do that, how are we going to enforce it? Therefore, I hope that Members who propose the abolishing of the port of first asylum policy or the Government will answer these questions for us.

Furthermore, on the question of international censure, some colleagues said that it did not matter. Why did it not matter? We express by means of international public opinion almost every day that the people of Hong Kong are concerned about human rights. Whoever wants to challenge the Hong Kong Bill of Rights Ordinance and restore the bad laws will meet our unanimous condemnation, and this shows that we are very much concerned about human rights. If what we do gives any country an excuse that the people of Hong Kong are practicing double standards, which means that on one hand we are very much concerned about our own human rights, while on the other hand we disregard other people. This will, will it not, seriously undermine our own grounds of reasoning? I am not getting at the 1997 issue at every turn. I am merely thinking that this is a practical problem that we have to face.

Even if we brush aside the 1997 issue, we should be compassionate as a Member of the international community. No doubt, this problem has got to be solved and no doubt the British Government has done very little, so has the Hong Kong Government. However, must we resort to abolishing the port of first asylum policy in order to solve the problem?

In fact, if Mrs Selina CHOW re-proposes the last year's motion, I believe Members will show their support. But she said that the situation has changed, and it is this extra remark that has given rise to so much unnecessary controversy today. I think it really is a shame because we ought to have been of one mind now and tell the British Government and the international community that Hong Kong has done a lot in this respect and that someone has owed us money, and therefore we hope that they can help us as far as they can. However, we should also help those VM and refugees who are in predicament.

Mr President, there is no knowing in future what kind of situation we shall be in. When my parents first came to Hong Kong, they were taken in by other people. In future, should we be in trouble, we would also hope that other people would also take us in. But first of all, we ought to take in those who are in trouble.

Thank you, Mr President.

MR JAMES TIEN (in Cantonese): Mr President, the business sector, the Federation of Hong Kong Industries and the Hong Kong General Chamber of Commerce have seldom talked about the question of Vietnamese boat people during the past two or three years. Probably, in the 70s and the 80s, so many refugees came to Hong Kong every year that everyone discussed the matter. Actually, one of the reasons is that the business sector thinks that there are now much fewer ports of first asylum and that not too many refugees are now coming to Hong Kong. On the other hand, the Honourable Mrs Selina CHOW has asked what the business sector thinks about the matter. In fact, I do not know exactly. The Federation of Hong Kong Industries and the Hong Kong General Chamber of Commerce have discussed this matter with the American Chamber of Commerce in Hong Kong, seeking their opinions.

Actually, according to most of the American businessmen, when the United States withdrew from Vietnam in 1975, the Americans might have a so-called "guilty" conscience and therefore they often spoke in favour of the Vietnamese refugees or the Vietnamese people. But today, after 20 years, the American's animosity towards Vietnam has greatly dampened; most of the American Prisoners of War have been released, and the rest might have died long time ago. Today, most of the Americans are not very concerned about the question of Vietnamese refugees; they are more concerned about setting up offices and doing business in Vietnam.

Mr President, I stayed in Hanoi for two days a couple of months ago. Although not much could be observed in two days, I did go there for observation with a few investors, not with delegates of the General Chamber of Commerce. I noticed in many places in Vietnam, people were leading a stable and peaceful life and there were signs of prosperity in every respect, especially in Hanoi but not in Saigon. However, the unemployment rate of the country still exceeds 10%, people are still earning only about US$30 a month and the living standard is still very low. It would seem that the people are not under persecution. On the surface, one cannot see any patrol of a large number of tanks or soldiers in Hanoi and the Vietnamese people should be able to earn a living in their own country. However, do we have to tug out into the high seas those Vietnamese people who are now in Hong Kong? I think that may not be necessary. I believe every Member would know that the majority of the boat people came to Hong Kong via land routes in China. Assuming that they have to be dragged out into the high seas, I once said to the American businessmen, "How did the United States deal with Haiti and Cuba? Even though you have dragged the boats out into the high seas one by one, obviously not many people have been drowned". But this is what they said, "After so many years, we do not even know if a lot of people have been drowned, but perhaps most of them have returned to their countries safely". In as far as international reputation is concerned, I think Hong Kong will not be seriously affected whether or not the first asylum policy is abolished. We often compare Hong Kong with Singapore. She has abolished the first asylum policy, but her international reputation has not been seriously affected; foreigners still invest in Singapore.

At the same time, Mr President, let me put forward the opinions of the refugees concern group on behalf of Mrs Selina CHOW because she did not have time to mention them. Of course, the Honourable James TO has mentioned them. Perhaps what I have is but a superficial understanding of the papers and the refugees concern group probably has its own "agenda". However, at least on the surface, the refugees concern group has made the following points:

First, since January 1994, among those boat people who have come to Hong Kong, no one has been screened as a "political refugee". In other words, during these two years, these people could neither go abroad nor return to Vietnam; they could only stay in Hong Kong.

Secondly, as I said earlier, the refugee concern group has noted that all other places in Southeast Asia including Singapore, Malaysia and Thailand have abolished the first asylum policy, and Hong Kong has remained the only exception. Is it necessary for us to remain so?

Another argument is the question of racial discrimination. That really means why there is screening for the Vietnamese only and why people from China and elsewhere are not subjected to the same treatment.

Mr President, this is a problem which the British Government cannot handle. I personally think that the United Nations High Commissioner for Refugees cannot repay the $1 billion that it owes us. Should we ask Britain to repay this sum at least before it leaves? We do not want to see the situation of Britain treating others to meal but Hong Kong having to settle the Bill.

Mr President, with these remarks, I support the original motion.

MR CHAN WING-CHAN (in Cantonese): Mr President, the problem of Vietnamese migrants(VM) has been harassing the Hong Kong people for more than a decade. I hope that both the Hong Kong and the British Governments can solve this problem as soon as possible. In regard to the VM problem, the stance of the Federation of Trade Unions(FTU) entails three points: First, we think that the British Government should fulfill its commitment and guarantee that the VM problem be resolved properly before 1997. Second, we think that the British Government should accept all those boat people who have been refused entry by the Vietnamese Government. Third, we think that Hong Kong should abolish the policy of being a port of first asylum for VM.

In regard to the first and the second points mentioned above, we think that they are the responsibilities that the British Government has to shoulder. The VM problem has dragged on in Hong Kong for 20 years. The most direct reason is that the British Government has made an international commitment on behalf of Hong Kong of implementing the first asylum policy from the very beginning. As a result, Hong Kong does not refuse entry of any VM. We Hong Kong people really have to thank the British Government for that! Up till now, there are still more than 20 000 VM stranded in Hong Kong. As regards our economy, there are still a lot of problems among the Hong Kong people, such as unemployment problem, housing problem and son on. Hong Kong has a high population but only limited lands. A lot of people are still living in squatter huts, cage homes and temporary houses. So while our own problems are waiting solution and are not easy to solve, we still have to take care of the tens of thousands of VM. Do the British and the American Governments care about the difficulties and problems of Hong Kong? The answer is "No". What is more, the American Government has requested that Hong Kong be "humane" in dealing with the repatriation of VM and has imposed a lot of restrictions. However, the American Government, this "big brother" who always flaunts the banners of "human rights" and "humanitarianism", applies the policy of "repatriation upon arrest" to the boat people from its neighbouring countries such as Haiti. As regards the problems of boat people and "humanitarianism", the United States actually holds a double standard. Is Hong Kong just like a lamb that can be easily bullied? From 1979 to the present moment, apart from the $1 billion lent to the United Nations High Commissioner for Refugees(UNHCR), the amount of money spent by Hong Kong on the VM problem has already accumulated to more that $7 billion. Both the Hong Kong people and the Chinese Government have already clearly indicated that the VM problem should not go beyond 1997 to be tackled by the future Special Administrative Region (SAR) Government. The British Government has the obligation and the responsibility to solve this problem before 1997 and accept all those boat people who have been refused entry by the Vietnamese Government, or at least to find a way out from them.

As a matter of fact, the FTU had proposed to abolish the first asylum policy as early as the mid-1980s. We believe that with the changing society in Vietnam, from the mid-1980s onwards, there have been scarcely any VM escaping from their home country for political reasons, and most of the VM are just looking for a better economic environment. The VM screening policy subsequently implemented has testified this point.

Mr President, we think that based on this point alone, we already have sufficient grounds to oppose the retention of the "first asylum policy" which aims to receive and help the refugees. While the society keeps on progressing, in the 1990s, Vietnam has gradually launched its open policy and reforms, and foreign investments are greatly encouraged. Besides, last year it actually re-established its diplomatic relations with America ─ its enemy in the Vietnam War. There are already new social and economic changes in Vietnam today. Why does Hong Kong still keep on receiving the VM? That is really unacceptable. With the change of times, we should not and need not continue to maintain such a first asylum policy.

Mr President, the FTU reiterates that the British Government should work out a specific timetable for the repatriation of VM so that all the VM can be repatriated before the change of sovereignty in 1997, while the American Government should be duty bound in actively assisting to carry out this task. Meanwhile, the British Government has to demand the repayment of the $1 billion debt owed by the UNHCR on behalf of the Hong Kong people.

I hope that the British Government will not just procrastinate and take the above two requests lightly. It should not leave the "resultant issue" of VM in Hong Kong and allow the problem to continue harassing the Hong Kong people.

I so submit. The three Members from the FTU support the original motion of the Honourable Mrs Selina CHOW and oppose the amendment of Mr the Honourable LAW Chi-kwong.

MR ALBERT HO (in Cantonese): Mr President, except for abolition of the first asylum policy, the Democratic Party is in support of the Honourable Mrs Selina CHOW's motion. I am not going to repeat the reasons for our support, as they have already been mentioned by quite a number of Members. Thus, the focus is still on abolition of the first asylum policy.

As a matter of fact, we have already debated this issue for a long time today, but it seems that Members are still lacking consensus and a clear definition of abolition of the first asylum policy. Mrs Selina CHOW remarked that the vessels carrying the boat people to Hong Kong should be intercepted. The Honourable Miss Emily LAU mentioned a moment ago the remarks made by Lady Lydia DUNN, an ex-Member, that if the vessels could not be intercepted and entered the area of Hong Kong, we could still try to drive them away. But does merely trying mean that they definitely have to be driven away? What if the boat people destroy the vessels and jump into the sea? This has not been mentioned. The Honourable James TIEN also said earlier that it was not necessary to take the vessels to international waters. But what exactly does that mean? Does that mean we decline to offer help even if the boat people jump into the sea? When the vessel is destroyed and cannot navigate, should we help them to the shore or drive them to the international waters? If we are not sure what it means, how can we debate on that subject?

Secondly, I have heard the Honourable Mr CHAN Kam-lam and the Honourable Ambrose LAU say that if the Vietnamese migrant (VM) problem was not to be resolved, it would become an awful mess, and it followed that the first asylum policy had to be abolished. Do they mean to force these VMs in the camps to board the vessels and then take them to international waters? I am not sure whether there is any misunderstanding. If so, it will be unimaginable. Mr President, I emphasize that it will be unimaginable.

In my view, the problem does not lie in whether it can be done or whether the marine police is willing to do the job, but in whether our conscience allows us to do so. Even the People's Liberation Army in the future agrees to do the job, we will still be unwilling and will not allow them to do so. In fact, if the definition is clarified, I doubt if the Refugees Concern Group will support Mrs Selina CHOW's proposal of abolishing the first asylum policy.

I have to emphasize again that the treatment accorded to the VM in Hong Kong is in fact merely the basic requirement that the international community has imposed on us. According to the Universal Declaration of Human Rights, when a person applies for political asylum in another country with concrete grounds, the country concerned should consider and accept his application. Members should not forget that according to Article 3 of the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, no person shall be ordered to be deported to the place where he is not willing to go if it is considered that there are well-founded reasons that this may result in his being subjected to torture or inhuman treatment. This is an obligation imposed by international law. Hence, we should not break that international law and neglect humanitarian obligation.

As a matter of fact, what are the merits of abolishing the first asylum policy? From an overall point of view, I cannot see any merits at all. What are the merits if we are not taking or driving the VM to the international waters? Will there be another influx of VM to Hong Kong ? That is totally unfounded. It is worrying that if the saying "the abolition of first asylum policy will still attract the VM" is right, our decision to abolish the policy today will then attract more VM to come. It is because from the present moment when the Legislative Council decides to abolish the policy to the actual implementation on the part of the British Government, the VM may rush to Hong Kong for fear that they cannot enjoy the rights that they deserve. I, therefore, fail to see any merits in regard to the abolition. A lot of people mention that there are many inhuman events happening in the closed camps. Unless we drive them to the international waters, I fail to see how abolition of the first asylum policy can ever help them. But I must emphasize that this action cannot be taken. I believe that this may not be the idea of the Member who has put forward this proposal.

Some organizations support the motion of Mrs Selina CHOW because they are not satisfied with the existing screening system, which they even say contains problems like racial discrimination. In fact, if the existing system is defective, we should try to improve it so that every migrant in Hong Kong can enjoy the rights given by the international law which we should respect. What we should do is to work out an objective, reasonable and fair screening procedure, whether legal or administrative. We should not deprive the VM of the only rights that they have and treat them as those people who are being unfairly treated. That is not right.

Finally, in regard to international reputation, a lot of people have criticized that the American Government is holding double standard by putting up a mask of benevolence and righteousness. Some people have also said that the British Government is hypocritical. I have no intention of defending these two countries. I only want to ask if we have to follow other people's footsteps in the conduct of our affairs? When others are not doing right and are doing against their conscience, do we have to follow them by giving up our own standard of conducting ourselves? Do we also have to go against our conscience? In my view, Hong Kong nowadays is a civilized society and there is certain development in the economy. Thus, we should not be subjected to any pressure to do anything against our conscience. There is actually no pressure at all. We should do something that is basically required. If we unilaterally and meaninglessly abolish the first asylum policy, we will not only be subjected to international criticism, but also lose our argument in forcing the other countries to fulfill their obligations by receiving and arranging resettlement for the VM.

In the past, we have exerted a lot of efforts and have gone through many difficulties. As remarked by the Honourable Mrs Miriam LAU, we have managed to earn some reputation and some compliments. Thus when coming to the final stage, we should definitely not take any fruitless action. That is meaningless indeed. Besides, this will not help us solve the problem.

Thank you, Mr President.

MR ALLEN LEE (in Cantonese): Mr President, the boat people problem has troubled us for 10 to 20 years and the issue of whether the status of a port of first asylum should be abolished is very controversial; many people are in favour of it and many others are against it. Why have we proposed to abolish the status of a port of first asylum at this time? That is because we do not have the slightest idea when the boat people problem will be solved and although the British Government has promised the Chinese Government that the problem will definitely be solved before 1997, no one has taken any positive step so far. Last year, the Hong Kong Government again told us that the problem will definitely be solved before 1997. In 1988, the Government indicated that all the boat people were expected to be repatriated by the end of 1995, all the camps for boat people would be closed and it would be unnecessary to have closed camps. This pledge has now vanished like soap bubbles.

I would also like to take this opportunity to respond to the points raised by the Honourable Miss Emily LAU. She thinks we have to be humane and she has queried whether we can tow the boats out to the high seas without exposing ourselves to reproach from the international community. I want to tell her this: I believe she has not noticed whether the United States, which puts so much emphasis on human rights, has been reproached by the international community after it towed boats out of Florida to the high seas every day some time ago? Is the United States the most humane country? Day after day, hundreds and thousands of Haitians, Cubans (earlier on) and even Fujianese from China travelled by sea across the Carribean and the Pacific and what happened to them upon arrival? Were they accepted? They were repatriated in the same way. Therefore, it would be most difficult for the United States to tell me what is humane. I visit the United States quite often. The so-called humanitarian principles and standards are empty words only. The United States will only carry out those policies which are agreeable to them and it will do nothing about the disagreeable ones. Recently, it is again the Congress of the United States which has created this problem for us. Merely by mentioning a proposal, a Member of the Congress has spoiled Hong Kong's repatriation programme. Therefore, do not discuss here with us whether it is humane or not. The country which has spoken so much on humanity and human rights is just the same as all other countries. Why did it do what it did? It did so to protect its own interests.

Now, I think we have to consider the matter in the interests of the Hong Kong people. We have taken up the heavy burden of the Vietnamese boat people since 1979. Hong Kong is therefore the most humane and wealthiest place in the eyes of the world. A tiny place as Hong Kong is has given the greatest contribution. I can tell Members that at first there were only two people in this Council who were against the status of a port of first asylum and I was one of them. Unfortunately, we did not succeed because many Members were against us. At that time when the first boat brought more than 3 000 people here, I said the situation would get out of hand if we accepted the first batch because that would lead to an influx of many others. Unfortunately, what I said has come true. Hong Kong once had a backlog of as many as 80 000 boat people. That is a very heavy burden. How much have we paid and how much money have we spent? I believe today no country can tell us what humanity means and no country will pay as great a cost as Hong Kong has. Considering that Britain cannot solve this problem, I think this Council has to be accountable to the public of Hong Kong and make the biggest pledge that we have ever made. Abolishing the status of a port of first asylum will be giving the signal that we have had enough and we cannot bear this burden any more. Therefore, Miss LAU, it is not that we are inhuman; Hong Kong is a place which is most concerned about humanity and it is the best place. Although it is not a country, we have to consider the response of the people of Hong Kong.

We have spent a lot of taxpayers' money on this problem and some of the money cannot be recovered. As regards the $1 billion which I mentioned last time, it is most unlikely that we can ever get it back. To be repaid in 50 years is like having it shelved for 50 years; it means repayable only after 50 years and it means we have to continue to take up this burden. We have to give a clear signal to the world, telling them what Hong Kong has done and they have not. Hong Kong now has the largest backlog of boat people who do not want to return to their own country. It is not that they are staying here to await acceptance by the United States. The statement made in the Congress of the United States has even caused problems to our repatriation programme of 1 800 people per month. It is therefore timely for us to speak on behalf of the Hong Kong people. We cannot continue to throw money into this bottomless pit.

We have to give the signal very clearly. I am sure that no country and no place can criticize us for doing anything inhuman. Therefore, I hope that Members from the Democratic Party will reconsider whether to maintain or to abolish the status of a port of first asylum. It is not only a question of being humane or not; we have to take action to work in the interests of the Hong Kong people. No one can criticize us. If anyone should criticize us, we can ask them in a very loud voice what they have done for the Vietnamese boat people and refugees and how much they have spent. I believe no one can argue with us. We can stand firm and we are indomitably upright on the question of Vietnamese boat people and therefore we are bold enough to raise this issue again. Last year, we exercised our tolerance for a while because we saw a gleam of hope on the question of the status of a port of first asylum. But now when there is no hope and when nobody pays any attention to us, if we who are Members of the legislature do not do something for Hong Kong on this matter, I believe the problem of these 20 000 boat people will not be solved before 1997. Now, let us think for a while. What we want to do is to solve the problem, not merely talking about humanity. Merely talking about humanity cannot really solve the problem. Is it very difficult to tow the boats into the sea? I do not think so; the United States did it.

MR IP KWOK-HIM (in Cantonese): Mr President, just now quite a number of Members have associated the abolition of Hong Kong's status as a port of first asylum with the question of humanity. I agree very much with what the Honourable Allen LEE has said just now. That we are demanding to abolish the first asylum policy does not mean that the people of Hong Kong are turning their back on humanitarianism. Quite on the contrary, I think it will be more of a humanitarian act if we abolish the first asylum policy because once we send out such a message, more people will understand that they should not harbour any illusion about it any more and that only such a place of living is in store for them in Hong Kong, thus discouraging them from taking to the high seas.

Mr President, Governor PATTEN's policy address this year is disappointing not only in his lack of commitment to addressing the unemployment problem, but also in his lack of mention on how the problem of Vietnamese migrants (VM) stranded in Hong Kong should be solved. I wonder if the Governor is also suffering from amnesia, so much so that he has completely forgotten the fact that we still have the VM problem.

Time flies without our notice as the VM problem has haunted the people of Hong Kong for two decades, taxing Hong Kong's various resources heavily. The British Government should indeed be held responsible for putting us in such a situation. At that time, as the suzerain of Hong Kong, Britain signed an international agreement in Geneva, forcing Hong Kong to become a port of first asylum for VM. Over the years, more than 100 000 VM have been taken in at various stages. According to the phased orderly repatriation programme for VM in Southeast Asia adopted at the Geneva conference on 1 March this year, Hong Kong should have been able to repatriate 1 800 VM a month, and at such rate all 21 000 VM stranded in Hong Kong could have been repatriated to Vietnam before 1997. However, things have gone athwart. Some Congressmen in the United States have proposed a Bill on re-screening of VM, raising new rays of hope among the VM who think that they might have an opportunity to emigrate to overseas countries, thus hindering the repatriation programme.

As a matter of fact, the repatriation programme has been running smoothly in other southeast Asian countries, and Hong Kong is the only place still being deeply troubled by the question. This shows that the Hong Kong Government simply lacks a comprehensive plan to deal with the VM problem and the will to carry out the plan in full. With the present snail's pace of repatriating 200 VM a month, it would take at least another 10 years before all the migrants stranded in Hong Kong could be made to leave, even if no more migrants come to Hong Kong. The Democratic Alliance for the Betterment of Hong Kong (DAB) thinks that since it was Britain which made Hong Kong a port of first asylum, and if Britain has the "conscience", then Mr PATTEN, as the Governor, should clearly explain to the public how, before the transfer of sovereignty, the Government plans to solve the problem of migrants stranded in Hong Kong, that is, to repatriate them according to schedule. Besides, Britain ought to shoulder the ultimate responsibility regarding the VM problem. But much to our regret, the Governor actually said that it would be unrealistic for Britain to take in all the migrants who would still be stranded in Hong Kong after the handover of sovereignty in July 1997, and that it would only create an illusion among the Vs that they might be able to emigrate to western countries by way of such an arrangement. Therefore, Britain would not say at this stage whether it would take in the migrants or help them resettle elsewhere. At that time, Britain acted on behalf of Hong Kong and accepted this "honour" of making Hong Kong a port of first asylum. Now in the face of the handover, it just dumps aside the migrants stranded in Hong Kong. Were it the intention of the British Government to leave this mess for the future Special Administrative Region Government to tidy up, then I think it would only create more friction in Sino-British relations.

In the final analysis, the DAB is of the view that since the VM problem has stemmed from the port of first asylum, Hong Kong's status as a port of first asylum should be discarded as soon as possible in order to solve the problem once and for all, although this might draw criticisms that Hong Kong is not humane and tarnish Hong Kong's international reputation. But in fact there has been no more fighting in Vietnam since 1979 and refugees are out of the question. Moreover, the economy of Vietnam has been fast developing and the people's livelihood has gradually improved. In addition, with the formal establishment of diplomatic relations between the United States and Vietnam, the prospects of economic development are even better. Therefore, the DAB thinks that it is time for Hong Kong to discard its first asylum policy. Looking from another angle, Hong Kong has done its fair share in terms both of money and resources for the VM over the years. Taxpayers in Hong Kong have paid $7 billion for no apparent reasons and the United Nations High Commission for Refugees (UNHCR) still owes Hong Kong more than $1 billion to date. According to a report by the Director of Audit, it is believed that with the UNHCR's rate of repayment since 1988, it will take 50 years before all the expenses can be recouped. Since the people of Hong Kong have shouldered this burden for 20 years already, there is no reason why they should still shoulder it any longer.

With these remarks, I support the original motion and oppose the amendment.

SECRETARY FOR SECURITY (in Cantonese): Mr President, let me begin by recapping briefly the progress we have made towards a resolution of the Vietnamese migrant (VM) problem since the Comprehensive Plan of Action (CPA) was agreed.

Since 1989, 47 000 migrants have returned to Vietnam; over the same period, 27 000 refugees have left Hong Kong for overseas resettlement. Today, there are still 22 000 VM and refugees in the territory. However, we have come a long way since that population peaked at 64 000 in late 1991.

We can see from this that the CPA, to which over 70 countries (include China) subscribe, has served us well over these years and remains the only internationally agreed framework for bringing to an end this long drawn-out VM saga. The CPA provides that non-refugees must go home, and we have never wavered in our adherence to that principle. Almost 46 000 migrants have chosen to return voluntarily to Vietnam. We would prefer it if all of them chose this route. However, we also recognize that some migrants are not willing to volunteer and, in 1991, we introduced the Orderly Repatriation Programme. Since then, we have returned 1 600 migrants under this Programme. In recent months, Orderly Repatriation Programme (ORP) operations have faced unprecedented violence and confrontations in the camps. But, notwithstanding these difficulties, we are determined to push ahead. Already this year, over 50% more migrants have been returned under the ORP than in any previous year. The Vietnamese Government has also agreed that the pace of ORP, should be stepped up; that is evidenced by the fact that in the last ORP exercise, we had two flights of returnees instead of one. We will continue on this course with yet another operation which commences tomorrow.

The VM problem is an international problem. Hong Kong cannot go it alone. We rely heavily on our CPA partners in moving forward, and their words and actions can impinge adversely on what we are seeking to achieve. At no time has this been more evident than in 1995.

In May this year, legislative initiatives introduced by some United States Congressmen which, by creating false hopes of rescreening and overseas resettlement for the non-refugees, caused voluntary repatriation in Hong Kong, and indeed in the southeast Asian region to nosedive. This was a serious blow to us. Since May this year, only 750 migrants have chosen to go home.

We have made representations to the United States Administration, which clearly indicate that they remain committed to the CPA, and are finding ways to solve the problem. They are fully aware of our concerns, and those of other first asylum counties. The United States Administration has now opened negotiations with the Vietnamese authorities on what has become known as TRACK II. Under these arrangements, non-refugees who satisfy certain criteria would be eligible for resettlement in the United States after they have returned to Vietnam. While the TRACK II proposal per se might not necessarily promote large numbers of VM in Hong Kong to volunteer to go home, it will reintroduce certainty into principles and targets of the CPA. We are also hopeful that implementation of TRACK II will be accompanied by an unequivocal statement from the United States Administration that there will be no further concessions to VM in camps, thus ending the current impasse in voluntary repatriation generated by false hopes of resettlement elsewhere.

Specific Timetable

I would like to be able to set out for Honourable Members a firm timetable for the closure of our camps. However, this is not possible, because the cards in this game are not all in our hand. We rely on the co-operation of others and, in particular, that of Vietnam to step up the pace of repatriation. It is for this reason that the Refugee Co-ordinator will hold talks in Hanoi, on 4 December, with the Vietnamese authorities, with a view to expediting the clearance of VM for return and simplifying the associated procedures. The rate of return is determined, to a large extent, by voluntary repatriation, the pace of which has proved to be acutely sensitive to events outside our control. However, the lack of a detailed timetable in no way calls into question our determination to bring this saga to an end as soon as possible. It remains our objective to close the camps before July 1997.

UNHCR Debt

The community and Honourable Members are rightly concerned to see the early repayment of the one billion dollars which the UNHCR owes the Hong Kong Government. We have a contractual debt of $1 billion which the UNHCR have repeatedly assured us that they will discharge. They continue to repay annual sums which represent an increasing proportion of the amount spent, in light of the reduction of the VM population in our camps. Their ability to repay fully the obligated amount is, of course, dependent on the level of donations from the international community. In that connection, the attention of donor countries has been drawn to the debt at both the Fifth and the Sixth CPA Steering Committee meetings. Members may rest assured that we shall continue to remind the UNHCR and the international community of their obligations. In our efforts, we shall be assisted, as we have been in the past, by the Government of the United Kingdom, which have also contributed over one billion dollars towards the VM programme in Hong Kong. The United Kingdom have also taken over 15 000 Vietnamese refugees from Hong Kong, making them the third largest country in receiving refugees from Hong Kong.

First Asylum

Let me now turn to the policy of first asylum. Firstly, I would like to respond to a point raised by the Honourable CHIM Pui-chung. When a Vietnamese boat enters Hong Kong waters, we will clearly ask whether the people on board want to come to Hong Kong. If they say that they do not wish to stay in Hong Kong, and wish to continue their voyage to another country, our marine police will reprovision them as necessary and let them leave our waters, instead of blindly detaining them.

Since the outset of the human exodus from Vietnam in 1975, Hong Kong has been a port of first asylum. This was the price we paid for international co-operation in resolving this problem. Abolition of the policy would not help in any way to accelerate the repatriation of the 21 000 migrants in our camps. On the contrary, such a move would degrade our humanitarian standing in the international community, and jeopardize our efforts to seek international co-operation to draw this whole chapter to a close.

Our problem now is no longer a massive influx of boat people. Those days of massive arrivals have along gone. Arrivals since 1992 have fallen to a few hundred a year. In any case, the profile of new arrivals have clearly changed. Of the some 400 VM who have arrived so far this year, only 65 put forward a claim for refugee status. Of the new arrivals now in the territory, about half have been here at least once before. What we are now facing is a pattern of illegal immigration to Hong Kong to find working opportunities. The answer to that particular problem lies, not in denying asylum to any Vietnamese who reaches our shores, but in swift repatriation to Vietnam of those who have no claim to refugee status. Bilateral arrangements which would achieve this objective were envisaged by the Fifth CPA Steering Committee meeting, which agreed that Vietnamese nationals arriving in the region after 14 February 1994 should be treated in accordance with national legislations and internationally accepted practice. We have since put proposals to the Vietnamese authorities to establish bilateral arrangements which, if implemented, should step up the pace of return of VM newly arriving in the territory. This matter will also be on the agenda of the Refugee Co-ordinator's visit to Hanoi. But the proposed arrangements should not mean, nor does it require us to abandon the first asylum policy, nor are they inconsistent with the first asylum policy.

Abolition of the policy of first asylum would require our marine police to push off boats, which could be unseaworthy, which could have women and children on board. This would be contrary to the humanitarian principles on which our society is founded. It would also feed ammunition to the critics of our repatriation policy, who seek to undermine what we have set out to achieve ─ the early return to Vietnam of all 21 000 migrants in the territory in a human way. It will be a contradiction if we on the one hand hope for a speedy solution while on the other advocate abolition of the first asylum policy. Abolition of the first asylum policy would only compound our difficulties.

United Kingdom to take VM still in the Territory in June 1997

The motion before this Council calls again for a commitment from the United Kingdom Government to take all migrants who have not been repatriated by 1 July 1997. This proposal is unhelpful. We have clearly seen the damage caused by legislative initiatives in the United States Congress. Suggestions which encourage the non-refugees to believe that they may be resettled elsewhere, if they delay their return to Vietnam until 1997, undermines our repatriation efforts; it strikes a blow at the very heart of the CPA principle that the non-refugees must go home. Particularly at this juncture, we should be seeking ways to reinforce, and not to dilute that message. I can well understand Honourable Members' and the community's sentiment, and we all share the wish to see an early end to the VM problem. But we should not let our heart rule our head. What we need is clear thinking on the best means of achieving our objective of early repatriation of the 21 000 VM in camps here. Calls for the United Kingdom of take every one who may be here in 1997 is guaranteed to make it impossible to achieve our common objective.

Conclusion

The Administration share the deeply felt concerns of Honourable Members about the VM problem. We shall continue to do everything possible to accelerate the repatriation of all the Vietnamese in our camps. I hope that we will get the co-operation, which we have been promised in Genva in March this year, from the Vietnamese authorities as well as the international community in bringing this long drawn out saga to an early close.

Thank you, Mr President.

PRESIDENT: Mrs Selina CHOW, do you wish to speak? You have five minutes to speak on the amendment?

MRS SELINA CHOW (in Cantonese): Mr President, first of all, I would like to respond to the Honourable James TO by saying that I share the same wish cherished by him that Members can reach a consensus on this issue. But I hope Members will not become diehards and stick to empty principles in dealing with problems. They should not turn a blind eye to the reality that problems have to be solved with more feasible solutions when there is a change in the situation.

In regard to the Honourable Miss Emily LAU's statement, I was very surprised to hear her saying that she did not understand why I put forth this motion. In fact, I can tell her as well as all Members that my inspiration came from a statement made by Miss LAU on the television during her election campaign. She said she would have to reconsider whether Hong Kong's policy of being a port of first asylum should be abolished because many concerned people had talked to her on this issue and she thought that it might be necessary to reconsider it. In fact, when I initially proposed this motion, I needed three Members' signatures to support me under the old system of Council meeting. Miss LAU also signed on it. But later these signatures were not submitted because they were no longer required. I just wonder whether she has lost some of her memory?

I in fact learned from a survey that eight Members from the Democratic Party had responded to the survey and expressed support for my motion. I am not sure whether the present case is because they have not applied for leave to vote on individual basis or their opinions have not been conveyed to the top core of their Party.

In regard to the question of justifiable grounds raised by some Members, I have summed up several points. The Honourable LAW Chi-kwong said it should be impossible to abolish the policy from a legal perspective because Britain is a signatory of the covenant, which should not be entrenched upon. In fact, we have learned that there is an international agreement by which the screening policy can be changed. The fact is that Britain does not want to do that, not that it cannot do so. Members should be very clear about this point. Someone has mentioned our reputation in the international community. What is the international community? Who is the international community? It is the United States. The United States is most hypocritical. What it has actually done is worlds apart from what it has persuaded Hong Kong to do. Mr Allen LEE has already mentioned how it has expelled illegal immigrants and how we are advised to treat the Vietnamese boat people. All these show that the United States is very hypocritical. If we compromise under the threat and blackmail of this so-called "international" force, I think we will not only disappoint the Hong Kong people, but also stand truth on its head. As many Councillors have just said, Hong Kong has fulfilled much more obligations and been much more humane than any other places, and has contributed much more than anybody else.

As regards the question of humanity, I would like to ask: What is humanity? Now our so-called humanity is to give other people some false hope. Even though it is very clear that we have no way to help them, yet we have acted in such a way that a false message is conveyed to them. This is fact inhumane. Obviously it is inhumane for Hong Kong to keep on giving asylum to those Vietnamese who have no hope of being recognized as refugees. We are now having our door wide open to accept these boat people whom we clearly know will be sent to live in a deplorable environment. I believe no one would like to see any more children grow up in such an environment. Yet these people are still allowed to come in. This is really inhumane. The Secretary for Security has just said that there are some 400 people recently arrived in Hong Kong. Most of these 400-odd people in fact cannot meet the criteria for refugee status and about half of them have come to Hong Kong the second time. Why? Because we throw our door open to let them in. So, the humane way of handling this problem is to abolish Hong Kong's first asylum policy.

Mr President, I hope Members will reconsider it, vote against the amendment and support my original motion.

Question on Mr LAW Chi-kwong's amendment put.

Voice votes taken.

Mr Martin LEE and Mrs Selina CHOW claimed a division.

PRESIDENT: Council will now proceed to a division.

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

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

Mr Martin LEE, Mr SZETO Wah, 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 Eric LI, Mr Fred LI, Mr James TO, Dr Samuel WONG, Dr YEUNG Sum, Mr WONG Wai-yin, Miss Christine LOH, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr Albert HO, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, 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, Dr LEONG Che-hung, Mr CHIM Pui-chung, Mr Henry TANG, Mr Howard YOUNG, 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 Ambrose LAU, Mr LEE Kai-ming and Mr LO Suk-ching voted against the amendment.

THE PRESIDENT announced that there were 30 votes in favour of the amendment and 19 votes against it. He therefore declared that the amendment was carried.

PRESIDENT: Mrs Selina CHOW, you are now entitled to reply and you have two minutes 30 seconds out of your original 15 minutes.

MRS SELINA CHOW (in Cantonese): Mr President, as I have already mentioned, a considerable measure of consensus indeed exists in this Council on a range of other matters. Today, our debate is mainly focused on a new issue which is proposed by me, that is, to scrap the first asylum port policy. Although I cannot receive majority support now, I am very happy that about 20 Members share my idea, which is already very different from the situation in the Council of the last term. I would like to reiterate that the Liberal Party will continue to work hard to resolve other problems. Concerning this issue, we believe that no matter whether the problem relates to the stranded Vietnamese migrants or to the financial aspects, Britain definitely has the responsibility to solve it for Hong Kong.

We have just heard the reply of the Secretary for Security. I believe many colleagues will not agree with him. It is because he said that it would be a dangerous signal to request Britain to shoulder the responsibility. In fact, he is just harping on the same old tune, repeating the same situation of last year, that is to say, rehashing what was said by the Governor, Mr Chris PATTEN. I believe the argument of the Governor is definitely not acceptable from the viewpoint of the Hong Kong people for we always believe that we can propose our demand to our sovereign state and we can also trust them to help us solve the problems. In fact, when we look back, our sovereign state only did very little in this aspect, and they now even place us in a difficult position. I believe that apart from visiting Vietnam to continue the negotiation with the Vietnamese Government, it is also very important for Hong Kong to propose our request to the British Government.

Question on Mrs Selina CHOW's motion, as amended by Mr LAW Chi-kwong, put and agreed to.

ENTRY VISA FOR TAIWAN VISITORS

MR YUM SIN-LING to move the following motion:

"That in view of the competition faced by Hong Kong consequent upon the opening of the International Airport in Macau and, more importantly, of its visa-free entry policy for Taiwan visitors, the Administration should simplify the procedure for the application for entry visa by Taiwan visitors so as to safeguard the HK$14 billion income that Hong Kong earns yearly from these visitors and to secure the 40 000 jobs directly or indirectly affected."

MR YUM SIN-LING (in Cantonese): Mr President, I move the motion standing in my name on the Order Paper.

Tourism is the second largest industry of Hong Kong. Over the past several decades, a number of trade deficits had been balanced, thanks to the revenue generated from tourism. According to statistics provided by the Hong Kong Tourist Association (HKTA), the number of visitor arrivals from Taiwan in 1994 reached 1 665 000. And, Taiwan was Hong Kong's number one market for visitors. The amount of revenue therefrom was to the tune of $13.8 billion. The figures for the months of January to August this year show that the number of visitor arrivals had increased by 7.8% over the same period last year. Visitors' spending for the months of January to June had increased by 18%. On the basis of this percentage of increase, it can be deduced that the number of visitor arrivals from Taiwan for this whole year would be around 1.8 million, bringing to Hong Kong a revenue to the tune of some $16 billion.

A professor from the Chinese University of Hong Kong (CUHK) studied the above figures in 1994 in conjunction with the information released by the Census and Statistics Department. The study result revealed that as many as 40 000 jobs last year were sustained by the revenue of $13.8 billion. It can be deduced that for this year, as many as 44 000 jobs will have to be sustained by the revenue of $16 billion. These jobs are distributed in our retail industry, import and export industry, catering industry as well as hotel and hostel industry. For the retail industry, statistics showed, as it was reported some days ago, that the money that Hong Kong women spent on cosmetics per year per head ranked the top in Asia. This report is unfair for Hong Kong women who are beautiful by nature. In fact, much of the cosmetics sold in Hong Kong are purchased by overseas visitors, in particular, by Taiwan visitors. The same is true of other products such as prestigious brand watches, clothing and leather goods or even the middle-priced or low-priced goods. From next month onwards, about 44 000 jobs would be under threat and the threat comes from Macau.

The International Airport of Macau was opened on 8 November and launched its inaugural flight to Beijing. One month later, that is, on 8 December, it will launch its first flight to Taipei. From next year onwards, Macau may siphon off from Hong Kong hundreds of thousands of Taiwan visitors who should have come to Hong Kong. Why? The reasons are threefold: (1) cheaper air tickets are provided; (2) Taiwan visitors will be able to go to mainland China on board the same plane having only to change the flight number; and (3) Taiwan visitors can have visa-free entry and may stay for as long as 21 days.

Regarding the first two special arrangements, since they involve market competition and the co-operation between airline companies, it may be quite difficult to take corresponding action and to compete accordingly. However, we are still poised to attract many Taiwan visitors with the reputation of a shoppers' paradise. The third arrangement, which aims at improving the visa application procedures for Taiwan visitors, exerts the most serious impact on Hong Kong. Our ex-colleague, Mr Martin BARROW, who is also Chairman of the HKTA, came back to this Council last week for the particular purpose of expressing his support for me. He also expressed the hope that his former colleagues can support my motion.

At present, it takes at least five to seven working days for the Immigration Department of Hong Kong to grant individual visas to Taiwan visitors and it may take more than one month for special cases. For group visas, it would take more than two weeks. But whatever the category of visa applications, the documents would have to be received by the concerned airline companies in Taipei and then be dispatched by Hong Kong companies. Taking into account the time needed for postal delivery between Hong Kong and Taiwan, the time required in general ranges from two weeks to five or six weeks. Under this circumstance, we can hardly compete with Macau. It is estimated that the number of visitor arrivals from Taiwan may drop by up to 30% next year and the revenue of Hong Kong will be cut by more than $5 billion. In addition, as many as 13 000 jobs may be lost. At this time when the prevailing unemployment rate is pretty high, the addition of over 10 000 people on top of the 110 000 unemployed may not be too many, but surely it is not an insignificant figure. We therefore urge the Hong Kong Government to consider simplifying the visa processing procedures for Taiwan visitors. The best way is for Hong Kong to waive the entry permit requirements. If that could not be done, the Government should simplify the procedures so that the applicants can get their visas within one or two days. In the face of competition, the airline companies will surely collect and dispatch the documents more quickly and frequently. Speeding up visa processing procedures is not only conducive to keeping those visitors who have frequently come to Hong Kong, but may stimulate the emergence of new markets so that more Taiwanese may like to come to visit Hong Kong.

Up until now, the Hong Kong Government still vets those visa applications from Taiwan vigorously. For some sensitive personnel, for example Taiwan's senior officials, the Hong Kong Government still refuses to grant them entry. For some marginally sensitive personnel, the Government would just procrastinate and delay the processing for about one or two months, forcing many people to cancel their journeys even though they have already booked their air tickets. Most surprisingly, even the arts performing groups and dance troupes that come to Hong Kong to give performances are subject to a lot of constraints. The "Formosa Aboriginal Dance Troupe" from Taiwan was invited to give a two-day performance at the Hong Kong Arts Festival organized by the Urban Council last month in Hong Kong. Though the performers had to rehearse in the day time, the Hong Kong Government granted them only three-day visas, rendering it impossible for them to go shopping and sightseeing. This is not amenable to reason and rarely occurs elsewhere in the world. We cannot help but ask: "What is the Hong Kong Government afraid of?"

Macau's provision of a lot of convenience to Taiwan travellers shows that times have changed. The United Kingdom certainly enjoys a higher position in the international arena than Portugal, while Hong Kong is less dependent on mainland China than is Macau. If Macau can adopt the policy of "all visitors are welcome", why should the Hong Kong Government be fettered by old conventions and restrict itself so much? If the Hong Kong Government can grant visa-free entry to more than 100 countries and areas, then how come Hong Kong has to impose harsh restrictions upon Taiwan, which has a trade volume of more than US$20 billion with Hong Kong per year? Taiwan businessmen who have substantial business links in Hong Kong have established about 1 500 formal offices and factories in Hong Kong, employing about 36 000 staff. It is estimated that there are 18 000 business establishments which have not set up formal offices in Hong Kong. Apart from the revenue from tourism, the expenditure that these companies spend in Hong Kong, which ranges from thousands to millions a month, accounts for another category of revenue that does not have any formal statistics. If Hong Kong does not relax and simplify the visa processing procedures, some Taiwan business establishments may relocate from Hong Kong to Macau to enjoy at least two more years of freedom after 1997, until Macau has to be handed over to China in 1999. If this turns out to be the case, some job opportunities will vanish from Hong Kong. The Hong Kong Government should attach due importance to the problems arising from the entry inconvenience brought to Taiwanese visitors.

The aforementioned professor from the CUHK interviewed some Taiwan businessmen in Hong Kong and the interviewees mentioned four areas which Hong Kong needed improvement. Two of the four areas concerned visa processing. In the first place, the visa processing time for travelling and working visas should be shortened; secondly, more convenience for entry and exit should be given to visitors, the procedures should be simplified and the period of stay should be extended.

Times have changed. Even the Japanese Government is going to reinstate the visa-free stay for 72 hours for Taiwan visitors next year. In fact, if Taiwan's senior officials are to visit the Mainland, I believe they will not be turned away by China on the ground that China wants to express its sincerity towards the unification of China. If some people are permitted to go to the Mainland, then why should Hong Kong or Macau regard approving their entry a problem? Maybe even the Macau Government has understood this point, leaving behind only the Hong Kong Government which is still blind to it. This is really baffling.

Even if the Hong Kong Government has some hidden difficulties which are not to be disclosed, the vetting procedures can still be expedited. Only a very simple computer program is needed to check the list of sensitive personnel. In view of the possible loss of revenue to the tune of billions of dollars and an increase in the number of unemployed by 10 000 or 20 000, this low and affordable cost is well worth it. I therefore urge the Government to consider relaxing the control over visa application for Taiwan visitors and to significantly reduce the processing time thereof.

I so move. Thank you, Mr President.

Question on the motion proposed.

MR HOWARD YOUNG (in Cantonese): Today's motion is a very important one to the tourism industry. As we all know, tourism is now Hong Kong's second biggest earner of foreign exchanges and produces more than 6% of Hong Kong's GDP. About 200 000 people are directly or indirectly engaged in tourism and tourism-related industries. The significance of tourism to Hong Kong's exports of service is tremendous.

Each year, visitors from Taiwan make up more or less one-fifth of the total visitor arrivals to Hong Kong. Last year, 9.3 million visitors came to Hong Kong and among them, 1.7 million came from Taiwan. That number alone is greater than the total visitor arrivals to some of our neighbouring countries.

In 1987, visitors from Taiwan took advantage of the relaxation of outbound travel restrictions concerning Hong Kong as a first port-of-call and increased by over 60% to reach over 340 000. Visitor arrivals in 1988 strikingly tripled to reach over 1 million. Since then, Taiwan has always been a very important market to Hong Kong.

Apart from the large number of these visitors from Taiwan, the amount of money which they spend is also great. In both 1993 and 1994, visitors from Taiwan spent close to Hong Kong $14 billion, contributing 24% and 22% of the total receipts from all visitors to Hong Kong respectively. Though Taiwan is no longer Hong Kong's biggest market in terms of visitor arrivals, it remains one of the two most productive sources of business. In 1994, Taiwan is Hong Kong's largest market in terms of visitor expenditure. But for some unexpected and unwanted incidents and the declining weather, I am sure the number would have been even greater.

In the past three years, Taiwan visitors stand high as the second largest per capita spending group among all capital markets, immediately after visitors from Japan. On average, every Taiwan tourist spend $8,311, second to the Japanese who spend $8,444 each in Hong Kong. The per capita per diem spending of Taiwan visitors have always been well over average. Taiwanese visitors have been contributing remarkably to our economy. It is no doubt that the greater the number of visitors coming from Taiwan, the greater the benefit to us.

Despite their enormous contribution to the Hong Kong economy, visitors from Taiwan have never been treated in a fair way by the Hong Kong Government. Taiwanese visitors have always needed to apply for visas to come to HK. It remains the same even when the Government adjusted their immigration policy to let Chinese passport holders in transit to third countries to stay in Hong Kong for up to seven days visa-free. Some of our visitors from Taiwan only come in transit to go to their final destination, mainland China. Many of them come to shop in Hong Kong and bring these souvenirs and gifts to their families, friends and relatives in the Mainland. They go to China via Hong Kong because this is the closest, and relatively convenient, way.

At the moment, visitors from Taiwan with a single-entry visa to Hong Kong are normally allowed to stay for seven days to three months, and if they have a multiple-entry visa to Hong Kong, they are allowed to stay up to 21 days in Macau without having to apply for another visa to Macau.

The situation is changing, though Macau's new international airport will be in operation next month; so will direct shuttle flights between Taiwan, Macau and Beijing. What is more, passengers from Taiwan will then be able to stay on board and reach China with ease on the vary same flight without even changing planes or having an entry visa. This is direct flight between Taiwan and Beijing in disguise. The tourism industry and everybody else are waiting to see if Macau will further relax her arrangement with a view to dominating the market of Taiwan tourists.

Of course, I am confident that HK's leading position in international aviation will not be replaced overnight. It is, however, to my concern that Macau will eventually siphon off up to one-third of the visitors from Taiwan who, before there was any direct flight between Taiwan and Macau, would otherwise have no choice but to put up with the immigration formalities of Hong Kong. Some of the visitors from Taiwan have been feeling they are being discriminated against by the Hong Kong Government though they could not do much then. Very soon, however, there will be someone right next to us showing to these wealthy Taiwanese a friendly smile and waving a big sign of welcome to them. Things will start to change.

Though the new Macau International Airport and the direct flight between Macau and Taiwan may not be a threat to us, it certainly is an alarm to remind us that there is competition around us and this is something attractive to our visitors. We may have more to offer to our visitors than our neighbours, but a troublesome and lengthy visa application would certainly turn away some of our visitors from Taiwan, or those who just stop-over. The Government should offer visitors from Taiwan relaxed visa application procedures or eventually visa-free entry.

Visitors from Taiwan have always behaved themselves whilst in Hong Kong. They come here to enjoy their days off, to relax, to shop, to experience some metropolitan life, or to visit friends and relatives either in Hong Kong or in China or in both locations. Some of these visitors come to do business too, contributing to economic activities between Hong Kong and Taiwan. They do not try to work illegally in Hong Kong with their tourist visas, nor do they try to do everything possible to stay in Hong Kong illegally. So, I think the Government should relax visa application procedures for Taiwan tourists.

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

MR LAU CHIN-SHEK (in Cantonese): Mr President, with the well-developed transport links and the more frequent international exchanges, immigration control among different countries and regions should be more and more relaxed, so that the economic, social and cultural exchanges among people of different regions can be boosted accordingly.

Hong Kong is well known to be a port of free trade. However, it is extremely backward in its immigration policy, especially in regard to the restrictions on Taiwan people coming to Hong Kong. For many years, Hong Kong is not willing to relax its control on Taiwan visitors and officials coming to the territory. I believe that the main reason is political consideration. But in fact, the Hong Kong Government is often over-worried about the consequences. At present, a Taiwan resident can obtain a permit to the Mainland within one day, which is very convenient. And recently, even Macau has also granted visa-free entry to Taiwan visitors for up to 21 days. Are the present restrictions in Hong Kong unreasonable?

Someone mentioned that since visitors from the Mainland have to go through certain procedures to come to Hong Kong, Taiwan visitors should be no exception. However, I would like to point out here that as a matter of fact, Hong Kong does not have much "say" over Mainland visitors coming to Hong Kong, whether they are holding one-way or two-way permits. Who can come and who cannot is all decided by the Mainland authorities, while the Hong Kong Government just acts accordingly in most of the cases. I therefore feel that since the immigration procedures of the Hong Kong Government towards Mainland residents are so lax, we should not discriminate against Taiwan residents, who are also Chinese people, visiting Hong Kong.

Mr President, I agree that the Hong Kong Government should simplify the procedures for visa application by Taiwan visitors. However, I would like to point out here that Hong Kong people also have to go through very complicated application procedures for a Taiwan Entry Permit. These entail almost a detailed examination of one's family background. I believe that this is actually one of the adverse results caused by political confrontation between China and Taiwan over the past. Therefore, while requesting the Hong Kong Government to relax the procedures for visa application by Taiwan visitors, I also urge the Taiwan authorities to relax the immigration control towards Hong Kong people visiting Taiwan. In fact, for any place where immigration control is unnecessarily strict on the visitors, self-inflicted loss will be incurred in the end.

Mr President, with these remarks, I support the motion of the Honourable YUM Sin-ling. Thank you.

DR LAW CHEUNG-KWOK (in Cantonese): Mr President, the economic relations between Hong Kong and Taiwan have been fast developing in recent years. Today, Taiwan has ranked the third position in terms of goods imported by Hong Kong, with the gross import in 1994 amounting to over $100 billion. The total value of goods exported and transhipped to Taiwan from Hong Kong amounted to $12.5 billion as at the end of 1994, and the average growth over the last five years was almost 15%.

Apart from trading relations, many of the Taiwan people going to mainland China to make direct investments have used Hong Kong as their base and springboard. This is very important to Hong Kong in her continuous development as a service centre, financial centre, middleman centre, communications centre and so on; what is more, it plays an active role in boosting the "Greater China Economic Circle" Unfortunately, both the Hong Kong and Taiwan Governments have made no improvement in their entry visa arrangements over the years.

Today, the Honourable YUM Sin-ling moves the motion. In his speech, he has clearly pointed out the unfair arrangements and troubles Taiwan visitors have to face when they apply for their Hong Kong entry permits. And as Macau has done its best to facilitate Taiwan visitors, it may result in diverting to Macau some business opportunities that should have been Hong Kong'. He has also urged the Government to improve the entry arrangement for Taiwan visitors as soon as possible. The Association for Democracy and Peoples Livelihood (ADPL) and I go along with the view that the problem is serious and urgent, therefore we are in full support of the motion.

However, in a corresponding way, Hong Kong visitors are also facing similar inconvenience when applying for their Taiwan Entry Permits. Just now the Honourable LAU Chin-shek has also mentioned that. Specifically, the inconvenience can be expressed in the following points:

-for those who re-apply for a Taiwan Entry Permit, it takes two weeks for a machine-printed one, and as long as a month's time for a hand-printed one; and

-the Taiwan authorities have made no provision in express terms for circumstances in which a multi-entry permit may be granted, and one normally has to apply for re-endorsement every time he wishes to go to Taiwan.

Therefore, the ADPL and I propose that the Government should negotiate with the Taiwan authorities on two points: (1) the time required for first-time application for a Taiwan Entry Permit ought to be reduced to two weeks or less, and re-application for a Taiwan Entry Permit should be reduced to one week or less; and (2) for people who are holders of certain travel documents ( such as BDTC Passports or BN(O) Passports), they should be granted a 72-hour visa-free stay arrangement.

In a nutshell, as the economic relations between Hong Kong and Taiwan are becoming closer, the Hong Kong and Taiwan Governments should relax the bilateral entry visa restrictions on the basis of equality, friendship and mutual benefits so as to promote the economic and cultural exchanges and development of the two places.

With these remarks, I support the motion of Mr YUM Sin-ling. Thank you, Mr President.

MRS MIRIAM LAU (in Cantonese): Mr President, at present, the Hong Kong Government requires Taiwan visitors to apply for entry visas before they are allowed entry. Taiwan visitors have expressed their discontent to this practice for quite some time.

At the end of October, a dancing troupe known as the "Formosa Aboriginal Dancing Troupe" was invited by the Urban Council to give performances at the Hong Kong Arts Festival. This group of some 20 dancers and staff had never been to Hong Kong before and they originally planned to take the opportunity to stay behind for a few days after the performances to shop around in Hong Kong ─ the shoppers' paradise. However, things went against their wishes for the Immigration Department granted them only visas valid for three days.

This dancing troupe was in Hong Kong upon the invitation of the Urban Council for the sake of promoting cultural exchanges between the two places. They were actually our guests and should be treated courteously, yet because of the visa restriction, they could only stay for a very short while. They probably felt that the treatment was insulting to them. I of course hope that they would not have such a feeling. Regarding the existing arrangement, I am certainly not the only one who feel disappointed. This is discouraging to the Hong Kong Tourist Association (HKTA) as well. The HKTA puts in enormous manpower and material resources each year to market Hong Kong as a tourist spot, in the hope that each and every visitor can spend a few more days here in Hong Kong, so that all visitors will find Hong Kong a home from home. However, after visiting Hong Kong, Taiwan visitors may take home with them a lot of grievances.

The rapid economic growth in Asia in recent years has encouraged more frequent intra-regional travels, for both business and leisure purposes. Bilateral co-operation will surely bring mutual benefits. The Government should do more in this respect because Taiwan is not only a major source of visitors, but is also the third most popular outbound destination for Hong Kong people, following China and Macau. However superior the conditions of an area, a simple and convenient visa application process would always be the first step to attract foreign visitors. In addition, for those visitors who are in transit to a third destination through Hong Kong, even if they hold the travel documents and the air tickets for the third destination, they still need to apply for another visa for entry to Hong Kong. This is indeed unnecessary. I believe that the Hong Kong Government should have the foresight and the courage to revise the existing practice.

If the Government worries that some Taiwan politicians might come to Hong Kong to do something which might embarrass China, then we may relax our visa application procedures only for those Taiwan visitors who are already holding entry visas to visit the Mainland. After all, if the Mainland welcomes them to visit China, why should we put obstacles on their way to Hong Kong which is in fact part of China?

Chinese people are courteous and hospitable. As the old saying goes, "What a pleasure it is to have a friend coming from afar!" We hope that we would have more visitors coming to visit us. Even if the visitors are only in transit in Hong Kong, we still hope that they could stop by and enjoy their time here. However, we are now installing gates and fences outside our own door. Is it discourtesy on our own part or is it a disrespect to the other people?

Mr President, I so submit in support of the motion.

MR CHAN KAM-LAM (in Cantonese): Mr President, I would like to speak on today's motion from the perspectives of the local economy and tourism. The Democratic Alliance for the Betterment of Hong Kong (DAB) attaches great importance to local tourism. As a matter of fact, tourism is the second major foreign exchange earner in Hong Kong. I believe that this industry will become the top foreign exchange earner in Hong Kong very soon.

The impact of the commissioning of the International Airport in Macau on Hong Kong

However, in regard to the question that the commissioning of the International Airport in Macau will bring pressure to bear on Hong Kong in terms of the heightened competition faced by it, the DAB reckons that this kind of competition is healthy rather than vicious. We believe that the International Airport in Macau will only function as a subsidiary to the Hong Kong airport and will ease part of the pressure and burden that the Hong Kong airport is now shouldering.

The designed capacity of the existing Hong Kong airport is 24 million passenger trips per year. According to the latest data, the passenger throughput of the airport at present has already reached 27 million passenger trips. In other words, its capacity has been exceeded by 3 million passenger trips.

According to the information, among these 20 million-plus passenger trips, about 600 000-odd passenger trips per year are transit trips. If the Macau airport can share part of the transit passengers for Hong Kong, it in fact will be beneficial to Hong Kong.

Some people worry that the passengers can fly direct from Taiwan to Macau and then transit to the Mainland, thus posing a threat to Hong Kong. But at present, Macau is only operating two routes to China, one to Beijing and the other to Shanghai, whereas the flights from Hong Kong can reach more than 40 destinations in China. The passengers can have numerous choices in Hong Kong.

As a matter of fact, the scale of the Macau airport is much smaller than that of the future new Hong Kong airport and the existing Hong Kong International Airport. The total area of the Macau airport is only 190 hectares, whereas the new airport will have 1 248 hectares. Besides, the designed capacity of the new airport in Hong Kong is 87 million passenger trips per year, whereas the capacity of the Macau airport is only 6.48 million passenger trips. I am convinced that at present and in the foreseeable future, Hong Kong will still be very attractive to Taiwan visitors.

Strengthening the competitiveness of local tourism

Mr President, according to our economic performance for the first half of 1995, local tourism has obviously recovered from the doldrums it was in 1994. In the first half of 1995, the total number of tourists is 4.69 million passenger trips, which represents an increase of 7% over the corresponding period of the preceding year and is better than the overall 4% growth for the year 1994. I believe that relaxation of immigration control is not the only choice in order to maintain the upward trend of local tourism.

In my view, the existing immigration arrangement for Taiwan visitors is already far from being strict. The motion of the Honourable YUM Sin-ling today asks for relaxation of immigration procedure for Taiwan visitors, which I think does not have further room for relaxation. In regard to the demand of visa-free entry, I can hardly agree.

Mr President, in order to protect the "rice bowls" of the more than 200 000

people in the tourism industry, I think that the best solution lies in the strengthening of the competitiveness of the local tourism industry and in the provision of appropriate assistance by the Government, for example in the management of tourist facilities, local environmental protection work, planning of tourism resources and so on.

The new airport of Hong Kong is expected to be in commission in 1998, which will be further beneficial to local tourism and the related industries. I suggest that the Administration should further promote the development of local tourism. It should, from the perspective of benefiting the local economy, consider setting up a "Hong Kong Tourist Council", an organization for the co-ordination and promotion of the overall development of tourism. Or the Administration should rearrange the respective roles now played by the Kong Kong Tourist Association, the Travel Industry Council of Hong Kong and the Joint Council of the Travel Industry of Hong Kong, so as to strengthen the adaptability and vitality of our tourism industry.

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

MR JAMES TO (in Cantonese): Mr President, for a long time Hong Kong may be said to have monopolized the handling of Taiwan visitors going to mainland China. These visitors mostly travel through Hong Kong before going north to China. They will probably stay in Hong Kong for a couple of days for sightseeing or on business, and thus bring a lot of good to the local tourism industry and service industry.

But, starting from 8 December, the Macau Airport will be serving flights to and from Taiwan. Macau is also giving Taiwan visitors 21 days of visa-free entry. She will also be allowing these visitors to fly to mainland China on the same plane after a change of flight number. Thus, Macau may snatch several hundred thousand Taiwan visitors from Hong Kong. This is due to the fact that, unlike the Hong Kong Government, the Macau Government treats holders of People's Republic of China passports and those of Republic of China passports both the same as Chinese and allows them to enter the land visa-free. The Macau Government simply issues these visitors entry documents as they enter. Hong Kong, on the other hand, has classified Taiwan visitors as people from abroad and required them to complete all entry formalities. What Taiwan visitors hold when they enter Hong Kong are not entry visas, as Britain does not treat Taiwan as officially a country. So, Taiwan visitors are not issued any visas.

What the Taiwan visitors hold for entry to Hong Kong are entry permits. It used to take them seven days to process the entry documents. The time has now been shortened to five days. We think the Immigration Department should further shorten the processing time as Taiwan is very important to the economy and tourism industry of Hong Kong. In the medium- to long-term, we must come up with some ways to effectively and promptly attract Taiwan visitors. Even if we can shorten the time for Taiwan visitors to obtain entry documents from 20 days to just over 10 days, our competitiveness still may not be markedly improved. Can we come up with some quicker ways for the issue of travel documents? For example, can Hong Kong set up a non-governmental organization in Taiwan to enable Taiwan visitors to process their entry documents more quickly and easily, to get rid of all the red tape they have to go through now? (Currently, such documents are processed by some private organizations in Taiwan.) Alternatively, we can follow the example of Macau and which permit Taiwan visitors to stay for a short period visa-free. I trust these proposals may involve some constitutional considerations, which at this time are rather sensitive. But I think these proposals are worthy of our careful consideration, for the sake of better economic development in Hong Kong and further exchanges between Taiwan and Hong Kong, which in turn will bring about further exchanges between mainland China and Taiwan.

After 1997, I think this will become an internal issue of China. I wonder why the Honourable CHAN Kam-lam said he would oppose the motion. Perhaps it was because the word "visa-free" was not there or the proposal for visa-free entry was not in the motion. Anyway, all these were mentioned in the Honourable YUM Sin-ling's speech and were, according to the Honourable Howard YOUNG, some of the ideas he had in mind. Since we are going to be a single country, I believe the requirements should be relaxed as far as possible on the issue of entry, with or without a visa. This call for relaxed requirements appears to be in keeping with the latest development in the relationship between mainland China and Taiwan. Mr YUM cited the incident in which the dancers of the "Formosa Aboriginal Singing and Dancing Troupe" were allowed only several days to stay. This was very insulting. If, for some particularly sensitive reasons, the dancers were suspected to be spies who would be involved in some improper activities, they should not have been allowed to enter at all. If they were permitted to stay for just enough days for their performance, with no extra time allowance, I think not only these dancers but also other Taiwan people would feel that Hong Kong was unduly harsh on them. This was very undesirable.

With these remarks, the Democratic Party supports the motion.

MR CHEUNG HON-CHUNG (in Cantonese): Mr President, originally I did not intend to speak, but after I have heard what the Honourable CHAN Kam-lam say, I think a clarification is needed.

I think there should not be any trouble making it easier for Taiwan visitors to obtain a visa to Hong Kong. As regards the requirement for visitors to obtain a visa in advance, the Honourable Howard YOUNG has suggested two options. The Democratic Alliance for the Betterment of Hong Kong (DAB) thinks that further simplification is beneficial to Hong Kong as an international business metropolis, enhancing the competitiveness of the tourist industry and promoting the economic development of Hong Kong. The DAB thinks that simplification will do no harm, but I believe what Mr CHAN Kam-lam means is that he opposes granting visa-free entry. I repeat that the DAB supports the motion of the Honourable YUM Sin-ling to simplify the immigration procedures for Taiwan visitors to enter Hong Kong, but opposes giving them visa-free entry. Thank you, Mr President.

DR HUANG CHEN-YA (in Cantonese): Mr President, the Democratic Party supports the Honourable YUM Sin-ling's motion.

In recent years, there have been significant changes in Hong Kong's tourist industry. In terms of total spending, Taiwan visitors now rank the top; and in terms of the number of visitors, they are second only to China. Statistics show that from January to June this year, Taiwan visitors had spent a total of $7.8 billion in Hong Kong, amounting to 23% of the total spending by tourists. In the period between January and August this year, the number of Taiwan visitors to Hong Kong hit the 180 000 mark. According to another survey, the total spending of $14 billion brought in by Taiwan visitors last year had directly or indirectly maintained 40 000 local jobs. Therefore, in the interests of Hong Kong's overall economy, there is every need to continue to attract Taiwan visitors to visit Hong Kong.

The International Airport in Macau was commissioned on 8 November. With the improvement measures adopted by Macau to facilitate the entry and exit of Taiwan visitors, it might snatch away some of the Taiwan visitors who meant to visit Hong Kong. Therefore, the Democratic Party supports the motion moved by Mr YUM Sin-ling in urging the Hong Kong Government to simplify the visa application procedures for Taiwan visitors. However, we might as well look at the Macau Airport from another angle. From a more optimistic point of view, given that the capacity of Kai Tak Airport has already reached saturation, the Macau Airport will be to Hong Kong's advantage if we can make good use of the convenience it offers. Therefore, there is no reason why we should treat the Macau Airport as our scourge. We know very well that Hong Kong's attraction is not just the convenience in transit. But more importantly, Hong Kong is an international commercial city and a financial centre, and also a shoppers' paradise. To visitors from many countries, especially from Taiwan, these are really attractive features. If the intended destination of these visitors and businessmen is Hong Kong, they definitely will not give up visiting Hong Kong or making their business transactions have just because they cannot fly into Kai Tak Airport direct. Therefore, the pressing task for the Government indeed is to strengthen the connecting transport between Hong Kong and Macau. At the same time, it should evaluate the economic value of in-coming flights. We should try our best to protect the growth of flights between Hong Kong and some cities which bring in substantial tourism and trade revenues and which have good potentials for development. As for the other flights, perhaps of short haul and inland nature, we can make use of other airports such as the airports in Macau, Huangtien and so on as our supplementary airports. In this connection, we had in fact put forth this view last year when we held a discussion on increasing the number of flights at Kai Tak Airport. Therefore, it is even more appropriate now for us to demand the Government to review the utilization policy of Hong Kong's airport as a whole. For this reason, we think that the Macau Airport may not necessarily constitute a serious threat to Hong Kong.

However, as Mr YUM Sin-ling has pointed out that it is very time-consuming and troublesome for Taiwan visitors to apply for visas to Hong Kong, usually taking several weeks before the application procedures can be completed. It clearly runs counter to the policy of encouraging visitors to come to Hong Kong. I have often heard my Taiwanese friends complain that they think Hong Kong is purposedly making things difficult for them, thus making them feel very troublesome to come to Hong Kong. Such an attitude of shutting out people is in fact not healthy and will also jeopardize the policy of making Hong Kong a major centre of tourism. As a matter of fact, complicated and time-consuming immigration procedures may not necessarily work in preventing truly politically sensitive people from entering the territory. I trust that the Government will not be able to adduce any evidence to prove that such a time-consuming and troublesome procedure facilitates its identification of many people who cannot be identified otherwise by some other easier and faster means. I hope that the Government will explain clearly to us why such a cumbersome procedure should be adopted, and why we should not treat them the way we treat visitors from mainland China who can have short-term visa-free visits or very simple visa application procedures, so that people from both sides of the Taiwan Strait can be treated on equal terms. Indeed, Hong Kong can play an important role in the exchanges between people on both sides of the Taiwan Strait and between them and overseas Chinese, now or after 1997. Moreover, it can also play a positive role in the peaceful reunification of China. In recent years, people no longer stage any violent acts in Hong Kong, whether they are from mainland China or from Taiwan. Therefore, Hong Kong's immigration policy towards Taiwan visitors is obviously outdated. The so-called view of the Democratic Alliance for the Betterment of Hong Kong, as presented by the Honourable CHAN Kam-lam just now, is clearly shortsighted. No doubt it lacks both the sentiment and commitment towards the reunification of China. While it is true that the procedures for Hong Kong people entering Taiwan are also very troublesome, there is no reason why we should follow the practice of Taiwan, where the tourism has not much to offer. Moreover, a simplification of the immigration procedures really can help to facilitate entry of visitors. The result may be an increased number of Taiwan visitors to Hong Kong. So, whether it is from the political angle or for economic reasons, a simplification of the entry visa application procedures is worth supporting.

With these remarks, I support Mr YUM Sin-ling's motion.

MR IP KWOK-HIM (in Cantonese): Mr President, in moving his motion today, the Honourable YUM Sin-ling thinks that the Government should simplify the procedure for the application for entry visa by Taiwan visitors in order to maintain Hong Kong's competitive edge in attracting visitors. But as a matter of fact, the requirements for Taiwan visitors to apply for entry visas can be said to be rather loose; there is the choice of one-off single journey visas as well as multi-entry visas which are valid for one or two years without any need for renewal, and the time required for the issue of either kind of visas is very short. However, just now some Members mentioned certain individual cases in which the time taken in issuing the visas was somewhat longer. However, in this connection, the Hong Kong Tourist Association has not received any strong views levelling criticisms at the existing application arrangement. The Democratic Alliance for the Betterment of Hong Kong does not oppose the further simplification of the application procedure to make it convenient for more visitors to visit Hong Kong, thus bringing in more foreign exchange earnings. At the same time, we also urge the Taiwan authority that it should also simplify the procedure for Hong Kong people to enter Taiwan.

Just now a Member said that the Honourable CHAN Kam-lam was short-sighted in his view on the entry and exit visa application of Taiwan, but I cannot see anything amounting to short-sightedness from what Mr CHAN Kam-lam has said. On the contrary, having analyzed the commissioning of air service between Macau and China from the economic point of view, what we can see is that further economic interchange between them will occur.

With these remarks, I support the motion moved by Mr YUM Sin-ling.

SECRETARY FOR SECURITY (in Cantonese): Mr President, Members have talked about the importance of Taiwan tourists to the tourism industry of Hong Kong and the possible pressure on Hong Kong brought about by the opening of the Macau international airport. Undoubtedly, tourism is a very important economic activity for Hong Kong. The revenue it has generated greatly benefits the Hong Kong economy. Let me reiterate that the immigration policy adopted by the Administration aims to do everything possible to facilitate tourists entering and leaving Hong Kong, without losing sight of the need for a wholesome immigration control system.

Last year, we handled more than 9.3 million visitors, of which about one-fifth, that is, 1.65 million came from Taiwan. According to information supplied by the Hong Kong Tourist Association, the total spending of Taiwan visitors in Hong Kong last year reached $13.8 billion, which is 22% of the total amount spent by all visitors in 1994. In other words, for every dollar of tourist spending, 22 cents came from Taiwan visitors. So, it is extremely important for Hong Kong to maintain its attractiveness to tourists from Taiwan and other regions as well as business travellers. It is also important to make them feel that Hong Kong is a city which is convenient for them to enter and exit. We need to eliminate all unnecessary obstacles to visitors coming to Hong Kong. On the other hand, we need adequate measures to maintain law and order in Hong Kong. Therefore, to facilitate visitors from Taiwan and other countries and regions, we are gradually simplifying our procedures. Before I talk about the relevant improvements, let me first explain to Members some immigration requirements applicable to the general tourists and Taiwan visitors.

The visa system of Hong Kong is already very accommodating. Residents of more than 170 countries and regions can come to Hong Kong as visitors visa-free. Without having to apply for a visa, they can come to visit the territory for a short period, generally from 14 days to three months. This accommodating visa system has greatly helped to attract people from all over the world to come to Hong Kong either for sight-seeing or for business. Simple immigration procedures have enhanced contacts between the people of Hong Kong and those in the rest of the world. I am sure this is also very beneficial to the economic development of Hong Kong in recent years.

At present, only residents of about 30 countries or regions need to apply for a visit visa or entry permits to come to Hong Kong. These include 11 governments that do not have formal diplomatic relations with Britain, of which Taiwan is one. Residents of these countries and regions need to apply for a visa or permit before coming to Hong Kong. Taiwan visitors need to apply for an Entry Permit to Visit Hong Kong from Taiwan, issued by the Immigration Department of Hong Kong.

Since January this year, we have simplified the application procedures for Entry Permits to Visit Hong Kong from Taiwan and we have computerized the scrutiny and issue of these permits. Therefore, the time for the scrutiny of these applications has been shortened from seven to five working days. We have also simplified the categories of this kind of permit. In the past, there were seven categories of such permits issued. Now we have only three, namely the single-journey entry permits, multiple-journey entry permits valid for one year, and multiple-journey entry permits valid for two years. Multiple-journey entry permits have become extremely popular because they greatly facilitate Taiwan visitors who need to come to Hong Kong frequently. In fact, over 90% of the Taiwan visitors have applied for multiple-journey entry permits.

In addition to simplifying those procedures before entry, we have also improved the clearing procedures as visitors enter Hong Kong. Since the end of September this year, all checkpoints in Hong Kong have been equipped with computer-aided optical character readers. Immigration officers will use these machines to check computer-readable travel documents, including entry permits for Taiwan visitors now being issued. Because of the said improvements, visitors from Taiwan holding entry permits issued since January this year can have their clearing time at our checkpoints shortened by 20 seconds per person. In view of the fact that Taiwan visitors account for almost one-fifth of the total number of visitors to Hong Kong, the total amount of time we have saved is considerable.

The above improvements have made Taiwan visitors feel that it is now easier and faster to enter and exit Hong Kong. Our visa requirements have not caused any decline in the number of visitors coming to Hong Kong. As a matter of fact, since 1991, the number of visitors from Taiwan has reported an increase of more than 6% on average annually, and in the first eight months this year, the number is 8% higher compared with the same period last year.

Of course, we have also noticed that with the opening of the Macau new airport, and as the capacity of Kai Tak Airport is saturated, flights may be diverted to Macau. However, when the new Chek Lap Kok Airport comes into operation in about two years' time, the problem will be greatly alleviated. Transit visitors from Taiwan whose destination is China would not fly to another region simply because of the question of permits because they do not need a permit to pass through Hong Kong at Kai Tak within the restricted area. So things should be as convenient as passing through Macau. In fact there are more flights from Hong Kong to China than those from Macau to China. So, we offer these transit visitors more choices. Other than going to China, Taiwan visitors who have been to Hong Kong before will not, I believe, miss the chance of visiting Hong Kong even though they first stop in Macau. As Members know, Hong Kong is only one hour away by boat. The distance between the two places is shorter than that between Norita Airport and downtown Tokyo. We will look at ways to make this short journey even more convenient and we will be monitoring closely future trends of Hong Kong-bound Taiwan visitors.

As far as we understand it, the policy that the Macau Government grants visa-free entry to Taiwan visitors staying there for not more than 20 days has been in place for many years. The policy has not affected the number of Taiwan visitors to Hong Kong. Of course, the state of affairs in Macau is not entirely the same as that in Hong Kong, and I do not expect a similar policy to be adopted here in the foreseeable future. What I can assure Members, however, is that we will be simplifying immigration procedures further to accommodate Taiwan travellers coming to visit Hong Kong or to do business here. Hence, we will be contributing to the development of tourism and trade in Hong Kong. Thank you, Mr President.

PRESIDENT: Mr YUM Sin-ling, you are now entitled to reply and you have six minutes two seconds out of your original 15 minutes.

MR YUM SIN-LING (in Cantonese): Thank you, Mr President. I am very glad to hear the reply from the Secretary for Security. He has mentioned that visitors from more than 170 countries are granted visa-free entry, some even for as long as three months; while 30 countries are unable to obtain this favourable treatment of visa-free entry enjoyed by most of the countries simply because they have no diplomatic relations with the United Kingdom. I would like to point out that at the present moment, the whole world has already come out from the cold war into an epoch where economics takes command and everyone is competing peacefully.

A Member mentioned a moment ago that people from whether Taiwan or mainland China would not engage in any violent act. I have also noted that Japan is prepared to grant 72-hour visa-free entry to Taiwan visitors next year. There is no diplomatic relations between Japan and Taiwan either, it thus seems to be an obsolete policy that visa-free entry cannot be granted to countries without diplomatic relations. I hope that the Secretary for Security will reconsider this point.

Besides, the Secretary has also said that the number of Taiwan visitors is ever-increasing. However, this is only what we see when we look back. When we look forward, we can see competition in front for us. The number of Taiwan visitors will definitely decrease while the unemployment rate in Hong Kong will thus increase. If there are also bookies in Hong Kong as in the United Kingdom, so that people can bet on whether the number of Taiwan visitors will decrease or not, I believe that most people will put their bets on a decrease. If this is the case, the income from tourism will also be affected. However, I still very much welcome the undertaking the Secretary made at the end of his speech that the procedures concerned will be further simplified. Let us just wait and see.

Thank you, Mr President.

Question on the motion put and agreed to.

ADJOURNMENT AND NEXT SITTING

PRESIDENT: In accordance with Standing Orders I now adjourn the Council until 2.30 pm on Wednesday 6 December 1995.

Note:

The short titles of the Bills/Motions listed in the Hansard, with the exception of the Betting Duty (Amendment) Bill 1995, Estate Agents Bill, Inland Revenue (Amendment) (No.3) Bill 1995, Merchant Shipping (Registration) (Amendment) Bill 1995, Lands Tribunal (Amendment) Bill 1995, have been translated into Chinese for information and guidance only; they do not have authoritative effect in Chinese.