PLC Paper No. CB(2) 1128

Ref : CB2/SS/7/97

Paper for the House Committee Meeting
on 6 March 1998

Second report for the Subcommittee on subsidiary legislation relating to fee increases

Purpose

1.The paper reports on the deliberations of the Subcommittee on subsidiary legislation relating to fee increases.

The Subsidiary Legislation

2.The subsidiary legislation studied by the Subcommittee is the Lifts and Escalators (Safety) (Fees) (Amendment) Regulation 1998 which was gazetted on 6 February 1998 and tabled at the Provisional Legislative Council (PLC) meeting on 11 February 1998.

The Subcommittee

3.The House Committee at its meeting on 13 February 1998 agreed that the Subcommittee formed to study the subsidiary legislation gazetted on 16 January 1998 relating to fee increases should also study the Lifts and Escalators (Safety) (Fees) (Amendment) Regulation 1998 and any other subsidiary legislation relating to fee increases which would be introduced within the term of the PLC. The House Committee also agreed that the Subcommittee be named as the Subcommittee on subsidiary legislation relating to fee increases.

4.Under the chairmanship of Hon Ronald ARCULLI, the Subcommittee has held one meeting with the Administration on 25 February 1998. A membership list of the Subcommittee is at Appendix.

Deliberations of the Subcommittee

5.The Administration has explained that under the Lifts and Escalators (Safety) Ordinance, fees are payable for inclusion of persons in the registers of lift engineers, escalator engineers, lift contractors and escalator contractors, and on delivery of certificates of examination and testing of lifts and escalators. The fees are set out in the Lifts and Escalators (Safety) (Fees) Regulations made pursuant to the Lifts and Escalators (Safety) Ordinance.

6.The Administration has further explained that it is Government policy that fees should in general be set at levels sufficient to recover the full cost of providing the services. Costing reviews are normally conducted every four years. Between two costing exercises, fees are revised on the basis of the movement of the Government Consumption Expenditure Deflator (GCED). The last costing review for the fees specified in the Lifts and Escalators (Safety) (Fees) Regulations was conducted in 1995-96. The fees were last revised in March 1997. In order to reflect the cost of services at 1997-98 prices, the Administration has proposed to increase the fees by about 7% in accordance with the movement of the GCED from 1996-97 to 1997-98. The proposed fee increases will be effective on 20 March 1998.

7.In examining the fee increase proposals set out in the Amendment Regulation, members of the Subcommittee take the same view as that taken in the scrutiny of the 18 items of subsidiary legislation on fee increases gazetted on 16 January 1998. Members do not consider that the Government should take the lead in increasing fees and charges at a time of a downturn in the economy. The Government should instead lead the way in freezing fee increases to lighten the burden on the public. Members are also of the view that the freezing of the fees at their current levels for 1998-99 will not have a significant impact on Government revenue.

8.Members have concluded that the fee increases proposed in the Amendment Regulation should not be supported.

Recommendation

9.The Subcommittee recommends that the Chairman of the Subcommittee move a resolution to repeal the Lifts and Escalators (Safety) (Fees) (Amendment) Regulation 1998.

Advice sought

10.Members are invited to support the recommendation of the Subcommittee set out in paragraph 9 above.

Provisional Legislative Council Secretariat
4 March 1998

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Appendix

Subcommittee on subsidiary legislation relating to fee increases