Council Meeting (Hansard) 4 Nov 98

OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 4 November 1998
The Council met at half-past Two o'clock

MEMBERS PRESENT:

THE PRESIDENT
THE HONOURABLE MRS RITA FAN, G.B.S., J.P.

THE HONOURABLE KENNETH TING WOO-SHOU, J.P.

THE HONOURABLE JAMES TIEN PEI-CHUN, J.P.

THE HONOURABLE DAVID CHU YU-LIN

THE HONOURABLE HO SAI-CHU, J.P.

THE HONOURABLE CYD HO SAU-LAN

THE HONOURABLE EDWARD HO SING-TIN, J.P.

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE MICHAEL HO MUN-KA

DR THE HONOURABLE RAYMOND HO CHUNG-TAI, J.P.

THE HONOURABLE LEE WING-TAT

THE HONOURABLE LEE CHEUK-YAN

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

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

THE HONOURABLE LEE KAI-MING, J.P.

DR THE HONOURABLE DAVID LI KWOK-PO, J.P.

THE HONOURABLE FRED LI WAH-MING

DR THE HONOURABLE LUI MING-WAH, J.P.

THE HONOURABLE NG LEUNG-SING

PROF THE HONOURABLE NG CHING-FAI

THE HONOURABLE MARGARET NG

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

THE HONOURABLE MA FUNG-KWOK

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE CHEUNG MAN-KWONG

THE HONOURABLE AMBROSE CHEUNG WING-SUM, J.P.

THE HONOURABLE HUI CHEUNG-CHING

THE HONOURABLE CHRISTINE LOH

THE HONOURABLE CHAN KWOK-KEUNG

THE HONOURABLE CHAN YUEN-HAN

THE HONOURABLE BERNARD CHAN

THE HONOURABLE CHAN WING-CHAN

THE HONOURABLE CHAN KAM-LAM

DR THE HONOURABLE LEONG CHE-HUNG, J.P.

THE HONOURABLE MRS SOPHIE LEUNG LAU YAU-FUN, J.P.

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE GARY CHENG KAI-NAM

THE HONOURABLE SIN CHUNG-KAI

THE HONOURABLE ANDREW WONG WANG-FAT, J.P.

DR THE HONOURABLE PHILIP WONG YU-HONG

THE HONOURABLE WONG YUNG-KAN

THE HONOURABLE JASPER TSANG YOK-SING, J.P.

THE HONOURABLE HOWARD YOUNG, J.P.

DR THE HONOURABLE YEUNG SUM

THE HONOURABLE YEUNG YIU-CHUNG

THE HONOURABLE LAU CHIN-SHEK, J.P.

THE HONOURABLE LAU KONG-WAH

THE HONOURABLE LAU WONG-FAT, G.B.S., J.P.

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

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

THE HONOURABLE EMILY LAU WAI-HING, J.P.

THE HONOURABLE CHOY SO-YUK

THE HONOURABLE ANDREW CHENG KAR-FOO

THE HONOURABLE SZETO WAH

THE HONOURABLE TIMOTHY FOK TSUN-TING, J.P.

THE HONOURABLE LAW CHI-KWONG, J.P.

THE HONOURABLE TAM YIU-CHUNG, J.P.

THE HONOURABLE FUNG CHI-KIN

DR THE HONOURABLE TANG SIU-TONG, J.P.

MEMBER ABSENT:

THE HONOURABLE RONALD ARCULLI, J.P.

PUBLIC OFFICERS ATTENDING:

THE HONOURABLE MRS ANSON CHAN, J.P.
THE CHIEF SECRETARY FOR ADMINISTRATION

THE HONOURABLE DONALD TSANG YAM-KUEN, J.P.
THE FINANCIAL SECRETARY

THE HONOURABLE ELSIE LEUNG OI-SIE, J.P.
THE SECRETARY FOR JUSTICE

MR MICHAEL SUEN MING-YEUNG, J.P.
SECRETARY FOR CONSTITUTIONAL AFFAIRS

MR CHAU TAK-HAY, J.P.
SECRETARY FOR TRADE AND INDUSTRY

MR NICHOLAS NG WING-FUI, J.P.
SECRETARY FOR TRANSPORT

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

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

MR RAFAEL HUI SI-YAN, G.B.S., J.P.
SECRETARY FOR FINANCIAL SERVICES

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

MR BOWEN LEUNG PO-WING, J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS

MR KWONG KI-CHI, G.B.S., J.P.
SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING

MISS DENISE YUE CHUNG-YEE, J.P.
SECRETARY FOR THE TREASURY

MR LAM WOON-KWONG, J.P.
SECRETARY FOR THE CIVIL SERVICE

MR STEPHEN IP SHU-KWAN, J.P.
SECRETARY FOR ECONOMIC SERVICES

MR BENEDICT KWONG HON-SANG, J.P.
SECRETARY FOR WORKS

MR DAVID LAN HONG-TSUNG, J.P.
SECRETARY FOR HOME AFFAIRS

MRS REGINA IP LAU SUK-YEE, J.P.
SECRETARY FOR SECURITY

CLERKS IN ATTENDANCE:

MR RICKY FUNG CHOI-CHEUNG, J.P., SECRETARY GENERAL

MR LAW KAM-SANG, J.P., DEPUTY SECRETARY GENERAL

TAKING OF LEGISLATIVE COUNCIL OATH

PRESIDENT (in Cantonese): Members will please remain standing for the taking of the Legislative Council Oath. Dr TANG Siu-tong.

DR The Honourable TANG Siu-tong took the Legislative Council Oath

PRESIDENT (in Cantonese): On behalf of Members, I would like to welcome Dr TANG Siu-tong to this Council.

PAPERS

The following papers were laid on the table pursuant to Rule 21(2) of the Rules of Procedure:

Subsidiary Legislation	L.N. No.
Import and Export (Registration) (Amendment) (No. 2) Regulation 1998	334/98

Specification of Arrangements (Government of the Kingdom of Belgium Concerning Air Services) (Double Taxation) Order	335/98

Specification of Arrangements (Government of the State of Israel Concerning Air Services) (Double Taxation) Order	336/98

Designation of Libraries (Urban Council Area) (No. 3) Order 1998	337/98

Adaptation of Laws (Nationality Related Matters) Ordinance (28 of 1998) (Commencement) Notice 1998	338/98

Fugitive Offenders (New Zealand) Order (L.N. 263 of 1998) (Commencement) Notice 1998	339/98

Sessional Papers

No. 46	─	Land Development Corporation Annual Report 1997-1998

No. 47	─	Vocational Training Council Annual Report 1996/97

No. 48	─	The audited Statements of Accounts of the Provisional Regional Council for the financial year ended 31 March 1998 and the Director of Audit's Report

No. 49	─	Regional Council Annual Report 1997-98

No. 50	─	The audited Statement of Assets and Liabilities, Statements of Receipts and Payments and Statement of Revenue and Expenditure by Select Committees of the Provisional Urban Council for the year ended 31 March 1998 and the Director of Audit's Report

No. 51	─	Urban Council/Provisional Urban Council Annual Report 1997/98

No. 52	─	The Hong Kong Industrial Estates Corporation Annual Report 1997-1998

No. 53	─	Hong Kong Industrial Technology Centre Corporation Annual Report 97-98

No. 54	─	Hong Kong Productivity Council Annual Report 1997/98

No. 55	─	The Government Minute in response to the Tenth Annual Report of the Ombudsman issued in July 1998

ADDRESS

PRESIDENT (in Cantonese): Address. The Chief Secretary for Administration will address this Council on the Government Minute in response to the Tenth Annual Report of the Ombudsman. Chief Secretary for Administration.

The Government Minute in response to the Tenth Annual Report of the Ombudsman

CHIEF SECRETARY FOR ADMINISTRATION (in Cantonese): Madam President, the Tenth Annual Report of the Ombudsman was submitted to the Legislative Council on 22 July, 1998. At that time, the Government undertook to prepare a minute to respond to the recommendations made by the Ombudsman in respect of the cases and studies set out in Appendix 6, 9 and 10 of the Annual Report, so that the Ombudsman and the public can monitor the implementation of the relevant recommendations by the Government and public bodies. I now submit the Government Minute to the Legislative Council.

The Government Minute covers the complaint cases which the Ombudsman has investigated and for which he has made recommendations, as well as seven investigations and two studies which the Ombudsman initiated and carried out in 1996 and 1997. The majority of Policy Bureaux and departments involved in the cases have adopted and followed up the recommendations of the Ombudsman in full, with the exception of a few which have not been able to adopt the Ombudsman's recommendations due to resource constraints or operational limitations. The detailed reasons are given in the Government Minute.

The cases cited in the Government Minute also cover the Judiciary and public bodies such as the Hospital Authority, the Land Development Corporation and the Securities and Futures Commission. Although these organizations are not government departments, they have fulfilled their responsibility of accounting to the public by furnishing us with information on the follow-up actions they have taken in accordance with the Ombudsman's recommendations.

The contribution of the Ombudsman in dealing with public complaints about maladministration and in enhancing the quality of public administration are generally recognized. While the public demands for greater transparency and accountability of the Government, we have also made this our goal. The Government will continue to assist the Ombudsman in fulfilling his duties and strive to ensure that the Office of the Ombudsman and the public bodies within its ambit will maintain a cordial working relationship, so that they can work together to improve the quality of public services.

We are prepared to provide the relevant information should Members wish the Administration to further explain any points in the Government Minute.

WRITTEN ANSWERS TO QUESTIONS

Unauthorized Videotaping of Films in Cinemas

1. MR TIMOTHY FOK (in Chinese): Will the Government inform this Council:

(a) of the legislation or administrative measures currently in place to prohibit the unauthorized videotaping of films being shown in cinemas; and

(b) of the number of persons prosecuted for the above act and the number of those subsequently convicted in the past year, as well as the average penalty imposed on the convicted persons?

SECRETARY FOR TRADE AND INDUSTRY (in Chinese): Madam President,

(a) At present, there is no specific legislation which provides for criminal sanctions against a person who makes video recordings without permission in a cinema. However, unauthorized recording could be contrary to contract conditions governing admission to a cinema, or could constitute a trespass. In either case, a cinema owner would have recourse to civil remedies.

(b) In view of (a) above, there have been no prosecutions or convictions.

Code on Access to Information

2. MR LAU CHIN-SHEK (in Chinese): Will the Government inform this Council:

(a) of the number of cases in which information was sought by the public from various government departments under the Code on Access to Information, and among these cases, the number of those in which requests for information were denied, in each of the past three years;

(b) of the reasons for government departments not providing the requested information to the public, and whether it will review the validity of such reasons and relax the relevant restrictions to enable the public to have greater access to government information; and

(c) whether it will consider publishing regularly the number of cases in which information was sought by the public from various government departments under the Code on Access to Information and a breakdown of these cases according to the types of information sought, so as to enhance the transparency of the operation of the Government?

SECRETARY FOR HOME AFFAIRS (in Chinese): Madam President,

(a) From 1 March 1995 (when the Code on Access to Information was introduced) to 17 October 1998, the Government received a total of 4 748 requests for information. Of these, 4 146 (87.3%) were met, either in full (4 048) or in part (98) and only 115 (2.4%) were refused. The details are shown below:

Period	Total No. of requests for information	No. of requests fully met	No. of requests partially met	No. of requests rejected
1.3.95-31.12.95	455	393	18	21
1.1.96-31.12.96	1 263	1 021	21	32
1.1.97-31.12.97	1 640	1 407	30	36
1.1.98-17.10.98	1 390	1 227	29	26
	-------	------	---	----
	4 748	4 048	98	115

The remaining 487 requests include referrals to other organizations, withdrawals by applicants, requests being processed and others.

A breakdown of the Code-related statistics by department is in Annex A.

(b) The Code requires government bureaux and departments to provide information in response to public requests unless there are specific reasons for not doing so. These reasons are set out in Part 2 of the Code, a copy of which is attached at Annex B. A breakdown of the 115 rejected cases and the 98 partially met requests, as against the reasons for refusal set out in the relevant paragraphs of the Code, is as follows:

		Frequency
Relevant paragraph in Part 2 of the Code	Reasons for refusal	Rejected cases	Partially met requests
2.3	Defence and security	2	1
2.4	External affairs	1	3
2.5	Nationality, immigration and consular matters	2	4
2.6	Law enforcement, legal proceedings and public safety	16	5
2.7	Damage to the environment	-	1
2.8	Management of the economy	-	2
2.9	Management and operation of the public service	19	15
2.10	Internal discussion and advice	15	21
2.11	Public employment and public appointments	2	-
2.12	Improper gain or advantage	3	1
2.13	Research, statistics and analysis	9	14
2.14	Third party information	21	28
2.15	Privacy of the individual	21	17
2.16	Business affairs	6	6
2.17	Premature requests	12	10
2.18	Legal restrictions	7	2
		----	-----
	Total :	136	130
		==	==

The "frequency" total (266) exceeds the number of rejected applications (115) and partially met requests (98) because in some cases, there are more than one reason for rejection.

It has been the Government's established practice to conduct regular reviews of the Code and its Guidelines for Departments with a view to making improvements. The last review was carried out in mid-1997 and amendment sheets issued in early 1998. The next review is scheduled for the end of the year with a view to identifying further improvement to the two documents.

(c) The Home Affairs Bureau releases statistics relating to the implementation of the Code from time to time in response to requests. To enhance transparency, in future we shall release the statistics through press releases on a quarterly basis.

Annex A

Breakdown of Code-related statistics by department
(For the period from 1 March 1995 to 17 October 1998

Department	Total No. of requests for information	No. of requests fully met	No. of requests partially met	No. of requests being rejected	No. of requests referred to appropriate sources or cases in which the information sought is not held by the agency	No. of requests withdrawn by applicants	No. of requests being processed	Others()*
Audit Commission	9	7	0	1	0	1	0	0
Agriculture and Fisheries Department	31	21	3	1	2	1	2	1
Auxiliary Medical Service	1	1	0	0	0	0	0	0
Architectural Services Department	218	196	1	3	11	3	2	2
Buildings Department	29	17	1	4	7	0	0	0
Customs and Excise Department	53	49	1	0	1	1	0	1
Census and Statistics Department	19	17	0	1	1	0	0	0
Constitutional Affairs Bureau	1	0	1	0	0	0	0	0
Civil Aviation Department	11	8	1	0	1	0	1	0
Civil Aid Service	0	0	0	0	0	0	0	0
General Office of the Chief Executive's Office	0	0	0	0	0	0	0	0
Civil Engineering Department	20	14	1	1	1	3	0	0
Companies Registry	10	9	0	1	0	0	0	0
Offices of the Chief Secretary for Administration and the Financial Secretary	5	3	1	0	1	0	0	0
Civil Service Bureau	31	24	1	3	1	1	1	0
Correctional Services Department	21	16	1	2	0	2	0	0
Civil Service Training and Development Institute	1	0	0	0	0	0	0	1
Department of Health	79	70	1	0	1	6	0	1
Department of Justice	18	15	1	2	0	0	0	0
Drainage Services Department	31	24	0	0	4	3	0	0
Education Department	65	46	1	0	12	5	0	1
Education and Manpower Bureau	7	3	0	0	0	4	0	0
Electrical and Mechanical Services Department	9	8	0	0	1	0	0	0
Environmental Protection Department	83	69	3	5	3	1	1	1
Economic Services Bureau	27	18	1	2	5	0	1	0
Finance Bureau	9	8	0	1	0	0	0	0
Financial Services Bureau	6	5	0	1	0	0	0	0
Fire Services Department	24	20	0	0	0	3	1	0
Government Flying Service	2	2	0	0	0	0	0	0
Government Laboratory	20	12	0	0	3	0	5	0
Government Land Transport Agency	0	0	0	0	0	0	0	0
Government Property Administrator	2	2	0	0	0	0	0	0
Government Supplies Department	135	129	2	1	1	1	0	1
Home Affairs Bureau	48	36	1	1	5	3	0	2
Home Affairs Department	181	136	7	10	12	15	1	0
Housing Bureau	7	7	0	0	0	0	0	0
Housing Department	835	732	14	7	19	34	29	0
Hong Kong Auxiliary Police Force	0	0	0	0	0	0	0	0
Hong Kong Monetary Authority	17	12	2	0	1	2	0	0
Hong Kong Observatory	23	20	0	0	0	1	2	0
Hong Kong Police Force	47	35	2	1	8	1	0	0
Hospital Services Department	3	3	0	0	0	0	0	0
Health and Welfare Bureau	11	5	1	0	3	2	0	0
Highways Department	357	301	1	3	26	10	3	13
Independent Commission Against Corruption	12	7	0	1	3	1	0	0
Industry Department	0	0	0	0	0	0	0	0
Immigration Department	45	34	3	3	5	0	0	0
Secretariat of the Independent Police Complaints Council	0	0	0	0	0	0	0	0
Intellectual Property Department	10	7	0	0	2	1	0	0
Inland Revenue Department	18	11	2	4	1	0	0	0
Information Services Department	9	8	0	0	0	1	0	0
Information Technology and Broadcasting Bureau	48	27	6	2	3	5	0	5
Information Technology Services Department	12	12	0	0	0	0	0	0
All registries and administrative offices of courts and tribunals for which the Judiciary Administrator has responsibility	22	10	0	10	1	0	1	0
Legal Aid Department	11	4	4	2	1	0	0	0
Lands Department	67	55	0	3	3	5	1	0
Labour Department	28	23	2	1	2	0	0	0
Land Registry	21	8	0	11	2	0	0	0
Marine Department	14	11	1	1	1	0	0	0
Management Services Agency	13	12	0	0	0	0	1	0
New Airport Projects Co-ordination Office	2	2	0	0	0	0	0	0
Office of the Commissioner of Insurance	45	45	0	0	0	0	0	0
Office of the Telecommunications Authority	4	4	0	0	0	0	0	0
Official Languages Agency	3	3	0	0	0	0	0	0
Official Receiver's Office	8	8	0	0	0	0	0	0
Planning, Environment and Lands Bureau	29	19	0	0	3	3	4	0
Planning Department	995	979	0	6	1	6	3	0
Post Office	16	15	1	0	0	0	0	0
Printing Department	12	12	0	0	0	0	0	0
Secretariat of the Public Service Commission	0	0	0	0	0	0	0	0
Rating and Valuation Department	14	7	2	3	1	1	0	0
Registration and Electoral Office	1	1	0	0	0	0	0	0
Regional Services Department	36	29	2	1	1	1	1	1
Radio Television Hong Kong	2	2	0	0	0	0	0	0
Security Bureau	25	16	1	6	1	0	0	1
Standing Commission on Civil Service Salaries and Conditions of Service	1	0	0	0	0	1	0	0
Standing Committee on Disciplined Services Salaries and Conditions of Service	3	3	0	0	0	0	0	0
Student Financial Assistance Agency	116	100	0	0	0	7	8	1
Social Welfare Department	283	213	17	8	34	6	3	2
Transport Bureau	20	13	1	0	5	1	0	0
Territory Development Department	90	74	0	1	7	7	0	1
Television and Entertainment Licensing Authority	2	2	0	0	0	0	0	0
Technical Education and Industrial Training Department	0	0	0	0	0	0	0	0
Trade and Industry Bureau	3	3	0	0	0	0	0	0
Trade Department	3	3	0	0	0	0	0	0
Transport Department	94	78	4	0	4	2	6	0
Treasury	11	9	0	0	0	2	0	0
University Grants Committee	1	0	0	0	0	1	0	0
Urban Services Department	35	27	1	0	1	5	1	0
Works Bureau	40	36	2	0	2	0	0	0
Water Supplies Department	18	16	0	1	1	0	0	0
Total	4 748	4 048	98	115	215	159	78**	35
Note: () Includes cases where requestors are advised to put their oral requests in writing and cases where the requested records are missing. (*) Cases being processed as at 17 October 1998.

Annex B

CODE ON ACCESS TO INFORMATION

PART 2

INFORMATION WHICH MAY BE REFUSED

2.1

A department may refuse to disclose information, or may refuse to confirm or deny the existence of information, in the categories and for the reasons set out below, which will normally be referred to if a request is refused.

2.2

References in this Part to "harm" and "prejudice" include both actual harm and prejudice and the risk or reasonable expectation of harm and prejudice. In such cases the department will consider whether the public interest in disclosure of the information outweighs any harm or prejudice that could result.

Defence and security

2.3

(a)

Information whose disclosure would harm or prejudice Hong Kong's defence.

(b)

Information whose disclosure would harm or prejudice Hong Kong's security.

EXTERNAL AFFAIRS

2.4

(a)

Information whose disclosure would harm or prejudice the conduct of external affairs, or relations with other governments or with international organizations.

(b)

Information received in confidence from and conveyed in confidence to other governments, courts in other jurisdictions, and international organisations.

Nationality, immigration and consular matters

2.5

(a)

Information relating to immigration or nationality cases.

(b)

Information whose disclosure would harm or prejudice the administration of nationality, registration of persons, immigration or consular matters, or the performance of consular functions as an agent for other governments.

Law enforcement, legal proceedings and public safety

2.6

(a)

Information whose disclosure would harm or prejudice the administration of justice, including the conduct of any trial and the enforcement or administration of the law.

(b)

Information whose disclosure would harm or prejudice the conduct or impartial adjudication of legal proceedings or any proceedings conducted or likely to be conducted by a tribunal or inquiry, whether or not such inquiry is public or the disclosure of the information has been or may be considered in any such proceedings.

(c)

Information which relates to proceedings which have been completed, terminated or stayed, or which relates to investigations which resulted in or may have resulted in proceedings, whether any such proceedings are criminal or civil.

(d)

Information which would be privileged from production in legal proceedings on the ground of legal professional privilege.

(e)

Information whose disclosure would harm or prejudice the prevention, investigation and detection of crime and offences, the apprehension or prosecution of offenders, or the security of any detention facility or prison.

(f)

Information whose disclosure would harm or prejudice the preservation of the peace, public safety or order, or the preservation of property.

(g)

Information whose disclosure might endanger the life or physical safety of any person (whether or not such person is in Hong Kong), or identify the source of information or assistance given in confidence for security purposes, or for the enforcement or administration of the law.

Damage to the environment

2.7

Information whose disclosure would increase the likelihood of damage to the environment or to rare or endangered species and their habitats.

Management of the economy

2.8

Information whose disclosure would harm or prejudice the conduct of monetary policy, the maintenance of stability in financial markets, or the ability of the Government to manage the economy.

Management and operation of the public service

2.9

(a)

Information whose disclosure would harm or prejudice negotiations, commercial or contractual activities, or the awarding of discretionary grants and ex-gratia payments by a department.

(b)

Information whose disclosure would harm or prejudice the competitive or financial position or the property interests of the Government.

(c)

Information whose disclosure would harm or prejudice the proper and efficient conduct of the operations of a department.

(d)

Information which could only be made available by unreasonable diversion of a department's resources.

Internal discussion and advice

2.10

(a)

Papers prepared for, and records of meetings and deliberations of the Executive Council.

(b)

Information whose disclosure would inhibit the frankness and candour of discussion within the Government, and advice given to the Government. Such information may include -

(i)

records of discussion at any internal government meeting, or at any meeting of a government advisory body;

(ii)

opinions, advice, recommendations, consultations and deliberations by government officials or advisers to the Government.

Public employment and public appointments

2.11

Information which would harm or prejudice the management of the public service.

Improper gain or advantage

2.12

Information whose disclosure could lead to improper gain or advantage.

Research, statistics and analysis

2.13

(a)

Information relating to incomplete analysis, research or statistics, where disclosure could be misleading or deprive the department or any other person of priority of publication or commercial value.

(b)

Information held only for preparing statistics or carrying out research, and which relates to individuals, companies or products which will not be identified in reports of that research, or in published statistics.

Third party information

2.14

(a)

Information held for, or provided by, a third party under an explicit or implicit understanding that it would not be further disclosed. However such information may be disclosed with the third party's consent, or if the public interest in disclosure outweighs any harm or prejudice that would result.

(b)

Information provided in confidence by a third party if disclosure to the subject of the information would harm his or any other individual's physical or mental health, or should only be made to him by an appropriate third party.

PRIVACY OF THE INDIVIDUAL

2.15

Information about any person (including a deceased person) other than to the subject of the information, or other appropriate person, unless -

(a)

such disclosure is consistent with the purposes for which the information was collected, or

(b)

the subject of the information, or other appropriate person, has given consent to its disclosure, or

(c)

disclosure is authorised by law, or

(d)

the public interest in disclosure outweighs any harm or prejudice that would result.

Business affairs

2.16

Information including commercial, financial, scientific or technical confidences, trade secrets or intellectual property whose disclosure would harm the competitive or financial position of any person.

Premature requests

2.17

Information which will soon be published, or whose disclosure would be premature in relation to a planned announcement or publication.

Legal restrictions

2.18

Information whose disclosure would constitute -

(a)

a contravention of any law which applies in Hong Kong, or

(b)

a breach of any obligation arising under common law or under any international agreement which applies to Hong Kong.

Organizing Hong Kong Film Festivals Overseas

3. MR MA FUNG-KWOK (in Chinese): It is learned that the Hong Kong Economic and Trade Offices in London and Sydney organized Hong Kong film festivals in London, Melbourne and Sydney in July and August this year. In this connection, will the Government inform this Council:

(a) of the purposes of hosting Hong Kong film festivals overseas and the achievements of the activities mentioned above;

(b) of the criteria used for deciding where to hold film festivals overseas;

(c) of the criteria for selecting films to be screened in such festivals, and the way in which the film industry is consulted during the selection process; and

(d) whether a theme and focal point have been set during film selection for each of the film festivals held overseas; if so, what the details are; if not, why not?

SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING (in Chinese): Madam President,

(a) Film festivals are one of the many activities held overseas to promote Hong Kong. They introduce to audiences and the film industry abroad the vibrancy of our community and the quality of Hong Kong films. Hong Kong film festivals held in London, Melbourne and Sydney were well attended. The festivals generated overseas interest in Hong Kong films and enhanced awareness of Hong Kong as a major film production centre in Asia.

(b) Each of the overseas Hong Kong Economic and Trade Offices (HKETOs) decides on the appropriate promotional events (including organization of film festivals) to be held each year having regard to their respective agenda to promote Hong Kong.

(c) To facilitate their selection of films, overseas HKETOs will seek information on the Hong Kong film market from the Film Services Office of the Television and Entertainment Licensing Authority. The criteria for selecting films to be screened include the popularity of a film, its critical acclaim and awards won. The overseas HKETOs may also consult their local film promotion agents and/or co-organizers of the festivals on what films to screen having regard to the tastes of the local audience in individual countries. The Film Services Office would then liaise with the local film industry on the sourcing of films.

(d) Themes or focal points are not normally set for the selection of films. The festivals usually portray different aspects of Hong Kong's culture and film making styles, and a mix of drama, romance, comedy and thrillers are screened.

The Anderson Road Quarry

4. MR BERNARD CHAN: The hillsides at the Anderson Road Quarry (the Quarry) have become an eyesore of Hong Kong. In this connection, will the Government inform this Council:

(a) of the monthly output of the Quarry in the past 12 months;

(b) whether the Government has made any environmental impact assessment (EIA) on the operation of the Quarry; if so, what the findings are;

(c) whether the Government has received any complaint about the appearance of the Quarry or pollution arising from its operation; and

(d) whether the Government has any plan to close down the Quarry and rehabilitate the hillsides; if not, why not?

SECRETARY FOR WORKS: Madam President, I would like to respond first to part (d) of the question on the Government's plan concerning the Quarry.

The Quarry has been in operation since 1956. Under the old type of contract, the Quarry operator (the Operator) was not required to rehabilitate the Quarry during or after quarry operation, and a bare quarry face would remain at the end of the contract.

In 1989, the Government's Metroplan Landscape Strategy for the Urban Fringe and Coastal Area identified the Quarry site as an area of degraded landscape requiring rehabilitation. The Government thus decided to close the Quarry and restore the bare quarry face through a new Quarry rehabilitation contract under which the contractor/operator would have to finish off, rehabilitate and vegetate the quarry face to approved landforms and details, while processing and marketing the extracted quarry materials for the construction industry's use.

The Government's Development Progress Committee (now known as the Committee on Planning and Land Development), the former Legislative Council Panel on Environmental Affairs, Sai Kung and Kwun Tong District Boards and concern groups were consulted extensively in the development of the rehabilitation scheme.

The new Quarry rehabilitation contract was awarded in March 1997 under which the Operator, within the contract period of 17 years, is required to rehabilitate the Quarry and to form a platform of 40 hectares for future housing development. The Operator has to make payment to the Government for the right to process and sell the quarry products.

The information sought under parts (a), (b) and (c) of the question is given below:

(a) The monthly output from the Quarry from September 1997 to August 1998 is about 0.23 million tonnes on average including aggregates and other rock/soil materials, as shown in Annex A. These materials are further processed and marketed as different quarry products including concrete, bitumen, aggregates, and so on.

(b) In 1993, before the rehabilitation works commenced, an EIA was carried out on the operation of the Quarry. The objective was to provide a detailed assessment of the likely environmental impacts arising from the quarrying/site formation works. The EIA identified there to be air quality, noise, water quality, blasting and solid waste impacts during quarrying and site formation operations, but concluded that, with suitable mitigation measures and good monitoring and audit programme implemented, such impacts could be controlled to within the established standards and guidelines. The EIA study was endorsed by the relevant district boards and government departments. The Operator would implement mitigation measures and conduct regular environmental monitoring and audits to ensure that the environmental standard and guidelines are complied with.

(c) On the appearance of the Quarry, an article entitled "Bite into Mountain" at Tai Sheung Tok appeared in South China Morning Post in June 1998. The so-called "bite area" is in fact being formed as part of the rehabilitation process. The steep slopes of the Quarry will ultimately be flattened to their designed profile, and trees and vegetation will be planted on the formed surfaces. The process aims at improving the overall shape and appearance of Tai Sheung Tok to blend in with the surrounding natural environment. The landscaping and planting will be done progressively working down from the top of the quarry face. The first area to be planted will be completed around early 2000.

In the past two years, a total of seven complaints had been received by the Environmental Protection Department (EPD) on the pollution arising from the operation of the Quarry. Only one of the above complaints was justifiable for further action under the pollution control ordinances, while the other complaints are unsubstantiated. That complaint was received in August 1998, concerning dust emission from a concrete batching plant in the Quarry. The Operator had been asked to take practicable measures to minimize the dust emission. However, no further follow-up action was warranted as that concrete batching plant was later dismantled in mid-October 1998.

In the Sai Kung Provisional District Board (SKPDB) meeting on 7 October 1998, members raised concerns on the environmental impacts of the Quarry to residents at Tseng Lan Shue. The concerns included:

(i) the deposition of soil in stream course due to stormwater discharge from the Quarry during heavy rain; and

(ii) the effect of shock vibration from blasting in the Quarry.

Site inspection was carried out on the following day on 8 October 1998 with representatives from local residents, SKPDB, the Civil Engineering Department and the Operator. Various mitigation measures had been proposed, which included:

(i) construction of desilting traps to prevent excessive sedimentation due to stormwater discharge from the Quarry site;

(ii) removal of sediment from the stream course; and

(iii) vibration monitoring at a detached house at Tseng Lan Shue to measure the effect of vibration due to blasting.

The measures were endorsed by the SKPDB representative. Of these, item (i) has been completed and item (ii) is in good progress. Item (iii) is an on-going exercise; so far, the results were found to be within the limits imposed by the Commissioner of Mines.

A review of the blasting method is being carried out by the Operator with a view to further minimize blast vibration.

Annex A

Monthly Output of Anderson Road Quarry

				Production Quantity
	Output			Aggregates
Month/Year	(aggregates and other rock/soil)	Concrete	Bitumen	fine	10 and 20 mm	40 mm	Other rock/soil
	tonne	cu m	tonne	tonne
September 1997	249 045	82 739	56 240	77 452	113 596	27 868	30 129
October 1997	260 048	77 804	44 139	91 642	128 060	19 889	20 458
November 1997	277 279	84 739	57 380	93 040	132 870	11 278	40 091
December 1997	296 249	96 674	66 141	96 885	146 744	10 543	42 078
January 1998	240 699	72 547	74 433	77 198	109 146	14 724	39 631
February 1998	222 660	51 897	46 282	73 003	114 227	8 689	26 741
March 1998	292 436	71 951	64 686	91 003	138 319	8 755	54 359
April 1998	269 036	60 576	45 920	85 834	131 585	12 698	38 919
May 1998	223 695	66 179	42 637	64 840	100 384	10 465	48 006
June 1998	126 664	60 238	67 347	35 339	42 007	6 741	42 577
July 1998	126 304	63 403	51 031	34 815	44 148	8 218	39 123
August 1998	158 352	49 148	44 453	43 436	61 599	16 978	36 339
Total	2 742 467	837 895	660 689	864487	1 262 685	156 846	458 451

Air Pollution Caused by Air-conditioned Buses

5. MR LAU WONG-FAT (in Chinese): Will the Government inform this Council whether:

(a) it has compared the levels of emissions from air-conditioned (AC) buses and non-air-conditioned buses while they are running on the road; and

(b) it will consider requiring companies providing regular bus route service to install openable windows on their AC buses and to turn off the air-conditioning system on AC buses during autumn and winter time, in order to reduce air pollution?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Chinese): Madam President,

(a) All vehicles, including buses, which travel with air-conditioning systems turned on consume more fuel. This in turn leads to higher emission levels. For buses, the most significant impact on emission levels comes from engine design and vehicle maintenance. In order to reduce emissions, all buses must meet the same stringent emission standard when they are first registered in Hong Kong irrespective of whether they are AC or not. Since April 1997, all newly registered buses must comply with an emission standard equivalent to that of the Euro II standard. Furthermore, all in-service buses must not emit smoke in excess of the statutory limit of 60 Hartridge Smoke Units. They are checked against this limit as part of their annual roadworthiness inspection by the Transport Department.

(b) The purpose of providing AC bus services is to meet passenger's expectation of a better, quieter and cleaner travelling environment all year round. AC buses provide cool air to commuters during the hot seasons and proper ventilation and warm air during the cooler months. This purpose may not be served if buses are required to turn off their air-conditioning system at certain times of the year or if there is no way of ensuring that all windows remain closed when the air-conditioning system is switched on. We will continue to work closely with the bus companies to encourage and assist them in identifying and implementing practical measures which will help improve vehicle emission and energy conservation.

Air Pollution Caused by Vehicle Emissions

6. MRS SOPHIE LEUNG: To control air pollution caused by vehicle emissions, will the Government inform this Council:

(a) of the numbers of imported vehicles, by types of fuel consumed, during each month over the past three years;

(b) whether there are plans to tighten the emission standards of new vehicles; and

(c) whether there are incentive measures to encourage individual vehicle owners and fleet operators to switch over to fuels other than diesel?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Madam President,

(a) Since not all imported vehicles are used on the roads of Hong Kong due to re-exports, it may be useful instead to provide statistics on the number of vehicles registered for use in Hong Kong. The accumulated monthly breakdown, according to the type of fuel consumed (diesel, petrol, electricity, liquefied petroleum gas (LPG) and others), for registered vehicles in the last three years, is provided at Annex A.

(b) It is our established policy to adopt the most stringent fuel and vehicle emission standards which are technologically practical and available. Unleaded petrol was introduced in 1991. Since 1992, all petrol vehicles have to be fitted with three-way catalytic converters to clean up exhaust emissions. At present, 90% of the petrol vehicles in Hong Kong are using unleaded petrol. We plan to phase out completely the sale of leaded petrol in early 1999. We have also progressively tightened the emission standards for newly registered diesel vehicles since 1995. All newly registered diesel vehicles are required to meet the latest European and United States standards. In line with the practice of the European Union, we intend to further tighten the emission standards of certain classes of newly registered light duty motor vehicles in 1999. Vehicles meeting these new standards will emit 55% less particulates and 38% less hydrocarbons and nitrogen oxides than old models. At the same time, we will also add an emission control standard on evaporative loss for newly registered petrol vehicles. This will help control the formation of photochemical smog.

A set of emission standards based on those of the European Union, Japan and the United States for newly registered motorcycles will be introduced in 1999. Although motorcycles comprise only 5% of our motor vehicle fleet, introduction of emission standards for motorcycles will ensure that Hong Kong could keep pace with the latest development elsewhere.

Our vehicle emission standards are not only among the most stringent in Asia but are also on a par with the European Union. We will further tighten vehicle emission standards whenever they become practical and available to Hong Kong. We are also actively pursuing clean practical alternative fuel to reduce the heavy reliance on diesel. The introduction of LPG taxis represents an important step to clean up the air.

(c) At present, the first registration tax for electric vehicles is waived. We are also consulting the public on a proposal to require all newly registered taxis to use LPG from end of 2000. We will explore with the taxi trade and relevant parties arrangements to ensure that the operating costs of LPG taxis in Hong Kong would be comparable to that of diesel taxis.

Annex A

Accumulative number of registered diesel-engine vehicles in the past three years (from the month of October 1995 to September 1998)

Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total
1995
October	0	4662	18184	6876	9841	85419	38287	1796	225	165290
November	0	4672	18196	6879	9906	85351	38369	1810	225	165408
December	0	4651	18190	6875	9932	85123	38409	1829	226	165235

1996
January	0	4646	18197	6870	9975	84974	38452	1836	227	165177
February	0	4642	18195	6872	10045	84793	38476	1848	228	165099
March	0	4623	18126	6861	10039	84660	38577	1862	229	164977
April	0	4601	18126	6850	10127	84474	38733	1903	234	165048
May	0	4595	18126	6852	10186	84371	38862	1924	236	165152
June	0	4581	18126	6843	10232	84175	38907	1957	238	165059


Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total
July	0	4563	18126	6829	10282	84111	38994	1986	238	165129
August	0	4544	18126	6808	10379	83770	39070	2020	240	164957
September	0	4532	18126	6790	10425	83727	39163	2047	241	165051
October	0	4502	18126	6779	10506	83738	39242	2086	241	165220
November	0	4498	18126	6774	10577	83715	39320	2122	247	165379
December	0	4484	18126	6776	10648	83627	39369	2142	247	165419

1997
January	0	4457	18123	6769	10694	83315	39346	2157	253	165114
February	0	4446	18123	6779	10771	83265	39398	2168	257	165207
March	0	4415	18123	6770	10884	83347	39622	2242	268	165671
April	0	4399	18123	6756	10915	83194	39660	2255	270	165572
May	0	4378	18126	6760	11039	83301	39802	2282	276	165964
June	0	4367	18133	6746	11088	83128	39832	2295	284	165873
July	0	4358	18133	6735	11079	83401	39985	2321	286	166298
August	0	4349	18133	6729	11177	83455	40090	2369	288	166590
September	0	4350	18133	6728	11216	83667	40256	2417	293	167060
October	0	4353	18133	6710	11287	84075	40398	2467	295	167718
November	0	4356	18103	6704	11390	84245	40471	2512	297	168078
December	0	4340	18098	6697	11407	84220	40486	2544	295	168087

1998
January	0	4300	18098	6692	11466	84294	40450	2555	299	168154
February	0	4318	18098	6689	11472	84129	40490	2578	300	168074
March	0	4326	18098	6693	11500	84385	40648	2620	305	168573
April	0	4281	18100	6692	11533	84319	40635	2646	308	168514
May	0	4273	18100	6689	11679	84243	40681	2684	314	168663
June	0	4241	18100	6678	11841	84060	40618	2685	319	168542
July	0	4219	18100	6664	11996	83975	40605	2695	318	168572
August	0	4193	18100	6666	12160	83756	40588	2700	320	168483
September	0	4152	18100	6646	12170	83678	40559	2710	320	168335

Accumulative number of registered petrol-engine vehicles in the past three years (from the month of October 1995 to September 1998)
Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total
1995
October	28954	313266	0	60	0	11193	0	0	24	324543
November	29037	313654	0	60	0	11066	0	0	24	324804
December	29096	313536	0	60	0	10929	0	0	24	324549

1996
January	29172	313881	0	59	0	10779	0	0	25	324744
February	29267	314301	0	58	0	10660	0	0	25	325044
March	29353	314639	0	58	0	10570	0	0	25	325292
April	29367	315055	0	58	0	10411	0	0	26	325550
May	29597	315885	0	58	0	10247	0	0	29	326219
June	29621	316167	0	58	0	10095	0	0	31	326351
July	29709	317041	0	56	0	9976	0	0	32	327105
August	29818	317481	0	54	0	9813	0	0	33	327381
September	29957	318346	0	54	0	9698	0	0	35	328133
October	30091	319043	0	54	0	9558	0	0	35	328690
November	30167	320025	0	54	0	9400	0	0	37	329516
December	30166	320604	0	53	0	9256	0	0	39	329952

1997
January	30310	322306	3	52	0	9070	0	0	39	331470
February	30342	323086	3	52	0	8956	0	0	39	332136
March	30414	324056	3	50	0	8796	0	0	40	332945
April	30502	326339	3	50	0	8658	0	0	41	335091
May	30613	328692	3	47	0	8551	0	0	41	337334
June	30623	330376	3	47	0	8369	0	0	41	338836
July	30724	332768	3	47	0	8242	0	0	43	341103
August	30835	334972	3	45	0	8101	0	0	44	343165
September	30945	338295	3	45	0	7944	0	0	45	346332
October	31115	341192	3	45	0	7842	0	0	45	349127
November	31186	342711	3	45	0	7728	0	0	46	350533
December	31211	344068	8	45	0	7587	0	0	46	351754


Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total

1998
January	31261	346035	8	45	0	7466	0	0	47	353601
February	31320	346434	8	45	0	7331	0	0	48	353866
March	31432	348414	8	45	0	7241	0	0	53	355761
April	31478	349348	8	45	0	7117	0	0	58	356576
May	31552	350275	8	43	0	7049	0	0	59	357434
June	31578	351130	8	43	0	6941	0	0	60	358182
July	31673	351915	8	42	0	6824	0	0	60	358849
August	31729	352360	8	41	0	6704	0	0	61	359174
September	31790	353366	8	35	0	6575	0	0	61	360045

Accumulative number of registered electric vehicles in the past three years (from the month of October 1995 to September 1998)

Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total
1995
October	0	7	0	0	0	6	0	0	33	46
November	0	7	0	0	0	7	0	0	34	48
December	0	7	0	0	0	7	0	0	34	48

1996
January	0	7	0	0	0	7	0	0	34	48
February	0	7	0	0	0	7	0	0	34	48
March	0	7	0	0	0	7	0	0	34	48
April	0	7	0	0	0	7	0	0	34	48
May	0	7	0	0	0	7	0	0	34	48
June	0	7	0	0	0	7	0	0	32	46
July	0	7	0	0	0	7	0	0	32	46
August	0	7	0	0	0	7	0	0	32	46
September	0	7	0	0	0	7	0	0	32	46
October	0	7	0	0	0	7	0	0	32	46
November	0	7	0	0	0	6	0	0	32	45
December	0	7	0	0	0	6	0	0	32	45


Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total

1997
January	0	7	0	0	0	6	0	0	32	45
February	1	7	0	0	0	6	0	0	32	46
March	1	7	0	0	0	6	0	0	32	46
April	1	6	0	0	0	6	0	0	30	43
May	1	6	0	0	0	6	0	0	30	43
June	1	6	0	0	0	6	0	0	29	42
July	1	6	0	0	0	6	0	0	29	42
August	1	6	0	0	0	6	0	0	30	43
September	1	8	0	0	0	6	0	0	30	45
October	1	8	0	0	0	6	0	0	33	48
November	1	8	0	0	0	6	0	0	33	48
December	1	8	0	0	0	6	0	0	33	48

1998
January	1	8	0	0	0	6	0	0	35	50
February	1	10	0	0	0	6	0	0	35	52
March	1	12	0	0	0	6	0	0	35	54
April	1	12	0	0	0	5	0	0	35	53
May	1	14	0	0	0	5	0	0	36	56
June	1	14	0	0	0	5	0	0	36	56
July	1	14	0	0	0	5	0	0	35	55
August	1	14	0	0	0	5	0	0	35	55
September	1	14	0	0	0	5	0	0	35	55

Accumulative number of registered LPG vehicles in the past three years (from the month of October 1995 to September 1998)
Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total
1995
October	0	0	0	0	0	0	0	0	0	0
November	0	0	0	0	0	0	0	0	0	0
December	0	0	0	0	0	0	0	0	0	0


Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total

1996
January	0	0	0	0	0	0	0	0	0	0
February	0	0	0	0	0	0	0	0	0	0
March	0	0	0	0	0	0	0	0	0	0
April	0	0	0	0	0	0	0	0	0	0
May	0	0	0	0	0	0	0	0	0	0
June	0	0	0	0	0	0	0	0	0	0
July	0	0	0	0	0	0	0	0	0	0
August	0	0	0	0	0	0	0	0	0	0
September	0	0	0	0	0	0	0	0	0	0
October	0	0	0	0	0	0	0	0	0	0
November	0	0	0	0	0	0	0	0	0	0
December	0	0	0	0	0	0	0	0	0	0

1997
January	0	0	0	0	0	0	0	0	0	0
February	0	0	0	0	0	0	0	0	0	0
March	0	0	0	0	0	0	0	0	0	0
April	0	0	0	0	0	0	0	0	0	0
May	0	0	0	0	0	0	0	0	0	0
June	0	0	0	0	0	0	0	0	0	0
July	0	0	0	0	0	0	0	0	0	0
August	0	0	0	0	0	0	0	0	0	0
September	0	0	0	0	0	0	0	0	0	0
October	0	0	0	0	0	0	0	0	0	0
November	0	0	30	0	0	0	0	0	0	30
December	0	0	30	0	0	0	0	0	0	30

1998
January	0	0	30	0	0	0	0	0	0	30
February	0	0	30	0	0	0	0	0	0	30
March	0	0	30	0	0	0	0	0	0	30
April	0	0	30	0	0	0	0	0	0	30
May	0	0	30	0	0	0	0	0	0	30
June	0	0	30	0	0	0	0	0	0	30
July	0	0	30	0	0	0	0	0	0	30
August	0	0	30	0	0	0	0	0	0	30
September	0	0	30	0	0	0	0	0	0	30

Accumulative number of registered vehicles powered by alternative fuels in the past three years (from the month of October 1995 to September 1998)

Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total

1995
October	0	39	0	0	0	11	6	2	25	83
November	0	39	0	0	0	11	6	2	26	84
December	0	39	0	0	0	11	6	2	27	85

1996
January	0	39	0	0	0	11	6	2	27	85
February	0	39	0	0	0	11	6	2	27	85
March	0	38	0	0	0	11	6	2	27	84
April	0	38	0	0	0	11	6	2	28	85
May	0	37	0	0	0	11	6	2	28	84
June	0	37	0	0	0	11	6	2	28	84
July	0	37	0	0	0	11	6	2	28	84
August	0	36	0	0	0	11	6	2	28	83
September	0	36	0	0	0	11	6	2	27	82
October	0	36	0	0	0	11	6	2	27	82
November	0	37	0	0	0	11	6	2	27	83
December	0	36	0	0	0	11	6	2	27	82

1997
January	0	36	0	0	0	11	6	2	28	83
February	0	36	0	0	0	11	6	2	28	83
March	0	36	0	0	0	11	6	2	28	83
April	0	36	0	0	0	11	6	2	31	86
May	0	36	0	0	0	11	6	2	30	85
June	0	36	0	0	0	11	6	2	30	85
July	0	36	0	0	0	10	6	2	30	84
August	0	36	0	0	0	10	6	2	31	85
September	0	35	0	0	0	10	6	2	31	84
October	0	34	0	0	0	10	6	2	31	83
November	0	34	0	0	0	10	6	2	31	83
December	0	34	0	0	0	10	6	2	32	84


Vehicle Type
Month	Motor Cycle	Private Car	Taxi	Light Bus	Bus	Light Goods Vehicle	Medium Goods Vehicle	Heavy Goods Vehicle	Special Purpose Vehicle	Total
1998
January	0	33	0	0	0	10	6	2	32	83
February	0	32	0	0	0	10	6	2	32	82
March	0	31	0	0	0	10	6	2	32	81
April	0	31	0	0	0	10	6	2	31	80
May	0	31	0	0	0	10	6	2	31	80
June	0	31	0	0	0	10	6	2	31	80
July	0	31	0	0	0	10	6	2	31	80
August	0	31	0	0	0	9	6	2	31	79
September	0	31	0	0	0	9	6	2	30	78

Production of HOS Flats

7. MR NG LEUNG-SING (in Chinese): In the 1998 policy address, the Government has stated that it will consider the extent to which it will continue to build Home Ownership Scheme (HOS) flats as opposed to the alternative of offering home ownership loans. In this connection, will the Government inform this Council whether:

(a) the long-term target of 70% home ownership will be affected as a result; and

(b) it will consider formulating corresponding measures to prevent a sharp rise in property prices in the wake of its move to stop or reduce the production of HOS flats?

SECRETARY FOR HOUSING (in Chinese): Madam President, the Government keeps the subsidized home ownership schemes and loans schemes under regular review to ensure that they can continue to meet the needs of target groups. The recent consolidation of private residential property prices provides an opportunity to consider the extent to which subsidized home ownership flat production may be replaced by additional loans for families to buy flats in the private sector.

The Government has no intention of ending the HOS which remains popular and which is necessary for achieving our key housing targets. The review will examine the long-term feasibility of adjusting the ratio of flats built to loans provided. Thus our target of achieving 70% home ownership by 2007 remains unaffected.

In the review, we will also consider the potential impact on property prices of any new measure to be introduced. It remains our aim to promote stability in the residential property market. In view of the importance and complexity of this issue, interested parties including the Housing Authority, Housing Society and representatives of the property and banking sectors will be consulted before conclusions are reached during 1999.

Prudent Management of the Exchange Fund

8. MR ALBERT HO (in Chinese): Regarding the Government's use of the Exchange Fund to intervene in the stock and futures markets in August this year, will the Government inform this Council:

(a) whether the Administration had previously purchased Hong Kong shares and futures; if so, please provide a breakdown of the years of purchase and the respective amounts of money spent;

(b) whether the Administration has traded in the stock options market; and

(c) whether an assessment has been made to determine if the Administration's trading in the futures market is in compliance with the principle of prudent management of the Exchange Fund?

SECRETARY FOR FINANCIAL SERVICES (in Chinese): Madam President,

(a) In the 1980s, the Exchange Fund had been used by the Government to acquire shares and through the Development Loan Fund the Government's holdings in some companies. One of the policy considerations for acquiring these shares was to avoid fuelling credit growth by holding cash in the form of bank deposits under the Hong Kong dollars asset portfolio of the Exchange Fund. As such, it was decided in 1981 to allow the Exchange Fund to hold equities as investments in Hong Kong dollar. The equities acquired are listed below:

Companies	Percentage of Total Issued Shares	Period of Holding
Cable and Wireless Company (unlisted)	20%	1981-1988 (converted into Hong Kong Telecom shares)
Hong Kong Telecom (listed)	6.78%	1988-1990
Hong Kong Air Cargo Terminals Company (unlisted)	10%	1983-1992
Hong Kong Building and Loan Agency (listed)	16.88%	1983-1991
Cross Harbour Tunnel Company (listed)	24.33%	1983-1991

Also, in the mid 1980s, the Government through the Exchange Fund took over two local banks, that is, Hang Lung Bank in 1984 and Overseas Trust Bank in 1985. The respective costs of acquiring these shares are not readily available. However, the total market value of these shares were $3.1 billion calculated at the prices of 1998, representing 2.35% of the total assets of the Exchange Fund at that time. All these shares were disposed of by the Government in the early 1990s.

The Government has never purchased any futures contracts traded on the Hong Kong Futures Exchange through the Exchange Fund prior to the August market operations.

(b) During the operation in August, the Government purchased a small amount of Hong Kong Index Options traded on the Hong Kong Futures Exchange.

(c) We should put the Government's trading in the futures market in August in the context of the market operations to frustrate double market play by manipulators. The objective of the operations is to protect the stability and integrity of the monetary and financial systems of Hong Kong. This is in line with the purposes of the Exchange Fund as provided for in section 3(1) and 3(1A) of the Exchange Fund Ordinance.

Provision of Hospital Beds in Northwest New Territories

9. MR TAM YIU-CHUNG (in Chinese): Regarding the provision of hospital beds in Northwest New Territories, will the Government inform this Council:

(a) of the respective ratios of hospital beds to residents in Yuen Long and Tuen Mun, and how these ratios compare with the average ratio of hospital beds to the population in the whole of Hong Kong;

(b) of the specific implementation timetable for the planned expansion of the Pok Oi Hospital to increase the number of hospital beds by 272;

(c) whether consideration will be given to the further expansion of the Pok Oi Hospital by way of land resumption so as to increase the number of hospital beds in Northwest New Territories; and

(d) whether, in view of the increasing population in Tin Shui Wai, there is any plan for building a general hospital in the district to meet the needs of the local community; if not, why not?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) The Hospital Authority (HA) provides medical services for the whole community through its eight Hospital Clusters. The medical services of Yuen Long and Tuen Mun are provided by the New Territories North Cluster. At present, hospitals in the Cluster, namely, Pok Oi Hospital, Tuen Mun Hospital, Fanling Hospital, Siu Lam Hospital, Castle Peak Hospital and the newly opened North District Hospital, provide a total of more than 4 500 hospital beds. The bed-to-population-ratio in the New Territories North Cluster is 4.09 beds per 1 000 population, which is comparable to that of the whole territory. In the development of hospital services, the HA will adjust the bed-to-population-ratio of individual Clusters according to various factors, such as the population and demographic structure of the districts, the scope and nature of the services in demand, and the cross-cluster utilization of services.

(b) The Government has earmarked funds for the expansion project of the Pok Oi Hospital. The HA plans to carry out the project in two phases to ensure that the Hospital will continue to provide services, at an appropriate level, to the public during the redevelopment period. According to the present plan, we will seek funds from the Finance Committee (FC) of the Legislative Council in 1999 and 2000 for the preparation and construction works of the project respectively. Subject to the FC's approval, the HA expects that Phases one and two of the construction works will commence in 2000 and 2004 and are scheduled for completion in 2003 and 2006 respectively.

(c) The current expansion project of the Pok Oi Hospital will be carried out in-situ. At present, we do not have any plans to further expand the Hospital through land resumption.

(d) Upon completion of the expansion project, the Pok Oi Hospital will become a general acute hospital with more than 740 beds. Apart from the additional 272 beds, the quality of services will also be improved by the expanded facilities and new equipment. To cope with the population growth in the Yuen Long and Tin Shui Wai areas in the next decade, the Government is considering to reserve land in Kam Tin, Yuen Long for development of another convalescent/rehabilitation hospital.

Claims Concerning Medical Incidents

10. MR LEUNG YIU-CHUNG (in Chinese): Does the Government know:

(a) of the total number of successful claims against the Hospital Authority (HA) or its underwriter insurance companies arising from "professional negligence" on the part of the HA in the past three years, and the total amount of compensation involved (please list the respective numbers of cases where an agreement on compensation was reached with the claimant without the initiation of proceedings, those where the claims were awarded by the court and those where the claims were settled out of court with the claimants);

(b) of the respective numbers of claims which the HA is still processing and those which are currently undergoing court proceedings, and the total amount of claims involved; and

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) During the past three years between 1995 and 1997, compensations amounting to $2.7 million were paid for a total of 15 cases of medical incident. None of these cases was due to "professional negligence" as ruled by the court. Among the 15 cases, 14 were settled out of court with the claimants without going through court proceedings. The remaining case was settled out of court with the claimant. In making the settlements, the HA and the claimants agreed to keep the settlement amount confidential. As such, the HA cannot disclose the respective amount of each settlement.

(b) The HA is currently handling a total of 11 claims, none of which are undergoing court proceedings. As negotiations with the claimants are underway, it is not appropriate to disclose the total amount of claims involved at this stage.

(c) Risk in connection with health care work covers a wide scope of areas. Hospital premises, medical equipment and apparatus, biochemical and pharmaceutical products for hospital use, and medical procedures and so on all carry some intrinsic risks. Proper management of these risks can reduce the chances for patients or other people to lodge claims for compensation against the HA. A Risk Management Steering Group has been set up at the HA Head Office to review the adequacy of risk management measures currently adopted in hospitals, to identify the areas for improvement and to devise strategies to fully implement these measures. A risk management committee has also been set up in each hospital to implement risk management measures.

Cases of Abortive Landing

11. MR LAU KONG-WAH (in Chinese): It is reported that seven cases of abortive landing have happened since the opening of the new airport, and that the most recent case happened on 1 October. In this connection, will the Government inform this Council:

(a) of the causes for and the details of the incident on 1 October, and whether an assessment has been made to see if human negligence was involved;

(b) of the reasons for the occurrence of several cases of abortive landing within the first three months after the opening of the new airport; and how the figure compares to the corresponding figure recorded within the year before the closure of the airport at Kai Tak;

(c) whether regular reviews of the taking-off and landing of flights and of the related arrangements are conducted by the Civil Aviation Department; and

(d) of the measures to prevent the recurrence of similar incidents?

SECRETARY FOR ECONOMIC SERVICES (in Chinese): Madam President, aircraft may need to abort landing in the course of their approach because of various reasons such as bad weather or visibility, deviation of the aircraft from the standard approach flight path and the existence of other aircraft or obstacles on the runway when the concerned aircraft is preparing to land. To cater for such situation, the Civil Aviation Department has designed and published standard and safe go around procedures in accordance with the guidelines of the International Civil Aviation Organization (ICAO). Similar procedures are also in place at all other international airports. Where necessary, Air Traffic Controllers will instruct the approaching aircraft to go around according to established procedures to ensure safety. The use of go around procedures is not an indication of an emergency or dangerous situation.

For the four specific questions raised, our replies are as follows:

(a) At 4.50 pm on 1 October, flight CX460 of the Cathay Pacific Airways was on the runway preparing for take-off. Its pilot reported to the Air Traffic Controllers that a passenger was standing inside the cabin and had yet to sit down and buckle up their safety belts as required. Therefore, the aircraft could not take off immediately. At that juncture, flight MU503 of the China Eastern Airlines was approaching the airport. When the Air Traffic Controllers received the report of the pilot of flight CX460, they immediately instructed flight MU503 to go around in the interest of flight safety. Flight MU503 started to climb at a point 5 km from the runway and at an altitude of 600 ft. When it flew over the beginning of the runway, it was at an altitude of about 1 500 ft. As such, there was no danger of collision with flight CX460. The Civil Aviation Department carried out an evaluation after the incident and confirmed that the Air Traffic Controllers had taken prompt and correct action to ensure flight safety. Moreover, the concerned airline had to follow the safety procedures before take-off in order to ensure the safety of its passengers.

(b) During the period between July 1997 and June 1998, the total number of go around cases at Kai Tak was 632. The monthly average was about 52 cases and the number of cases for individual months ranged from 12 to 166. In the first three months after the opening of the new airport, the total number of go around cases was 27, or nine cases per month on average. The number of go around cases for July, August and September was seven, 16 and four respectively. As mentioned above, the causes of these go around cases included bad weather or visibility, deviation of the aircraft from the standard approach flight path and the existence of other aircraft or obstacles on the runway when the concerned aircraft was preparing to land.

The flight procedures of the new airport, including arrangements for the take-off and landing of aircraft, are in compliance with the standards of the ICAO. The Civil Aviation Department attaches great importance to flight safety. In order to further ensure flight safety, the Air Traffic Management Division and the Airport Standards Division of the Department carry out internal investigation into every go around case. They also conduct regular reviews of the arrangements for take-off and landing of aircraft. Any proposals that can improve air traffic control and ground/flight operations will be implemented. The Civil Aviation Department will continue to monitor the landing and take-off of aircraft, and where practicable will strive to keep the number of cases of go around to the minimum.

Budget Deficit

12. DR DAVID LI: It is learnt that the Government may experience budget deficit in the next few years, because of decreasing revenues from taxes and land sales on the one hand and increasing expenditure on infrastructural projects and welfare on the other hand. In this connection, will the Government inform this Council whether it will consider resorting to drawing money up to a certain limit from its reserves for meeting such anticipated budget deficit in advance of other measures?

SECRETARY FOR THE TREASURY: Madam President, as the Financial Secretary made it clear in his Budget speech on 18 February 1998, one of the purposes of the fiscal reserves is to meet the contingency requirements of public finance in order to offset the effects of any downswing in the economic cycle, or to cope with the consequences of unforeseen events in the world or the region that would have serious implications for public finance. For this purpose, we estimated that an amount of between six and 12 months' government expenditure would be sufficient to cushion the budget from economic shocks.

Under Article 107 of the Basic Law, we must strive to avoid budget deficits. Only after examination of all other reasonable expenditure reducing and revenue enhancing measures, taking into account the economic situation, and after assessing our financial position over the medium term, would we draw on the fiscal reserves to the extent necessary to finance an occasional deficit.

Given both the cost of the relief measures announced on 22 June, and the effects of the current global financial crisis, we expect the budget deficit for the current year to be substantially in excess of $20 billion, which will entail an equivalent reduction in the level of the fiscal reserves.

We are still in the process of consulting Members of this Council on revenue measures for 1999-2000 Budget, and it would be premature to estimate the size of any budget deficit in that year, and therefore, to what extent this would entail a further draw down from the fiscal reserves.

New Tariff Structure of CLP

13. MR FRED LI (in Chinese): When the China Light and Power Company Limited (CLP) put in force a new tariff structure in March this year, the originally three-block tariff structure applicable to domestic customers was changed to a four-block structure. As a result, households with higher consumption rates are required to pay much higher tariffs than those calculated under the old structure. In this connection, will the Government inform this Council whether:

(a) it knows of the person or the party who made the proposal of changing CLP's tariff structure;

(b) it is aware of the justifications for CLP changing its tariff structure, and of any consultation that might have been conducted before the new tariff structure was adopted;

(c) the Scheme of Control made between the Administration and CLP provides for any restrictions on revising the tariff structure;

(d) it has assessed the impact of the new tariff structure on larger households; and

(e) it knows if CLP has defined a particular consumption level as "electricity wastage"; if so, of the criteria adopted; if not, the justifications for adopting a progressive tariff structure?

SECRETARY FOR ECONOMIC SERVICES (in Chinese): Madam President,

(a) The proposal to change the domestic tariff structure from three-block to four-block was made by CLP.

(b) According to CLP, the reasons for the change were to encourage efficient use of energy and to reduce the rate of tariff increase for domestic customers with low consumption. CLP estimated that under the new structure, 83.8% of their domestic customers would see a tariff increase below the 4.9% average increase announced in February. CLP considered that the change from the original structure to a four-block structure would not affect the Company's level of profits. The four-block tariff structure would not bring extra profits to the Company. CLP had not consulted the Economic Services Bureau nor the Energy Advisory Committee before they adopted the new domestic tariff structure.

(c) The Scheme of Control Agreement between the Government and CLP does not provide for any restrictions on revising the tariff structure. It only controls the basic tariff rate. The basic tariff rate is determined on the basis of total revenue of CLP from sales of electricity to Hong Kong consumers.

(d) As CLP had not consulted this Bureau prior to their implementation of the new tariff structure, we do not have enough information to assess its impact on larger households; and

(e) We understand that CLP has not defined a particular consumption level as "electricity wastage". According to CLP, the progressive tariff structure aims to promote efficient use of energy in order to achieve energy savings.

We are concerned about the response of the public to CLP's new domestic tariff structure. We have asked CLP to provide us with more information about the new tariff structure. Also the Legislative Council Economic Services Panel will discuss CLP's new domestic tariff structure at its meeting of 10 November 1998. CLP will submit a report to the Panel and attend the meeting to explain the new tariff structure and related issues.

Publication of Economic Data

14. MR ERIC LI (in Chinese): Will the Government inform this Council:

(a) how the time frame for the publication of economic data and prospect forecasts is determined; and

(b) whether there is any measure in place to shorten the data processing time, so that the relevant data can be published as soon as possible.

SECRETARY FOR FINANCIAL SERVICES (in Chinese): Madam President,

(a) In determining the timeframe for the publication of economic data and the release of economic forecast, we will give due consideration to the time required for collection of raw data, data processing (including input, validation, editing, compilation), and data analysis (including analysis of the latest trend and the factors affecting it).

Our primary aim is of course to release the data and the forecast as timely as possible. For this purpose, information technology has been widely applied to expedite production of statistics. But very often, the major constraint lies with data collection. Much effort has been applied in this regard to secure full co-operation of suppliers of raw data. But we also recognize that raw data suppliers themselves do need time to provide the information needed.

Where appropriate, provisional estimates based on partial information are produced to enable the data to be disseminated earlier. However, there is often a trade-off between timeliness on the one hand and statistical accuracy and reliability on the other. Our statistical policy is to strike a balance between the two.

(b) Hong Kong has since April 1997 subscribed to the Special Data Dissemination Standard (SDDS) established by the International Monetary Fund, which contains stipulations regarding timeliness, quality and other aspects of data. For most data series, Hong Kong has already been able to meet the timeliness standard required. For the other items where the requirement is not yet met, we will be able to do so by the end of 1998. These stipulations by SDDS actually reflect the commonly achieved statistical standards of the more advanced economies and hence Hong Kong is not faring badly.

Below are some examples of the timing of release of official statistics. In line with SDDS, the unemployment rate is released within three weeks, the Consumer Price Indices in about three weeks, and the external trade statistics in about four weeks after the end of the reference periods. As regards the Gross Domestic Product, statistics for the second quarter of 1998 were released three and a half months after the end of the quarter. This was longer than the stipulations of SDDS. However, as from the third quarter of 1998, the statistics will be released within three months after the end of the quarter, thus meeting the SDDS stipulation.

As regards the timeframe for issue of economic forecast, the forecast for the current year is first released in early March along with the Budget speech. It is then updated on a quarterly basis having regard to the latest economic situation, and released at end-May, end-August and end-November along with the Government's quarterly economic report.

We will strive to improve the timeliness of statistics, within the resources available whilst not compromising the quality of data. In this regard, we have been exploring various ways to facilitate data provision and to promote co-operation with raw data suppliers. Up-to-date statistical methodology as well as information technology facilities also help to improve the timeliness of statistics.

Power Failure at the Lo Wu Control Point

15. MR YEUNG YIU-CHUNG (in Chinese): It is reported that in late August, a power failure occurred at the Lo Wu Control Point and the emergency generating system could not be activated at the time, rendering the computer system inoperative. Officers of the Immigration Department had to process immigration clearance manually, resulting in thousands of travellers being stranded at the Control Point for more than an hour. In this connection, will the Government inform this Council of:

(a) the causes of the power failure;

(b) the reasons why the emergency generating system at the Control Point could not be activated during the power failure;

(c) the number of incidents in which the emergency generating system could not be activated when a power failure occurred at the Control Point in each of the past five years, together with the number of travellers affected in each of these incidents; and

(d) the contingency measures in place to deal with the situation where a power failure occurs when there are many travellers waiting for immigration clearance at the Control Point?

SECRETARY FOR SECURITY (in Chinese): Madam President,

(a) The power failure incident in question occurred because a contractor who was carrying out construction work at Sheung Shui Slaughter House on that day, that is, 31 August, damaged two cables of China Light and Power Company Limited which supplied electricity to the Lo Wu terminal building.

(b) Though the emergency generator was started up after the power failure occurred, it failed to provide the back-up electricity supply to the terminal building because of a control fuse failure in the emergency supply auto-changeover switch. Simultaneously, a contractor in the Uninterrupted Power Supply circuit which supplied electricity to the Immigration Department's computer at the terminal was de-energized thus cutting off the power supply to the computer.

(c) There were two occasions on which the emergency generating system could not be activated when a power failure occurred at Lo Wu Control Point. They happened on 6 to 8 August 1994 and 31 August 1998 respectively. The former incident lasted for three days and affected 145 000 passengers, whereas the latter lasted for two hours and affected 28 000 passengers.

(d) There are back-up facilities at the Lo Wu terminal building to cater for interruption of power supply from the city mains. If an interruption occurs, the emergency generators installed in the terminal building will be activated automatically to support operation of the essential electrical installations including lighting, ventilation system and the Immigration Department's computer system. The Uninterrupted Power Supply system also serves as an additional back-up to the computer system. Maintenance of the emergency generators and the Uninterrupted Power Supply system is carried out on a regular basis. In the event of malfunction of these back-up facilities (as had happened on 31 August 1998), repair works will be carried out as a matter of urgency.

As regards immigration clearance, under the established contingency procedures, manual processing will be resorted to in the event of malfunctioning of the computer system caused by power outage. The Immigration Department will also contact the Kowloon-Canton Railway Corporation and the Shenzhen authorities, where needed, to regulate the passengers flow to avoid building up a mass of passengers in the terminal building. The police will also maintain crowd control at the scene if the situation so warrants.

Remuneration for Heads of Tertiary Institutions

16. MR CHEUNG MAN-KWONG (in Chinese): Regarding the terms of employment of heads of universities, will the Government inform this Council:

(a) whether it knows the current tenure of contracts, remuneration and other benefits of all heads of universities; if so, of the details;

(b) how the remuneration and other benefits of these heads of universities compare with those of directorate officers of the Government; and

(c) of those heads of universities whose remuneration has been delinked from that of the Chief Secretary for Administration; and those who have not and the reasons thereof; and of the measures the Administration has in place to implement such a delinking policy?

SECRETARY FOR EDUCATION AND MANPOWER (in Chinese): Madam President, in June 1997, the Finance Committee (FC) of the former Legislative Council approved the following salary scales for heads of the then seven institutions funded by the University Grants Committee:

Heads of Institution (HoI)	Previous salary scale^#	New salary scale^#
The Chinese University of Hong Kong (CUHK), The Hong Kong University of Science and Technology (HKUST) and the University of Hong Kong (HKU)	98% of the Chief Secretary for Administration's (CS's) salary	D8
City University of Hong Kong (CityU) and Hong Kong Polytechnic University (PolyU)	D7	D8
Hong Kong Baptist University (HKBU)	D6	D7
Lingnan College (LC)	D5	D6

Note^#: The salary points shown are the respective points in the Civil Service Directorate Pay Scale

The FC also agreed that the downward revision in salary should apply to new appointees but not the incumbents during the validity of their respective contracts.

(a) Public funds are used to remunerate HoIs at the approved salary scale. The following table sets out HoIs' salaries paid from public funds and the tenure of HoIs' contracts.

Institution	Current Contract Period	Approved Salary Scale	Institution Salary
City U	1 May 1996 to 30 April 2001	D8	$181,050
HKBU	1 July 1994 to 30 June 2001	D7	$175,600
LC	1 September 1995 to 31 August 2000	D6	$162,650
CUHK	1 August 1996 to 31 July 2005	98% of CS's salary	$212,317
HKIEd	1 October 1997 to 30 September 2000	D6	$162,650
PolyU	1 January 1995 to 31 December 1998 (contract renewed for another term of six years from 1 January 1999)	D8	$181,050
HKUST	14 September 1998 to 13 September 2003	D8	$181,050
HKU	14 March 1996 to 13 March 2002	98% of CS's salary	$212,317

All the HoIs are on contract terms and are entitled to gratuity payments, which range from 15% to 25% of salary, payable by instalments or on completion of their respective contracts. The HoIs are also provided with residential accommodation and they are required to pay rent at 7.5% of their salary to the institutions.

(b) The publicly-funded remuneration packages of HoIs are broadly comparable to those of grades with similar level of responsibilities in the Civil Service. It is also on this basis that the new salary scale mentioned above was recommended and approved.

(c) Under the new approved salary scale, HoIs' salaries are delinked from the CS's salary. However, in line with the principles approved by the FC, two HoIs continue to receive salaries payable from public funds at 98% of the CS's salary during the validity of their current contracts. The new scale will apply to new appointees or incumbent heads on renewal of their contracts.

Investment of the Land Fund

17. MISS EMILY LAU (in Chinese): Regarding the investment and management activities of the Land Fund, will the executive authorities inform this Council:

(a) of the current net asset value of the Land Fund and the details of its investments;

(b) of the principles on which the Financial Secretary bases his investment decisions in respect of the Land Fund's assets; and

(c) whether the funds of the Land Fund have been used to purchase stocks for the purpose of supporting the pegged exchange rate; if so, whether such moves are investment activities?

SECRETARY FOR FINANCIAL SERVICES (in Chinese): Madam President,

(a) As at the end of June 1998, the net assets of the Land Fund totalled HK$201.5 billion. The schedule of investments as at 30 June 1998 is set out in the Appendix. This schedule is published in the Gazette on a quarterly basis at around one and a half months after the respective quarter end date. The net asset value as at end-September 1998 is expected to be published in mid-November 1998.

(b) The investment objectives of the Land Fund are to preserve capital and to maximize investment returns over a long-term horizon without disturbing the stability of the financial system of Hong Kong. The Financial Secretary also receives advice from the Land Fund Advisory Committee on the investment strategy of the Land Fund. As mentioned in the Budget speech on 18 February, we are aiming to align the investment policy of the Land Fund with that of the Exchange Fund in the course of this financial year, and work on that is in hand.

(c) The Land Fund is managed as a separate portfolio from the Exchange Fund. It has not been used to buy shares for the purpose of supporting the linked exchange rate.

Appendix

LAND FUND SCHEDULE OF INVESTMENTS

AS AT 30 JUNE 1998

Investment Types	Currency in which investments are denominated
	Investments denominated in HK$	Investments denominated in US$	Investments denominated in other currencies	Total	Asset
	$'000	$'000	$'000	$'000	Allocation
Equities (Listed)	11,731,266	9,427,981	11,663,315	32,822,562	16.3%
Equities (Unlisted)	-	16,272	-	16,272	-
Bonds	5,275,020	46,379,999	29,573,047	81,228,066	40.3%
Certificates of Deposit	4,181,544	5,191,224	-	9,372,768	4.7%
Cash, Deposits and Short Term Fund	34,892,298	42,520,100	136,332	77,548,730	38.5%
Outstanding Forward Foreign Exchange Contracts	(18,647)	27,330,224	(27,462,589)	(151,012)	- 0.1%
Accruals and Other Net Assets	1,088,298	332,947	(764,658)	656,587	0.3%
Total	57,149,779	131,198,747	13,145,447	201,493,973
Currency Allocation	28.4%	65.1%	6.5%		100.0%

Healthy Development of Domestic Gas Fuels Market

18. MR LAU CHIN-SHEK (in Chinese): Regarding the Government's effort to examine the use of natural gas as an alternative to towngas so as to promote the healthy development of the market for domestic gas fuels, will the Government inform this Council:

(a) how Hong Kong can secure a reliable supply of natural gas from suitable sources;

(b) of the estimated timing for the introduction of natural gas as an alternative domestic gas fuel into the territory;

(c) whether the Hong Kong and China Gas Company Limited has accepted the Government's proposal to establish a new accounting framework in order that a breakdown of gas transportation costs can be provided in the company's accounts; and

(d) whether it has considered other measures, such as by encouraging the healthy competition between liquefied petroleum gas (LPG) and towngas or through legislation, in order to regulate the tariff for the use of towngas?

SECRETARY FOR ECONOMIC SERVICES (in Chinese): Madam President,

(a) In June 1998, the Government issued a statement of its position on the "Feasibility Study on Introducing a Common Carrier System for Gas Supply in Hong Kong". The statement said, among other things, that, in the absence of an available supply of natural gas from a nearby gas field, supply from a liquefied natural gas terminal in the Mainland offers the best prospect for a long-term and reliable supply of natural gas for Hong Kong.

In Hong Kong, the responsibility for energy and fuel supply rests with the private sector. The Government will facilitate where possible efforts by the private sector to obtain suitable sources of natural gas for use in Hong Kong as a potential replacement for towngas.

(b) The timing of any introduction of natural gas cannot be estimated until the private sector has taken a view that investment in such a project is economically viable and firm proposals have been submitted to and considered by the Government.

(c) The Hong Kong and China Gas Company Limited has accepted the Government's proposal to establish an accounting framework to identify the costs of gas transportation. Discussions between the two parties are in progress. It is expected that the task will be completed by mid-1999.

(d) The Government's statement on the feasibility of introducing a common carrier system for gas supply also addressed the question of competition between LPG and towngas. The statement said that, in the interests of promoting further competition between LPG and towngas, the Director of Electrical and Mechanical Services has issued a guidance note on the technical and safety requirements for the laying of LPG pipes under public roads (which is restricted for safety reasons). The guidance note and information on the Government's policy on gas supply have been distributed to the Housing Authority, the Real Estate Developers Association and the Hong Kong Institute of Architects, with the intention of assisting developers and architects to be well informed about piped LPG as an alternative to towngas.

The Government does not intend to introduce legislation to regulate towngas tariffs. We are satisfied that the Hong Kong and China Gas Company is operating in competition with LPG and electricity suppliers. There is no evidence that the company is abusing its market position. It has been responsive to requests for greater transparency over the justification for tariff increases and is co-operating with our examination of the feasibility of introducing a common carrier system for gas supply. The present situation does not call for government regulation of towngas tariffs.

Implementation of Environmental Protection Policies within Government Departments

19. MR MA FUNG-KWOK (in Chinese): With regard to the implementation of environmental protection policies within government departments, including the adoption of ISO 14000 environmental management standards set by the International Organization for Standardization, as well as the acquisition of relevant certification, will the Government inform this Council:

(a) of the current progress made by various government departments in implementing environmental protection policies;

(b) whether government departments aim at achieving the ISO 14000 environmental management standards in the implementation of environmental protection policies; and

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Chinese): Madam President, it is not government policy that all government departments should acquire ISO 14000 certification. Government policy and practice has, however, been developing positively in recent years.

In 1994, the Green Manager Scheme was introduced, whereby a Green Manager was appointed in each bureau and department to be responsible for its environmental performance. Initially, the Green Managers focused on simple green housekeeping measures such as reducing electricity and paper consumption. In the past two years green managers have been encouraged to go beyond simple green housekeeping by the provision of training courses on environmental auditing (EA) and environmental management systems (EMS). In 1997 the Environmental Protection Department published a guidebook on implementing EMS by government departments based on the ISO 14000 principles. Moreover, an instructional video on EA was distributed to government departments in August 1998.

A number of departments which have a significant impact on other departments and the community-at-large, for example, the Architectural Services Department, Housing Department and Environmental Protection Department, have been in the forefront adopting high environmental standards. So far the Architectural Services Department has obtained ISO 14000 certification whilst 16 bureaux and departments have conducted EAs and seven have set up working groups to develop EMSs.

To encourage departments to review and improve their environmental performance, with effect from 1999-2000 all Controlling Officers will be required to publish annual reports on their environmental policies and actions. There is a great deal of diversity among different bureaux and departments and this will be reflected in the reports. Controlling Officers are encouraged to take this opportunity to demonstrate both their environmental initiatives and their commitment to working for a cleaner, healthier future.

Imported Vegetables Contaminated with Heavy Metal or Pesticide

20. MRS SOPHIE LEUNG: Regarding the protection of the public from consuming imported vegetables contaminated with heavy metal or pesticide, will the Government inform this Council:

(a) of the details of the current screening tests conducted on imported vegetables, including frequency and types of tests;

(b) of the effectiveness of these tests in identifying heavy metal or pesticide;

(d) of the measures taken by the relevant authorities to build up consumer confidence in imported vegetables and to increase consumers' awareness of food safety; and

(e) whether discussions will be held with the relevant mainland authorities to promote the awareness of good agricultural practices among mainland farmers supplying vegetables to Hong Kong?

SECRETARY FOR HEALTH AND WELFARE: Madam President,

(a) For the purpose of food safety control on imported vegetables, the Department of Health (DH) takes samples from imported vegetable consignments to check for pesticides and heavy metal contamination at both the border and retail levels.

Screening test (also referred to as quick test) is available for the detection of pesticides on vegetables. It is a simple 30-minute on-the-spot test which is done on randomly selected vegetable samples. This type of test is considered suitable for application in busy operations like the border.

However, under current technology, no screening test is available for the detection of heavy metals on vegetables. Confirmatory tests, which are more time-consuming, are being done instead.

In general, the DH takes samples for screening tests for pesticides from 50% of the vegetable vehicles passing through Man Kam Road. Between 1 January and 20 October 1998, we conducted 32 731 screening tests for pesticide contamination on imported vegetables.

(b) The screening test currently used for the detection of pesticides on vegetables is widely used internationally and is in line with practices of overseas food safety control authorities. The confirmatory tests currently used for the detection of heavy metal on vegetables are state-of-the-art scientific tools.

(c) In the past 12 months, the monthly quantity of imported vegetables inspected by the DH and found unsuitable for consumption were as follows:

	Tonnes
October 1997	3
November 1997	2
December 1997	10
January 1998	13
February 1998	16
March 1998	10
April 1998	15
May 1998	18
June 1998	13
July 1998	16
August 1998	6
September 1998	7
Total	129

For reference, the total quantity of imported vegetables inspected by the DH and found unsuitable for consumption in 1996 and 1997 was 403 and 202 tonnes respectively. The figures show a declining trend.

(d) To build up public confidence in imported vegetables, the DH and the mainland authorities have been collaborating to control contamination at farm level, co-ordinating inspections at the border and strengthening communications in source tracing when contamination occurs. Suspected cases of food poisoning due to pesticide contaminated vegetables are promptly investigated so that control work can be done at source and recurrence prevented.

To increase the community's awareness of food safety, advice on how to choose and prepare vegetables are disseminated to food handlers and the public on a regular basis using various publicity means, for example, press release, pamphlets and posters.

(e) The DH holds regular meetings with the relevant mainland authorities. Frequent operational contacts are also made. All along, the importance of farmers' understanding and adoption of good agricultural practices have been emphasized.

BILLS

First Reading of Bills

PRESIDENT (in Cantonese): Bills: First Reading.

INTRODUCTION OF THE EURO BILL

IMMIGRATION (AMENDMENT) (NO. 2) BILL 1998

CLERK (in Cantonese):	Introduction of the Euro Bill
	Immigration (Amendment) (No. 2) Bill 1998

Bills read the First time and ordered to be set down for Second Reading pursuant to Rule 53(3) of the Rules of Procedure.

Second Reading of Bills

PRESIDENT (in Cantonese): Bill: Second Reading. Secretary for Financial Services.

INTRODUCTION OF THE EURO BILL

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Madam President, I move the Second Reading of the Introduction of the Euro Bill. This Bill deals with the replacement of the European Currency Unit (ECU) by the Euro and is intended to remove doubts about the overall continuity of legal obligations as a result of the introduction of the Euro. The Euro will be introduced on 1 January 1999 to replace the national currencies of the 11 participating member states of the European Union. As stipulated in the European Council Regulation No. 1103(97), the introduction of the Euro will not result in any change in the provision of any legal instrument, nor will it have the effect of discharging or excusing any performance required under the obligations stipulated in a legal instrument, or giving any party the right to alter or terminate the legal instrument unilaterally. The Rule also provides that as of 1 January 1999, a reference in a legal instrument to the ECU shall be deemed to be a reference to the Euro at a rate of one Euro to one ECU.

The question of the continuity of legal obligations in relation to the Euro has also aroused the concern of other financial centres. On 29 July 1997, the New York State of the United States enacted legislation which expressly deals with the conversion from the ECU to the Euro and the question of the continuity of legal obligations, similar to the relevant provisions in the European Council Regulations. That legislation has the effect of removing doubts about the enforceability of obligations or contracts which refer to the ECU or the currencies replaced as a result of the introduction of the Euro.

As in other common law jurisdictions, the law of currency (lex monetae principle) applies in Hong Kong.　In other words, the definition of a foreign currency referred to in contractual obligations governed by Hong Kong laws will be determined by the laws of that foreign country. According to this principle, a contract governed by Hong Kong laws providing for payment in a currency which has been replaced by the Euro should continue to be enforceable, since the payment must then be made in Euro at the exchange rate set down by the European Council. However, we still think it best to enact specific legislation to remove some doubts. For instance, there is some concern that the parties to a contract might argue that the introduction of the Euro has changed the circumstances completely and has the effect of terminating the legal obligations. As an international financial centre and an important foreign exchange centre, Hong Kong needs to legislate to remove all doubts in this respect.

We have consulted the banking sector on this Bill. The banks consulted all expressed their concern about the continuity of legal obligations. With regard to huge transactions with clients or with banks in ECU deposits and loans, they are especially concerned whether the lender might refuse to repay with the excuse that the contract is unenforceable. They also expressed support for enacting specific legislation in Hong Kong to provide for matters regarding the continued effectiveness of legal obligations after the introduction of the Euro. The Hong Kong Capital Market Association and the Law Society of Hong Kong also support this Bill.

Modelled on regulations of the European Union and legislation of the New York State, the main clauses of this Bill provide for the exchange rate of one Euro to one ECU and that unless otherwise expressly agreed or provided, the introduction of the Euro and the changes consequential upon it shall not have the effect of discharging or excusing any performance required under a legal obligation. In case of any future change in currency, the new law shall not affect the operation of the law relating to the validity or enforceability of a legal obligation, such as the application of the law of currency. Both the Government and the banking sector consider that this law should best be implemented before 1 January 1999. Thank you, Madam President.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Introduction of the Euro Bill be read the Second time.

In accordance with Rule 54(4) of the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

PRESIDENT (in Cantonese): Secretary for Security.

IMMIGRATION (AMENDMENT) (NO. 2) BILL 1998

SECRETARY FOR SECURITY (in Cantonese): Madam President, I move the Second Reading of the Immigration (Amendment) (No. 2) Bill 1998. The aim of the Bill is to enhance the ability of the Administration in combating illegal labour at construction sites and add travel pass and APEC business travel card to the provisions relating to offences under the Immigration Ordinance.

Under section 17I of the Immigration Ordinance, it is an offence to be employer of a person who is not lawfully employable. It is however difficult to identify an employer of illegal labour and prosecute him under the said section because divided contracting practice used in the construction industry often gives rise to numerous employers at a construction site. For this reason, the Administration introduced the existing section 38A in 1990 to hold construction site controllers responsible for illegal labour at the site.

After the implementation of section 38A, the number of illegal immigrants caught at construction sites diminished dramatically. The number of holders of two-way exit permits arrested however increased from 42 in 1991 to 975 in the first eight months of 1998. During these eight months, other than prostitutes, half of the two-way exit permit holders caught in illegal employment at various workplaces were caught at construction sites. This is a an enormous increase compared with the 29% in 1996.

The change in status of illegal labour at construction sites has shown that section 38A can effectively combat illegal labour at construction sites. But at the same time, it shows the inadequacy of existing law in deterring other categories of illegal labour employed at construction sites. To eliminate this loophole, the Administration proposes including other categories of illegal labour in section 38A. The Bill will add provisions to make it an offence for construction site controllers if they allow persons not lawfully employable who have violated their conditions of stay to take up employment at construction sites. The fine is $350,000. It is a defence in proceedings for an offence under this section for the construction site controller charged to prove that he has taken all practicable steps to prevent persons who are not lawfully employable from taking up employment at the construction site.

Under the Bill, a construction site controller will not be liable legally purely because a not lawfully employable person other than an illegal immigrant such as the holder of a two-way exit permit is found on the site. Only when the relevant person is found to have taken employment on the site will the construction site controller be held liable. I must point out specifically that under the definitions of the existing legislation, a construction site controller means a principal or main contractor and includes a subcontractor, owner, occupier or other person who has control over or is in charge of a construction site. We will continue to use the same definition to enable the Administration to prosecute subcontractors or small contractors who employ illegal labour.

Another part of the Bill deals with the travel pass and APEC business travel card. The Immigration (Amendment) (No. 2) Regulations, which was 1997 enacted last year, authorized the Director of Immigration to issue these two new documents, which were subsequently launched in 1998. Although we have so far encountered no problems of forgery or false statement, we must enact laws to provide for such offences. Section 42 of the Immigration Ordinance has provisions covering false statements, forgery of documents and use and possession of forged documents, including travel documents and entry permits. To extend the scope of the offence to include the said travel pass and APEC business travel card, the Bill adds these documents to section 42.

The Bill is not complicated in content and policy neutral. The Hong Kong Police Force and the Immigration Department are prepared for the law enforcement and prosecution work necessitated by the introduction of the Bill. To enhance our ability in combating illegal labour on construction sites, I hope this Council can pass the Bill as soon as possible.

Madam President, I beg to move.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Immigration (Amendment) (No. 2) Bill 1998 be read the Second time.

In accordance with Rule 54(4) of the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

MEMBERS' MOTION

PRESIDENT (in Cantonese): Members' motion. Motion of Thanks.

MOTION OF THANKS

Continuation of debate on motion which was moved on 21 October 1998

PRESIDENT (in Cantonese): Council will now continue to debate the motion and its amendments. Mr Gary CHENG.

MR GARY CHENG (in Cantonese): Madam President, during the past year, Hong Kong was indeed in troubled times: the avian flu scare, the assault by international speculators on Hong Kong's linked exchange rate, frequent medical blunders, the high unemployment rate, the new airport fiasco marring its opening and so on. All this has posted a severe challenge to the drafting of this year's policy address. The theme of the policy address delivered the Chief Executive of the Special Administrative Region (SAR) is "From Adversity to Opportunity". In the policy address, there are rather long-term plans for improving Hong Kong's economy. To name but a few, the Government will increase investment in high technology to spur Hong Kong's economic development, give support to small and medium enterprises and promote Chinese medicine, tourism, manufacturing industries and so on. The Democratic Alliance for the Betterment of Hong Kong (DAB) opines that the overall direction of the long-term economic strategies contained in the policy address is on the right track and we are in support of it.

However, the policy address seems to be helpless in relieving people's plight, particularly, in tackling the high unemployment rate of Hong Kong. Moreover, the series of natural and man-made disasters in the past year have proved that the Government lacks crisis anticipation and contingency planning. As a result, public confidence in the SAR Government is dented. But there is only brief mention in the policy address about such an important issue. We are discontented with that.

On the whole, as said by my colleagues earlier, the DAB has the following comments on the policy address: though the Government is willing to save the economy, it lacks the strength to help people overcome their adversities and the people's confidence has yet to be restored.

Here I would like to say a few more words on the restoration of confidence. In his policy address, the Chief Executive said that the recovery of our economy hinged on four factors: an improvement in the external economic environment; a steadying of interest rates; stabilization of property prices; and the restoration of public confidence. He also appealed to the public to pool their wisdom and efforts together so as to change adversity to opportunity. In order to achieve this, the Chief Executive and the SAR Government must demonstrate to the public that it is adopting a new approach towards the new situation and illustrate their unprecedented leadership. This is not only a question of reviving the economy, but also a new direction for Hong Kong's development in future. While the Government has to adopt a new direction, the public has to change their mentality as well. We can pool our wisdom and efforts together only when these two factors are combined. If we only talk about the property market or interest rates, do we mean that when property prices are stabilized, interest rates lowered and the external environment normalized, Hong Kong can then resume normal? Does it mean that we want to go back to the old days when we created bubbles and that Hong Kong will continue to rely on speculation and property development as a way of survival? Apart from making a clear commitment to investment in high technology and industrial development in the policy address, should the Government do something more to bring about changes to mentality, structure and macro-social strategies in Hong Kong so that we are prepared for the future?

Hong Kong people, including government officials and departments, might have been accustomed to keeping their heads in the clouds for too long in the past, thinking that wealth would fly in. Now when the financial turmoil hits us, every one of us falls from height and has to plant our feet on solid ground again. We have been used to leading a luxurious life and spending generously as everything comes so easily. But now we have to strenuously look to others for help; we have to promote and give publicity to Hong Kong; and we have to develop our industries. If the Government from top down to the general public at the bottom are not prepared to face up to the reality, and if they still harbour any illusion, keeping their heads in the clouds, we will suffer losses sooner or later. The policy address has come up short of an in-depth review or a more significant warning of the situation. We find this a serious inadequacy of the policy address.

In my opinion, there are many criteria against which we can gauge a leader. But basically there are three points: the leader must be able to perceive crises; secondly, he must be able to lead the way forward; and thirdly, he must have popular support. If a leader cannot perceive crises, then he cannot make an accurate analysis of the situation. Then he can neither point the right way forward nor enjoy popular support.

No leader in the world needs not face crises. A true leader is one who can face them. Mr TUNG Chee-hwa may need the test of time in order to show whether or not he is a good leader. Among the comments in the past, there have been some which deliberately belittled Mr TUNG, saying that he did not worth a dime. Except with the aim of highlighting their comments and their image as an opposition party, these criticisms are not true to the facts. These comments are of little help to resolving crises and overly emotional. In my opinion, if we talk about crises, Mr TUNG did foresee crises. In 1996 when he ran for election for the office of the Chief Executive and in 1997 when he swore in for office after the return of Hong Kong, he reiterated that under the circumstances at that time, Hong Kong people should be aware of adversity though we were in time of prosperity. To our recollection, is he erroneous? But it seems to me that no one would like to mention or pay attention to it any more. In fact, at a time when everyone was enjoying the boom and keen on speculation in the market, so-called serving rice with shark's fin soup, who would have thought of adversity then? As long as the game of musical chairs of speculation in the domestic markets does not come to an end, no one cares whether the economy is a bubble or not. That was the mentality of the public. Was it not the mentality of the officials? Crisis? Tell me only when it comes! Now, the bubble has burst and everybody is caught in the crisis. But it seems that TUNG Chee-hwa is the only one who should be held responsible. If the people of Hong Kong and government officials fail to learn a lesson from this bitter experience, they would soon forget about it and be reluctant to strengthen themselves, how can they face the future? How can they face the reality? Why did the excellent idea of preparing for adversity in time of prosperity fail to become the thrust of government policies and the direction of a new Hong Kong after its return to China? So, if I am asked to point out the major defect of the policy address, I think this is it.

Members of the DAB are, of course, fully aware of our duties as Legislative Council Members. One of the very important tasks is to monitor the Government's operation and formulation of policies. But what does monitoring mean? Monitoring includes as a matter of course criticizing the Government for its errors and faults and tracking down accountability. But this is not and should not be the entirety of monitoring. It should also include supervision with a positive attitude. We must ensure that the Government is implementing the right policies without any error, or procrastination, without shoddy work, or beating about the bush. This is a facet of monitoring, a more important facet of it. On the contrary, monitoring should exclude hurling of invectives. In a previous speech going before mine, a colleague said that the policy address should be given a zero score. That is easy to do. But that does not mean that they are accountable to the public by doing so. If he gives a zero score to the policy address, is he proclaiming that in the coming year, the party concerned will not accept or affirm anything in relation to the government policies? Or does it mean that the government policies have nothing to do with them in the year to come?

Members of the DAB do not want to adopt a simplistic approach of affirming or negating everything. This is simply not our style nor our way of dealing with matters. When we criticize the governance' for its faults and errors, we will also affirm those measures which are apparently sound and helpful in reviving Hong Kong's economy and alleviating the hardship of the general public.

Madam President, everyone in this Chamber is very clear about the original meaning behind today's motion. The whole content of the original motion is simply to demonstrate our thankfulness. We all know that this does not necessarily mean that we have to give full support to the contents of the policy address. Nor does it mean that dissenting views are not allowed. If Members do not intend to give the policy address a zero score, and if Members think that there is still something in the policy address worthy of our discussion, then, with the exception of the Dr the Honourable TANG Siu-tong, all of them should have spoken their minds freely well before me. If we really have to amend the Motion of Thanks in this way, we could probably have 58 amendments ─ sorry, Madam President, you are out of it. So, the DAB Members will not consider any of these amendments. Instead, we will support the original motion of Dr LEONG Che-hung.

Madam President, as predicted by the media, the debates in these few days will end up achieving nothing. The DAB will not only affirm various meritorious parts of the policy address, but would also like to take this opportunity on behalf of our voters to remind and encourage the Chief Executive, government officials and civil servants of all ranks who are here or not here. Even if the motion is not carried, this does not mean that the policy address can be shelved and we can call it a day. In fact, some members of the public do think that if the motion is not carried, the policy address will not be adopted. May I urge the government officials and the Government itself to take concrete actions and try their very best to put the policies into action so as to alleviate the people's hardship, proving to us that the policies are correct. We will continue as before with our duties of monitoring all of you and Mr TUNG.

I so submit.

PRESIDENT (in Cantonese): Dr TANG Siu-tong.

DR TANG SIU-TONG (in Cantonese): Madam President, I owe my thanks to the Honourable Gary CHENG of the Democratic Alliance for the Betterment of Hong Kong (DAB) for pointing out at the last meeting there was no quorum upon which the meeting was adjourned. That gave me the last opportunity to say a few words on the Motion of Thanks.

Today I return to the Legislative Council, having unpredentedly taken the Legislative Council oath twice during the same Session. The by-election for a seat for the Regional Council in the functional constituency did not arise out of my fault. But losses were caused to me and my supporters, mentally and financially, and in terms of time. A large sum of public money was also expended. This was unfair to us. Therefore, I do hope the Registration and Electoral Office and the Department of Justice can reflect upon the matter and examine the mistake. I do not want to antagonize the Secretary for Justice but I want someone to examine the mistake.

Madam President, the past year saw a number of mishaps in the medical sector. A number of unfortunate events happened, in hospitals and clinics. Our level of medical service compares favourably with other advanced countries but the medical policy of Hong Kong has been lacking behind many other places. In fact, the last four policy addresses have mentioned the goal of conducting a comprehensive review on the medical system in Hong Kong, but the result has remained the same throughout the years ─ there is no result at all.

Medical expenses have always been high. The medical system, especially the charging system, is complicated. In the past the Government has been insisting on providing public medical services in accordance with the "low charges, high subsidies" principle. Medical services in Hong Kong are supplied without limit. If a patient has the need and takes the trouble to queue, the Government will be obliged to provide the service almost at no cost to the patient. Treatment is given to whoever comes along. This has not only made the Government shoulder 97% of the public medical expenses, but also given rise to a serious imbalance between the private and public medical systems. Hong Kong could absorb the heavy burden in the past when the economy was booming and the Government had huge surpluses. But can it continue its benevolence with an estimated deficit of a high $50 billion?

As medical expenses keep on increasing, Madam President, the Government cannot practically increase medical resources without limit. I think it is high time we conducted a thorough review of the medical system in Hong Kong. The review should stick to the principle whereby a suitable ratio of share should be struck between the Government and the people, the poor is provided with the necessary medical treatment, and the guaranteed freedom of choice for the patient. The Government should consider the policy under which those who have the means should pay more for better services without cutting the subsidy for medical services for the poor.

I am glad to see that the Government of the Hong Kong Special Administrative Region (SAR) still commits to trying its best to improve medical and health services despite the economic downturn. But I think the insistence of the Government on scrapping the two Municipal Councils is a setback for municipal and public health services provision.

Madam President, I have doubts about the abolition of the two Municipal Councils and replacing them with a centralized authority, and the emphasis on efficiency and cost-effectiveness as two key elements to improving food safety and environmental hygiene. My arguments in support of retaining the two Municipal Councils and the need for a division of labour, as well as those on the many problems that may arise if the Government deals with municipal and sanitation matters alone without any democratic monitoring were expounded during the debate on review of district organizations on 29 July in this Council. I do not intend to repeat them here today.

But I have to stress that no work affects people's livelihood more directly than work on food safety and environmental hygiene. It involves not just consideration about management and finance. More important are a sense of participation by everyone to better municipal services, and a proper mechanism to implement policies. The two Municipal Councils have been doing its duty well in encouraging participation in municipal services by the people. The Urban Council was even a forerunner in the democratization of Hong Kong. So, a retention of the two Municipal Councils, two representative bodies of executive authority which are prepared to be monitored by the people and to monitor the Government, will be conducive to the fostering or even enhancement of the public's ability and sense of participation in improving municipal services.

Unfortunately, for the sake of administrative convenience, the Government has refused to extend the period of consultation and insisted on scrapping the two Municipal Councils. I feel sorry for all this.

The Constitutional Affairs Bureau released a Consultation Report on Review of District Organisations in October, stating that the 4 940 submissions represented a clear social message to the Government: the community wants improvements in food safety and environmental hygiene. We all agree with this and we support this. But the Government has been biased in making a decision about the abolition of the two Municipal Councils. Some obvious inconsistencies are:

First, in the Report the Government repeatedly said views were divided in the future development of the two Municipal Councils. If that is the case I do not understand why the Government came to the conclusion that better efficiency and cost-effectiveness could be achieved under a new framework devoid of the two Municipal Councils;

Second, the Government employed an oversimplified dichotomy in its interpretation of the submissions, concluding that public support for the Government to assume direct responsibility for food safety and environmental hygiene means support for abolition of the two Municipal Councils. It has ignored the fact that between the two extremes, there are possibilities for other arrangements;

Third, in terms of quantity, over 70% of the submissions supported retaining the two Municipal Councils. Although the Government indicated it had placed equal emphasis on the quality and quantity of the submissions, it failed to offer any standards against which it had measured the submissions. It did not explain why it had accepted the idea of having the Government assume responsibility for food safety and environmental hygiene but not the majority idea of the retaining the two Municipal Councils.

In fact, the survey results of the Government itself show 44% of the interviewees chose the option to merge the two Municipal Councils into one council and retain the 18 District Boards, while 18% of them the option to retain the existing structure but (may) improve the co-ordination between the two Municipal Councils. In other words, be there two councils or one, most agreed retaining the Municipal Councils as a district structure. Unfortunately, the Government interpreted the majority view as "divided".

Madam President, I hope the Government can give due regard to facts and shelf the decision of not to retain the two Provisional Municipal Councils. I hope it can extend the term of office of the Councils so as to allow ample time for all sectors across the community to hold rational discussions and reach a consensus before dealing with the reorganization of the district organizations.

Madam President, I so submit.

PRESIDENT (in Cantonese): I now invite Dr LEONG Che-hung to speak on the three amendments. Dr LEONG Che-hung.

DR LEONG CHE-HUNG: Madam President, I rise to speak against all the amendments laid on the table today. Let me state clearly that I will not speak against the wording or the contents of these amendments, but rather the impropriety of moving them.

I will not speak against the wording or the content for two reasons. Firstly, it is not my job to defend the policy address or the positions of the Government. I am simply moving a motion on behalf of the House to trigger off a debate on the policy address, this being a constitutional function of this Council. Defending the policy address will be the responsibility of the Administration. They will, no doubt, speak on this later with eloquence.

Secondly, the wording of the amendments and much of the contents are well intended. The feelings of the Honourable LEE Cheuk-yan, the Honourable Miss Christine LOH and the Honourable Martin LEE have actually been expressed in different degrees and proportions by most other Honourable Members in their speeches. I, for one, have actually spoken much more critically on these issues than any of the three Honourable colleagues. In short, there is no lack of free flow of criticisms of different areas of this policy address in Members' speeches in the debate.

Perhaps, Madam President, it is for the same reasons that I am speaking on the impropriety of the amendments. As I have stated in my opening remarks, the Motion of Thanks is a tradition of the Council. Its aim is to trigger off a debate, to trigger off in a non-directional way so that each and every Member of this Council can acknowledge, praise, comment, criticize, denigrate, or even cut it into pieces if he likes ─ and all Members have done so. Any amendment, in my mind, would add a direction to a non-directional debate. Members will then have to speak on or against these amendments restricting, at least in part, to a free cerebral flow so vital in their representativeness of Hong Kong people and so essential to the Administration ─ if this Council's function is taken with any degree of respect.

Madam President, not too long ago, a group of us ─ my friends and I ─ were invited to a dinner. The food was terrible, one guest actually swallowed a fish bone and landed in a hospital for removing that piece of bone. When we left, not without a lot of grumble, we thanked our host. We said "Thank you", and not "Thank you but ......". On another occasion, we were taken to an expensive dinner ─ shark's fin, abalone, bear palm, deer horn and the type, many grumbled that the host was deliberately "poisoning" us with all these high cholesterol food. Again, we all left and thanked the host. Madam President, this is what in my mind the motion in front of us is all about.

Madam President, I started by saying that I would not comment on the wording or the contents of the amendments. Yet, I cannot let today past without expressing my views on my Honourable friend, Mr Martin LEE's amendment and his speech.

In his usual eloquence and commitment, Mr LEE has stressed the importance of democracy and universal suffrage, and has implied that the lack of it is the source of all evils. Most, Madam President, I would agree with. Yet, I feel that Mr LEE has not gone far enough. Yes, universal suffrage for this Council and the Chief Executive is essential. Yet, these alone without a total constitutional revamp of the different tiers of government will not bring Hong Kong effectively into the next millennium. The colonial legacy must be looked at, now that we are masters of our own house. I hope that Mr LEE and his party will add this to their agenda when pushing for a better Hong Kong.

Madam President, Mr Martin LEE, in addressing his amendment, mentioned that I am old-fashioned, backward in objecting to moving amendments to the Motion of Thanks. Let me remind Mr LEE that old-fashionedness should not be taken as synonymous with inefficiency and inappropriateness. Change for improvement if one must, yet change should never be for the sake of change alone or because it is old-fashioned. After all, democracy and human rights have been an age-old issue and we are still fighting for them.

Finally, Madam President, Mr LEE has also accused me of not being attentive to his speech. (Laughter) If that is how I was portrayed, I sincerely apologize. Since that moment, I have been searching books on "sleepiness". (Laughter) There are three main reasons for an individual to become sleepy when someone is talking to him. Firstly, if you have a heavy meal before. I searched my soul and am convinced that I did not even have lunch that day because I have to prepare moving the Motion of Thanks.

Secondly, it may well be a sickness. My learned friend Mr LEE would have read Pickwick Papers by Charles DICKENS, where there is a character ─ a very fat boy ─ who regularly falls asleep. It is actually an endocrine disorder and the medical profession has coined it a "Pickwickian Syndrome". Madam President, I do not think I have that. (Laughter)

Finally, it is a well-known fact that one will be unavoidable to keep awake in an interesting lecture. (Laughter) Mr LEE would know that it is customary in the Western world for kids to ask their parents to tell them bed-time stories to lure them to sleep. This always works every night, and the story is invariably Little Red Riding Hood.

Madam President, I object to all the amendments and appeal to all Honourable Members to do the same. Thank you.

PRESIDENT (in Cantonese): Financial Secretary.

FINANCIAL SECRETARY (in Cantonese): Madam President, a range of views have been expressed on the policy address which the Chief Executive announced in this Council last month. Honourable Members have debated on the address at great length. The Administration is grateful to all for the concern they have shown for the policy address.

This is the second policy address by the Chief Executive. Let me stress that the formulation of the policy address is not a routine matter year after year. Nor is it some empty talk which leads us nowhere. It is the most important and serious task of the Government of the Special Administrative Region (SAR) on its annual agenda. The policy address gives an account of the Administration of the SAR and sets out our plans for the future. Under Article 64 of the Basic Law which deals with accountability to the legislature, the SAR Government should present regular policy addresses to this Council. This also underlines the importance of the policy address to the SAR.

The first and foremost principle in formulating the policy address is to assess accurately Hong Kong's present situation and its future needs so that the most appropriate macro policies can be worked out within the availability of resources. The policy address reflects the Chief Executive's thinking in governing Hong Kong and his ideas about our future development. It also embodies the policy objectives and future directions for each and every Policy Bureau. The policy address is produced after a long but extremely careful process, starting from the deliberations on resource allocation in May and June each year. Under the leadership of the Chief Secretary for Administration and in consultation with the Secretaries of Bureaux, consensus is reached on the overall allocation of resources after careful consideration. With a view to meeting the Chief Executive's undertakings and vision for our future, we will decide on the priorities in public expenditure for the coming year. It is only after that will the drafting of the policy address start. So it is in fact a collective effort and is an expression of the team spirit in the Civil Service. It also signifies our total support for and commitment to the Chief Executive's vision. The policy address can therefore be said to be the collective view of the Administration on how to lead Hong Kong into the future. We are all gratified for the support from Honourable Members and the public for the policy address. For everyone of us who have been involved in the formulation of the policy address, we are equally mindful of the criticisms from Honourable Members and the public on the contents of the policy address, whether these criticisms are fair or not.

Let me now turn to a few points on our economy raised by Honourable Members.

A review of the economic situation

I of course share Members' concern about the economic situation. We have discussed this matter often in this very Chamber, and in other fora, since the beginning of the year. I have pointed out in previous debates in this Council and in meetings of the Financial Affairs Panel that the financial crisis has hit our economy hard. We are going through a prolonged and painful, but necessary adjustment. Over the past 12 months or so, we have witnessed major blows brought about by the adjustment which in many ways are unprecedented in Asia's development. The extent and severity of the ensuing economic fallout has been considerably worse than anyone's initial expectations.

The Government has faced criticism about its economic forecasts. Some have said that we have been complacent, myopic, unable to keep track on development and inaccurate in our forecasts. We estimate that the Gross Domestic Product (GDP) will contract about 4% in 1998. This is a substantial downward adjustment on the figures released in the Budget when the full scope of the Asian financial crisis was not yet known. We are not alone in this regard ─ private sector analysts, banks and renowned organizations such as the International Monetary Fund have all adjusted their GDP forecasts. Governments in Asia, America and Europe are doing the same. Clearly we need to do better in the future. The events have also taught each one of us, senior civil servants and Honourable Members alike, to be more self-critical, more constructive and more respectful to the jobs the Hong Kong public has entrusted to us.

We have also learnt that the nature of the Asian financial crisis and its underlying systematic and structural factors are different from and far more complicated than two recent and similar events ─ the crisis of the Exchange Rate Mechanism in Europe in 1992 and the Mexican peso crisis in 1995. Domestic financial laxity and economic policy distortions were common factors in Asia. The wild swings of fast-flowing and highly-leveraged speculative capital in narrower emerging markets led to strong overshoots which were highly destabilizing and severely eroded investor and consumer confidence.

In Hong Kong, we had the added pressure of an attack by manipulators, who created a double-play in the stock and money markets with the sole intention of profiting from the instability they themselves created. We owe a duty to the public to protect the linked exchange rate system and to restore order and a level playing field to the markets. As a government we could not stand idly by and allow manipulators to wreck our markets and I believe the community shared that concern. Exceptional circumstances require exceptional measures. The recent market conditions show that the measures we have introduced are taking effect. But, we are far from being complacent and we know we might not have seen the end of the game yet.

As Members know, we have introduced several packages to help stimulate the economy. Tax and other concessions announced in the Budget will cost $13.6 billion in the current year. Relief measures announced in June will result in a swing in the fiscal balance of over $32 billion. Together, they represent more than 3.5% of the GDP. We will reap the full benefits of these measures within the next 24 months during, hopefully, the recovery of our economy. In addition, over the next five years, we will spend $235 billion on infrastructure development which will provide tens of thousands of jobs. All of these measures are designed to stimulate the economy and their benefits will become apparent once sentiment improves.

We must, however, recognize the constraints against which the Budget and its related fiscal measures are operating. Any unduly large fiscal deficit in the current financial year may frighten investors and outside observers in regard to our excellent record for fiscal prudence. There are also the strict fiscal disciplines enshrined in the Basic Law.

As always, I welcome Members' input on ways in which the Government can best make use of its limited resources during such trying times. Fiscal measures are not the only option. What we really need is a concerted effort of the Government, Honourable Members and the community as a whole. If we make the best out of our own economic potential, we will be able to grasp the earliest opportunity for recovery.

Recent signs have been encouraging, though. Our financial markets have stabilized somewhat. Shorter-term liquidity has eased and interest rates are coming down following recent cuts in the United States. The Hang Seng Index has rebounded. The Japanese Yen has strengthened and stabilized and there have been noticeable improvements in the regional financial environment. The local property market has become more active ─ there have been more transactions, greater price stability and in some cases even a slight reversal of earlier price declines. Inbound tourism has improved for three consecutive months. Unemployment and underemployment rates have tended to stabilize.

For the time being, the economy will still be overshadowed by some distressing indicators. As one of the world's most externally-oriented economies our recovery is dependent as much upon an international recovery as it is on improving local market sentiment. Nevertheless, Hong Kong has successfully overcome previous economic hardship, each time emerging stronger and wiser for the experience. As our Chief Executive highlighted in his policy address, we should look beyond current difficulties and cast our vision far and wide. His policy initiatives are pertinent and far-sighted. There are no gimmicks, because there are no quick fixes to the global financial crisis. Our Chief Executive's proposals are what the economy needs for lasting, longer-term development.

Financial regulation

As Members know, we announced a series of measures in September to improve the supervision on and operations of the financial markets. Some of these measures have been put in place. Consultation with the industry on others is taking place to enable their early implementation. The Chief Executive highlighted the need to take a strategic view of what needs to be done to ensure that our financial market can support the expansion of our role as an international financial centre and fund raising centre for the Mainland. Strengthening of our financial regulatory regime is essential to facilitating market development. The Chief Executive has asked the Secretary for Financial Services to take a more active role in co-ordinating the efforts of the regulators and market operators. I am glad to note Members' support for this approach. Obviously, the strengthening may entail additional resource requirements and may also need the back-up of statutory powers. I hope these proposals, once formulated by the Administration, will have the support of this Council.

I heard the strong call for constant improvement in the quality of the public service, including the making and delivery of important financial and monetary policy decisions. I can assure Members that the Administration is doing just that. Our actions are on the record. They have attracted extensive comments worldwide in addition to those expressed in this Chamber. In this connection, I find it necessary to react to an interesting notion raised by one or two Members to the effect that this Administration is incapable of making the right decisions affecting the markets because incumbent senior financial policy officials do not possess prior market experience. If I may invite these one or two Members to visit the curriculum vitae of Finance Ministers of the G7 or indeed the top 12 economies with a significant financial services sector besides Hong Kong, they will find that only two of them came to their present job with direct market experience. The rest of them learned about their markets in their jobs and they are all seen to serve their financial services sector remarkably well. Most of these advanced economies realize that the decision makers, with the broader vision of the economy and society, and the public interest at heart, are assisted by the most professional people in the field. In our case, the Administration operates on the advice and help of the Hong Kong Monetary Authority, the Securities and Futures Commission and the many advisory bodies, which tender the full spectrum of professional and market views. Indeed the private sector tends to select their Chief Executive Officers largely on the basis of their administrative and business skills and leadership quality, rather than the specialist knowledge of individual products.

I have raised this specific issue to illustrate my earlier point that we all need a greater measure of humility, self-criticism and collaborative spirit in the debate in this Chamber in order to best serve our community at these critical times.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, I am grateful for the interest and the valuable views expressed by Members in programme areas of education and employment during the debates on the 1998 policy address.

First, let me respond to Members' views on manpower and employment.

Manpower policy

Employment forms part of our manpower policy. I shall give Members a brief outline of the Government's short-term and long-term measures in this area.

I. Tackling unemployment

Firstly, on the unemployment front, the Government is acutely aware of the concern of Members and the public over the high unemployment rate and the difficulties faced by the unemployed. In fact, since the beginning of this year, and this was long before the delivery of the 1998 policy address, the Government has been actively and continuously implementing a series of short-term and medium-term measures to help the unemployed re-enter the workforce as soon as possible.

In June this year, the Government set up the Task Force on Employment under the chairmanship of the Financial Secretary. With representatives from employers, employees, academics, training service providers and the Government, the Task Force aims to tap the collective wisdom of various sectors in its endeavours to formulate feasible and effective initiatives, in a pragmatic manner, to tackle the unemployment problem and create job opportunities. Hitherto, the Task Force has met five times and introduced 19 measures. All these measures are in full swing, with some of them already having effect.

(a) On employment services, the Labour Department is providing a full range of enhanced employment services. In spite of the increase in the number of people unemployed in the past months, the Labour Department has succeeded in finding jobs for more job-seekers. The figure stands at an average of 4 000 persons each month.

(b) On training and retraining, all the additional training programmes specifically for the unemployed and secondary school leavers have commenced. In order that more unemployed persons may benefit from retraining, the Employees Retraining Board (ERB) will expand its training capacity in 1998-99 by 6 000 to 79 000, resulting in an increase of its total expenditure to $396 million this year, representing a growth of 80% over 1997-98. Moreover, in this year's policy address, the Chief Executive announced that an additional grant of $500 million would be provided for the ERB to ensure that it has adequate resources to expand its training capacity and improve the quality of its courses for the unemployed over the next few years. Together with this $500 million, the Government have altogether provided $1.6 billion for the ERB. This clearly underlines the Government's commitment to providing retraining for the unemployed.

(c) On promoting of further education, classes for the additional 1 000 Secondary 5 places in government evening schools have commenced last month. Six universities and tertiary institutions have increased their intake at the taught postgraduate level in 1998-99. In addition, the Government has extended the Non-Means-Tested Loan Scheme to benefit an additional 61 000 tertiary students, including those studying at the Open University. The Student Financial Assistance Agency has started receiving applications for the loan.

Tackling unemployment is a difficult and on-going task. The Government and the Task Force on Employment will continue to put in their utmost efforts to identify more job opportunities with a view to helping the unemployed rejoin the workforce and sustain their employability in the longer term.

II. Employment prospects

Although Hong Kong's economy is still going through an adjustment period, the latest data indicate that the unemployment situation has started to stabilize.

In fact, despite the rise in unemployment since the beginning of the year, the total number of employed persons remains at the level of around 3.1 million to 3.2 million, which is more or less unchanged compared with that of last year. And there are still increases in job vacancies in some industries. We should therefore not lose confidence in the economic and employment prospects of Hong Kong.

According to the Government's assessment in June, there will be at least 100 000 vacancies in the labour market during the period between the middle of this year and the end of next year. These vacancies mainly arise from the implementation of the Government's major initiatives, infrastructural projects and other works programmes, and partly from the creation of posts to meet the needs of the Civil Service. As at mid-September this year, about 15 000 posts have been created and it is expected that another 21 000 non-government posts will be created from mid-September this year to the end of next year.

The Government will evaluate the latest progress on creation of jobs with reference to the initiatives and commitments announced in this year's policy address. The results of the evaluation will be announced in due course.

III. Labour relations

Before going into the long-term plans for our manpower resource development, I would like to respond to Members' views on the problem of retrenchments and pay adjustments. The Government is very concerned about the effects of retrenchments and pay cuts on the employees concerned and their families.

I cannot stress more the importance of harmonious labour relations in maintaining Hong Kong's economic competitiveness during the current period of economic adjustment. The Government hopes that all employers who are hard pressed by the economic downturn should discuss their difficulties with their employees, so as to work out arrangements which are acceptable to all. To facilitate effective communication, the Labour Department has drawn up guidelines for employers and employees on what to do in cases of wage reductions and retrenchments. These guidelines have the general support of the Labour Advisory Board.

Let me call on employers and employees to face the present difficult times in a spirit of togetherness and to follow the guidelines in resolving problems over pay cuts in a calm and rational manner.

IV. A long-term plan to invest in human capital

Human capital is the most valuable resource in Hong Kong and quality human resources contribute significantly to Hong Kong's economic development. We should not let the temporary unemployment problem blind us to the importance of long-term strategies. Instead, we should make the best of the slackening labour market by putting in place a practical long-term plan to ensure that Hong Kong has a well-trained, adaptable, versatile and competitive workforce. To this end, we will pursue several strategic plans.

First:	We will undertake a comprehensive study of the best practice in manpower forecasting and develop a manpower forecasting model best suited to Hong Kong for the next 10 years. We will complete the study in 1999.
Second:	We will study the manpower and training needs of our major service sector industries. A study on travel and tourism is under way and will be completed by the end of this year. Another study on the Information Technology sector will commence soon and will be completed in 1999.
Third:	The Vocational Training Council (VTC) plans to integrate its existing two Technical Colleges and seven Technical Institutes by the end of 2002 into one coherent management, academic and training structure, known as the Hong Kong Institute of Vocational Education, to enhance the VTC's quality as well as cost-effectiveness.
Fourth:	To support the VTC's long-term development, the Government will provide a grant of $176 million for it to implement a comprehensive strategy to enhance its information technology infrastructure and services. This exercise will be completed in 2001-02.
Fifth:	We will develop a qualifications framework for the VTC's programmes and the ERB's retraining programmes. This will provide an objective yardstick for assessing the skills standards of trainees and will help secure employers' confidence in, and recognition of, the qualifications. The ultimate aim of the mechanism is to establish a well-structured education and training ladder to allow the trainees to raise their skills standards and qualifications gradually. We plan to draw up the initial proposal by the end of 1999.

Education policy

I am pleased to hear that Members in general support the education policy of the Government of the Hong Kong Special Administrative Region (SAR). To promote Hong Kong's long-term development, we must provide good education for our younger generation. Our young people must be well-equipped with the necessary skills, a broad perspective as well as a positive attitude in order to face the challenges of the 21st century.

The overall objective of our education policy is to enhance the quality of education. We have to continuously reform and update the education system to ensure that it can meet the ever changing needs of the schools, the community and the world. The Government also needs to continuously build on its present foundation. Our aim is to develop students' potentials, foster their independent thinking, and nurture their commitment to their families, the community and the country.

Reform and development are the two foci of the education policy of the SAR Government. I would like to take this opportunity to explain our work.

I. Reform of the education system and structure

Review of the education system

Each and every element of our education system must be closely co-ordinated. In order to enhance the overall quality of education and foster the long-term development of our community, the Chief Executive has in his policy address last year asked the Education Commission (EC) to conduct a comprehensive review of the education system from the pre-primary to tertiary level, the scope of which will cover the goals of education, curricula, assessment methods, the duration of the various education stages and the interface between stages. During the review, the EC will also establish a mechanism to assess the overall performance of students at each stage of education, evaluating their level of knowledge, attitudes and behaviour. The EC has already started the review and it will consult the education sector and the public extensively in the course of the review.

Review of the education-related executive and advisory structure

To promote quality education, the collaboration of the executive and advisory structures is of the essence. We have recently conducted reviews of the advisory bodies and the Education Department. In the review of the advisory bodies, it has been affirmed that the Government will continue to further its partnership with these bodies. The EC, as the most important advisory body, will co-ordinate the efforts of other advisory bodies for the purpose of helping the Government formulate education policies.

Reform of the Education Department

On the review of the Education Department (ED), as the three-month consultation period has ended, we will take a final view on the broad principles and direction for reform after we have collated the views expressed by the education sector and the public. We will propose the setting up of a special ad hoc group within the ED to be responsible for formulating the implementation details by early 1999, and for implementing the reform initiatives by stages. We will also propose the setting up of a steering committee under the Education and Manpower Bureau to monitor the progress of the reform. This steering committee will comprise representatives from the various education-related advisory bodies and frontline educators, to ensure that the Government and the education community work hand in hand to enhance the overall effectiveness of services rendered by the school education system. Moreover, the steering committee also seeks to rationalize the relationship between the ED and schools based on the principle of school-based management.

In the course of the reform, the vested interests of a number of bodies and individuals will be inevitably affected. But nobody should doubt our determination to carry through the reform. I therefore appeal to colleagues of the ED as well as members of the education sector to keep an open mind and to work together to accomplish this task which I acknowledge will be the single most formidable and important mission in the area of education for the coming two years.

II. Formulation and implementation of initiatives to improve the quality of education

At present, there are more than 1.1 million students receiving education in over 1 000 schools in Hong Kong. The Government's responsibilities in the provision of education are heavy and the road before us is long. The Chinese proverb "Learning is like riding a boat upstream, either it forges ahead or it will be driven back" is applicable to individuals as well as to the Government. That is why we have over the years developed new initiatives to improve the present system, and review from time to time the existing practices to ensure that the education system as a whole can meet the changing needs of society and the economy. Now, I would like to take this opportunity to brief Members on the latest position regarding the more significant of our initiatives.

Information technology in education

We are in an information age. We must make it our prime objective to promote information technology (IT) in education to broaden the knowledge of our young people and strengthen the link between Hong Kong and the world. We are finalizing our five-year strategy for IT in education and will formulate an implementation plan shortly in the light of comments received during the consultation period. We must ensure that the Government, schools, parents, community organizations, the business sector and the whole community will collaborate to enable our young people to benefit the most from the use of IT in learning. Not only will IT motivate students to learn, it will also help them develop a creative mind and independent thinking. More importantly, it will encourage and facilitate their self-learning and lifelong learning.

The Government has been implementing a series of measures since 1997 to promote IT in education and has just announced a number of additional measures. The capital expenditure involved will exceed $3.3 billion and the recurrent expenditure will be about $560 million per year.

School-based management

Our target is for all schools to practise school-based management by 2002. As announced in this year's policy address, from the year 1999-2000 onwards, we will provide on average $120,000 for each primary school and $155,000 for each secondary school so that they may employ contract staff or acquire the necessary equipment to cope with the additional administrative work incurred.

Whole-day primary schools

Last year's policy address set the target for the implementation of whole-day primary schools, which was to enable 60% of our primary school students to study in whole-day schools in the 2002-03 school year. This year the policy address further announced a longer-term objective which is for virtually all primary students to enjoy whole-day schooling by the 2007-08 school year. In pursuing this objective, we have to reluctantly continue with the interim measure of slightly adjusting class size in primary schools and suspend the reduction of class size in secondary schools. Our aim is to pool land resources to accelerate the implementation of whole-day primary schools. I must point out that whilst we have slightly adjusted the class size, we have also strengthen support to schools and teachers, including the provision of an additional 910 clerical staff for primary and secondary schools as well as an additional 1 117 secondary school teachers and 650 primary school teachers in the 1998-99 to 2001-02 school years. It should also be noted that whole-day primary schools have a higher teacher-to-class ratio than bisessional schools. In fact, the student-to-teacher ratio for primary schools is projected to improve in the current and next school years. We will continue to seek resources, or to resort to other means, to provide conditions conducive to better teaching for teachers.

High quality teaching

The Chief Executive announced in this year's policy address that the Hong Kong Institute of Education will be developed into a degree-awarding teacher training institute. In the 1999-2000 school year, we will start progressively to grade the 2 400 pre-service teacher training sub-degree places provided by the Institute, and provide instead places at degree or above level available at both the Institute or other tertiary institutions.

Moreover, to improve further the quality and professionalism of our teachers, we will earmark a one-off provision of $20 million to set up a General Teaching Council. The preparatory committee under the Education Commission will publish a consultation document by the end of this year to consult the public and the education community on the specific arrangements for the setting up of the Council.

Development of bi-literacy and tri-lingualism

The Advisory Committee on Teacher Education and Qualifications is developing language benchmarks for all new and serving teachers with a view to enhancing the language proficiency of students. Some Members are of the view that in the course of promoting mother tongue teaching, we need also to raise the English language standard of students. We cannot agree with this more. In fact, we will assist Chinese-medium secondary schools to improve their teaching of English. One measure is to provide additional English teachers for these schools, up to a maximum of four teachers per school. We have also requested the Board of Education and the Standing Committee on Language Education and Research to work together to study how to promote mother tongue teaching more effectively and how to enhance students' proficiency in both the English and the Chinese languages.

Development of higher education

For the past 10 years, our higher education has seen very rapid development and it is an area in which we have invested heavily. It is now time for the tertiary institutions to consolidate and strive for quality. We hope that the institutions can develop their academic strengths into "areas of excellence" which will be recognized internationally, so that Hong Kong will become a first-class international research centre. On the other hand, we are delighted to observe that the tertiary institutions have followed the recommendations of last year's policy address and started to admit students who excel in non-academic areas. This is a clear indicator that besides academic achievement, our tertiary institutions also recognize outstanding performance in other areas such as social service, sports and arts.

Continuing education

Some Members opine that we should provide more education opportunities for the workforce to allow them to receive continuing and professional education. I totally agree with and support this view. I hope that the Open University of Hong Kong and other institutions can actively provide more continuing education courses to train up our workforce and to meet the economic needs of our society.

III. Resource allocation

With the amount of resources the Government is putting into education, it has become the largest biggest public expenditure item. Therefore, I would like to spend some time on the subject of resource allocation. The education policy of the Government has all along been to provide equal opportunity for students to receive education. But equal opportunity does not mean equal distribution of resources. The Government provides more resources and additional assistance to students with special needs. For example, we will install air-conditioning in 17 schools for physically and severely mentally handicapped children to improve their learning environment. I understand that the Legislative Council Panel on Education will set up a working group to follow up on the issue of providing air-conditioning for these schools, and to examine whether the facilities of the schools for physically handicapped children are adequate. I look forward to receiving the suggestions of the working group. We will also provide assistance to students with financial difficulties to ensure that students will not be deprived of the opportunity to receive education due to a lack of means. Starting from the 1998-99 academic year, we will extend the Non-means Tested Loan Scheme (NLS) to more students; and starting from the 1999-2000 academic year, the assessment criteria on family income of the Local Student Finance Scheme (LSFC) will be relaxed so as to relieve the financial burden of low-income families in providing education for their children.

Under the principle of equal opportunities for students, we do not only allocate more resources to help needy students, but we also encourage individual schools to strive for excellence. One of the aims of the newly-established $5 billion Quality Education Fund is to promote school-based initiatives and enhance the quality of education. All schools can apply to the Fund for grants and 350 schools have been successful in their applications. We have also proposed that an award scheme be set up under the Quality Education Fund to give proper recognition to outstanding schools and teachers. This will not only encourage schools and teachers to strive for continuous improvements, but will also set good examples for others to follow, thereby promoting useful experiences and good practices across the education sector.

Likewise, on IT in education, apart from the provision of standard facilities and technical support, we will also allow the more proactive schools to obtain more resources. For example, they will be able to employ IT Co-ordinators to help implement their IT plans. The purpose of this arrangement is to cater for the different paces of IT development of schools to meet the different needs of students. It will encourage those schools which are still hesitant in embracing IT to adopt a more positive attitude. It will also help to promote the IT culture among schools, and to disseminate best practices in the use of IT in teaching.

Education is the most important investment of the SAR Government. Despite the present economic downturn, the Government will increase its spending on education in the next financial year. The recurrent expenditure on education will increase to a total of almost $44 billion. With increasing investment in education, we must ensure that resources are used in an appropriate and cost-effective manner. The Government has to work with the constraint of limited resources and face up to the perennial problems of setting priority and determining the relative allocation of funds to individual items. I would be happy to discuss this question of choices and priorities with Members of this Council on suitable occasions.

Conclusion

I would like to thank Members once again for their interest in manpower and education. In the time available, I have not been able to respond to all comments made by Members. But I look forward to further discussing the issue with Members at the meetings of the respective Legislative Council Education and Manpower Panels in due course. Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, let me first thank Honourable Members for expressing their valuable views on those areas in the policy address which fall under the purview of the Economic Services Bureau. I wish to respond in particular to their comments on three areas: port and maritime trade; agriculture and fisheries; and tourism. As for energy resources, since the Economic Services Panel will hold two meetings on this issue in the coming three weeks, I am not going to say too much on it today.

Port and maritime trade

I am indeed very grateful to the Honourable Mrs Miriam LAU and other Honourable Members for putting forward so many valuable views on the development of our port and maritime trade. Like Honourable Members, the Government also attaches very great importance to our port and maritime trade. That is why in June this year, we took the initiative of reorganizing the Hong Kong Port Development Board and renamed it as the Hong Kong Port and Maritime Board. The reorganization aims to promote the development of the maritime trade by enhancing our communication with it and by providing a better operating environment for our port and maritime activities.

The most important tasks of the Hong Kong Port and Maritime Board are as follows:

(1) To enhance the contacts between the Government and the maritime trade, so as to raise the competitiveness of the latter internationally;

(2) to work with the Shipowners' Association and the Hong Kong Trade Development Council in stepping up promotion work in the Mainland and overseas, so as to attract overseas shipping companies to set up their offices in Hong Kong;

(3) to encourage and attract the International Maritime Organization and other bodies to set up their Asian headquarters and offices in Hong Kong, so as to enhance the position of Hong Kong as an international shipping centre; and

(4) to conduct studies on how best to utilize the favourable business environment of Hong Kong, so as to develop our markets of shipping insurance, financing and arbitration in Asia.

In order to enhance the competitiveness of Hong Kong shipping companies in the world market, we have put in place a number of measures to make it easier for local and Mainland shipping companies to register their ships in Hong Kong, including a cut on registration fees, streamlining ship inspection procedures and provision of registration documents in both Chinese and English. Besides, we have also reviewed the operation of our seamen training centre and provided additional courses, so as to cater for the needs of our modernized port and maritime trade. Finally, we have also assisted local shipping companies in their attempt to lower their tax liabilities overseas. Following the implementation of these measures, the total tonnage of ships registered in Hong Kong has risen from 5.5 million tonnes in November 1997 to some 6.2 million tonnes in late September this year.

As far as the freight trade and port development is concerned, Hong Kong is still the largest port in South China and one of the most significant container ports in the world. However, in terms of the maintenance of our competitiveness, we do face a major problem in high operating costs. With a view to enhancing our competitiveness, we launched a number of detailed studies in conjunction with the then Hong Kong Port Development Board at the end of last year, and a series of measures were formulated to enhance the long-term competitiveness of our port and freight trade. These measures are as follows.

First, we will study the feasibility of providing more lands near the Kwai Chung Container Terminals as back-up areas, so as to raise their productivity and throughput for the benefit of cost reduction.

Second, we shall design our new container terminals in such a way that they can meet the operational requirements of the new generation of increasingly large container ships, so as to maintain the competitive edge of Hong Kong as one of the most important container ports in the world.

Third, as far as possible, we shall grant more lands with longer lease terms to mid-stream operators, so as to enable them to further reduce their operating costs and charges by making more investments and increasing their productivity.

Fourth, in order to overcome the problems of congestion and high costs relating to land transportation, and to expand the sources of goods for our port, we shall take further steps to encourage consignors to ship their consignments to Hong Kong and the Mainland via the watercourses of the Pearl River. In this connection, we hope that our inland pier which was commissioned in the middle of last month will be able to operate well with the inland piers in the Pearl River Delta region. That way, it is hoped that we will be able to make the best use of our geographical position as a port situated at the estuary of the Pearl River.

Fifth, we shall conduct negotiations with the Mainland authorities on further improvements to cross-boundary clearance procedures. It is hoped that we can thus lower the costs of land transportation and enhance the efficiency and competitiveness of our port.

Sixth, in terms of port planning, we shall enhance our contacts with ports on the Mainland. It is hoped that we can then make accurate projections on the throughput of our port and ensure that we will always have sufficient container port facilities to cope with the long-term growth in freight transport in the South China region.

In respect of the land-based management reforms for our cargo handling areas, the working group formed by the Marine Department and cargo handling operators has already completed its review and reached a consensus on the arrangements required. We will implement the recommendations of the working group as quickly as possible, and these recommendations include the provision of back-up lands behind berthing spaces and the introduction of monthly charges for services which are now charged on an itemized basis.

In addition, in order to protect the interests of consignors, we will maintain close contact with the consignors' committee. We will also encourage the various liners conferences to increase the transparency of the pricing of berthing charges and to step up negotiations with consignors on the issues of charges. That way, it is hoped that the burden on local consignors can be lightened and the competitiveness of our port enhanced.

Agriculture and fisheries and supply of non-staple food

Let me now respond to Honourable Members' views on agriculture and fisheries and the supply of non-staple food. The Honourable WONG Yung-kan spoke on the agriculture and fisheries policy of the Government in the earlier part of this motion debate. I must point out that the Government in fact attaches very great importance to agriculture and fisheries, and has been trying to offer them assistance by implementing long-term policies on the four areas of operation, whole-sale arrangements, financial support and conservation of resources, so as to raise their productivity and produce quality thereby enhancing the competitiveness of local primary produce and to promote their sustained development.

With respect to assisting the agricultural and fisheries industries, the Government has commissioned a consultancy study on the best arrangements for resources allocation and operating mechanisms. The aim is to assist the agricultural industry of Hong Kong in its long-term development.

Besides, in order to tackle the shortage of deckhands, we have put in place a mainland deckhands scheme under which a total of no more than 5 000 Chinese deckhands employed by Hong Kong marine fishing boats are allowed to enter Hong Kong and unload fish catches at designated fish wholesale markets. The Agriculture and Fisheries Department (AFD) is now carrying out a comprehensive review on the manpower needs of the local fishing industry, and the review will be completed by early next year. Before we make any final decisions, we will certainly solicit the views of the fishing industry.

Mr WONG proposes that the Government should set up a research institute on the agricultural and fisheries industries. We agree that an appropriate application of new technologies and research findings will certainly enhance the competitiveness of the agricultural and fisheries industries and ensure their sustained development. In this connection, the AFD has already set up a number of experimental farms and research stations where professional experts are employed to introduce new technologies, study their suitability to Hong Kong and promote their application in the industries. Moreover, a number of research institutes devoted to academic studies on agriculture and fisheries are also set up under the various tertiary institutions of Hong Kong. Very often, the AFD will work with these academic research institutes on topics relating to agriculture and fisheries. The Government also allocates funds from the Environment and Conservation Fund and the Industrial Support Fund to tertiary institutions for the purpose of conducting research projects on technological and managerial improvements to agriculture and fisheries. For example, the University of Hong Kong is now being financed to make a hormone-like substance which can stimulate fish to lay eggs, and the University has also set up a genes bank for chickens of pure Chinese breed. We will continue to strengthen our links with the tertiary institutions, and we will also consider other ways of enhancing our research efforts on agriculture and fisheries.

In respect of wholesale arrangements, the AFD has been assisting the industries in selling their produce through various wholesale channels, including wholesale markets, the wholesale vegetable markets operated by the Vegetable Marketing Organization and the wholesale fish markets run by the Fish Marketing Organization. Moreover, we are right now planning to construct Phase II of the Cheung Sha Wan Wholesale Complex so as to accommodate the operators from the Yau Ma Tei wholesale fruits market and the Cheung Sha Wan temporary wholesale poultry market. And, we are also planning to redevelop the Tuen Mun wholesale fish market with the aim of improving its marketing facilities and thus satisfying the needs of the industries.

As far as financial assistance is concerned, the AFD is currently operating seven loan funds. Under these loan funds, low-interest loans are offered to fishermen and farmers for the purposes of satisfying their different needs in improving their operations and in upgrading their equipment and technologies. One example is the Fisheries Development Loan Fund, which provides loans to fishermen who wish to construct new fishing boats or to upgrade their existing fleet. In view of the increasingly widespread use of steel fishing boats by the local fishing industry, the Government has raised the capital of the fund substantially from $7 million to $100 million since November last year. The Government will review the operations of the various funds on a regular basis, so as to make sure that they can always suit the needs of the agricultural and fisheries industries.

In regard to the conservation of agricultural and fisheries resources, we have put in place the following three schemes:

First, the Agriculture and Fisheries Department is now running a $100 million scheme to install about 150 artificial reefs at suitable locations off our coastal parks and along our coastline before the year 2001. Artificial reefs can provide an environment conducive to the massive growth of a rich variety of marine life forms. They can also act as a source of food and shelter for fish fries, thus increasing their chances of growing up into adult fish. The installation of artificial reefs can help sustain our marine resources and promote the long-term development of our inshore fishing industry.

Second, the consultant commissioned by the Agriculture and Fisheries Department has recently issued a report entitled Consultancy Study on Fisheries Resources and Fishing Operation, and a three-month public consultation exercise on the recommendations of the report has just been launched. This consultacncy report provides a lot of useful information on the planning, conservation, development and sustained uses of inshore marine resources. The recommended management strategies include the improvement and restoration of habitats, the setting up of fish fry nurseries and fish conservation zones and so on. After the public consultation exercise, we will formulate long-term strategies on the conservation and management of marine resources, for the benefit of sustainable development of our fishing industry.

Third, the Fisheries (Amendment) Bill 1998 was passed into law by the Legislative Council in October. Under this ordinance, persons using destructive fishing methods such as the use of explosives and poison are subject to much higher penalties than before. Besides, the ordinance also prohibits or restricts the use of any fishing devices which may cause damage to the fishing industry and the marine ecology. We are now working on the formulation of the relevant regulations, with a view to implementing the new regulatory measures as soon as possible.

In their speeches, some Honourable Members said that in order to boost the development of our agricultural and fisheries industries and to ensure a stable supply of quality non-staple food, the Government would need to maintain closer links with mainland authorities for the purpose of enhancing technical exchanges and management co-operation. We agree very much with them. In fact, since our reunification with the motherland in July last year, the AFD has sought to enhance our co-operation with the relevant authorities of the Mainland on a number of occasions.

With respect to quality control, some Honourable Members maintain that the Government should set up a satisfactory mechanism to monitor the quality and hygiene standards of primary produce. The fact is that, in response to some past incidents relating to insecticide-contaminated vegetables, the avian flu and the use of asthma drugs in pig feeds, the relevant government departments have already set up their own mechanisms of quality control. In addition to effectively preventing primary produce harmful to the human body from entering the market, these monitoring mechanisms can also track down the sources of problems and eradicate them at source. The authorities concerned will also prosecute offenders to deter similar offences.

Tourism

Lastly, let me thank Honourable Members for their concern about the tourism industry.

Quite a number of Honourable Members have put forward their valuable views on our tourism industry. And, next week, the Legislative Council will also hold a motion debate on revitalizing this particular industry. Let me reiterate here that the Government fully understands the importance of the tourism industry to the Hong Kong economy, and it attaches very great importance to it. We are determined to maintain the competitiveness of this industry. But since there will be a motion debate on this subject next week, I do not intend to speak in detail on the work currently done by the Government to promote its development. That said, let me still make it very clear that with a view to providing this industry with the software and hardware required for its development, the Government has been co-operating vigorously with the Hong Kong Tourist Association (HKTA), in the hope that we can increase the attractiveness of Hong Kong as a tourist centre.

With respect to hardware, we will continue to work with the HKTA to improve the attractiveness of existing scenic spots and to open up new ones. In this regard, I must say that private sector participation is very important. For example, we very much hope that a cable car link can be constructed as soon as possible between the vicinity of the new airport and the Buddha statute in Ngon Ping, and we are pleased to say that the Mass Transit Railway Corporation has already launched serious studies on the matter. It should also be pointed out that many tourism development projects are in fact very much commercial in nature, and for this reason, they should best be left to private sector organizations. The plan to develop the ocean-liner market of Hong Kong is a good example. The HKTA has recently completed a study on this, and the study findings support the construction of a new ocean-liner terminal in Hong Kong. Soon after the release of the plan, many private sector organizations hastened to indicate their positive interests. By now, they have submitted their concrete proposals for the consideration of the Town Planning Board.

The HKTA is also conducting a whole range of feasibility studies on the opening up of new tourist facilities and scenic spots, including our potentials of developing resort-type hotels and the construction of an aquatic activities centre and a wetland park. We will seek to implement the relevant plans on the basis of the findings.

Several Honourable Members have asserted that the Government should fight vigorously for the construction of international theme parks, especially the Disneyland, in Hong Kong. Let me make it very clear once again that the Government fully supports the construction of theme parks in Hong Kong, much as it supports any other projects which can boost our tourism industry. The Government will make all appropriate arrangements to suit the requirements of specific plans, so as to create a favourable environment and to persuade the relevant organizations to finalize their plans in our favour. Today is of course not an appropriate time to comment on any specific theme park proposal. But I can assure Honourable Members that we will certainly not allow ourselves to "drift", to remain where we are, waiting for our loved one to throw herself into our arms. But equally, we will not keep saying "I love you" everyday and shower her with presents, because if this can work, Snowwhite, Donald Duck, Mickey Mouse and even the Jaws should now be found in many different places already. (Laughter) I believe that it will be best for us to choose a suitable occasion and date our loved one in private; then under a good atmosphere, we should seek to give her a stronger sense of security by showing her what we have (for while love is important, money also counts sometimes). This will help foster mutual understanding, thus significantly increasing the chance of eventual marriage. I hope Honourable Members will agree with me.

Turning back to tourism, I must say that hardware alone is probably unable to maintain and enhance the competitiveness of our tourism industry. That is why we must back it up with adequate software. In this direction, we are right now conducting a promotion campaign entitled "Be a Good Host", so as to promote the delivery of quality services. Next year, we will launch "Total Tourist Care", a campaign aimed at delivering better tourists services through a scheme of quality assurance. It is hoped that tourist will thus have fond memories of Hong Kong after their departure. I very much hope that when this scheme is launched, the tourism sector will give its full support. And, on top of all this, we must add our on-going efforts of making Hong Kong the "Events Capital in Asia". To achieve this aim, we have granted $100 million to the HKTA for the purpose of establishing an International Events Fund. In addition, we have also granted lands to the HKTA on short term tenancy, so that it can stage tourism-related activities. Finally, we also plan to construct a world-class and advanced performing arts centre in the West Kowloon Reclamation Area.

I am grateful to Honourable Members for supporting the creation of the post of Commissioner for Tourism. In response to their questions about the role and responsibilities of the Commissioner, I wish to say that while we expect to submit detailed proposals on this to the Establishment Subcommittee of the Legislative Council as soon as possible, I wish to point out here that the Commissioner will be solely responsible for promoting the development of the tourism industry. His responsibilities should cover the following: formulating policies and overall strategies to boost development of in-bound travel; studying ways of improving existing tourist facilities and of opening up new tourist spots and facilities; strengthening the software support for tourism; initiating various tourism-related proposals and assisting in their implementation; consulting the tourism sector on matters relating to tourism; maintaining close contacts with mainland tourist authorities and international tourist organizations; co-ordinating the work of various Policy Bureaux and departments in respect of tourism; and, working with district boards to enhance and improve tourist facilities at the district level.

Although the Asian financial turmoil has not yet subsided, our tourism industry has already shown signs of a revival in the second half of this year. The number of tourists visiting Hong Kong has increased over that of the same period last year, and the occupancy rate of our hotels has also started to go up gradually. All this confirms that the efforts made by the tourism sector, the HKTA and the Government in the past year have not been in vain. But this should also remind us that we must redouble our efforts, not least because we still have plenty to do.

Finally, let me assure Honourable Members once again that the Government will continue to render its full support to the development of tourism, and it will also co-operate whole-heartedly with the HKTA and the tourism sector to revitalize our tourism industry in a pragmatic and positive manner.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Trade and Industry.

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

Introduction

I am very grateful to all the Members for putting forward a lot of comments and recommendations on our industrial, technological and trade policies as set out in the policy address. I also wish to thank them for those less valuable views and suggestions of theirs. (Laughter)

Innovation and technology

We are especially encouraged by Members' general support to the Government's vision of promoting innovation and technology. In fact, Hong Kong has already become a knowledge-based economy. To enhance our competitiveness in the international market, we must always strive for innovation and technology to improve our productivity. Apart from government efforts, support and co-operation of the business sector and the community as a whole are also of vital importance to the promotion of innovation and technology. Therefore, Members' approval and support to the development targets and new measures in this area as outlined in the policy address will contribute positively to the development of high value-added activities and enhancement of productivity in Hong Kong.

Now, I would like to respond to Members' advice and comments on how to realize this ambitious vision. First of all, "technology" is not as vague and remote as some people might think. The type of technology we advocate is one which can be used in our daily life and in improving the quality of our products and services. It will benefit both the consumers and the business sector by providing the former with services of higher quality on the one hand and enhancing the latter's efficiency on the other. We have no wish to pursue high technology indiscriminately. Instead, our focus is on how to promote economic development through proper technological application. It is also worth mentioning that innovation is not confined to technological development. In fact, it covers many areas of business activities, as well as activities undertaken by individuals or organizations. At present, many local businesses have gradually started to increase their added value through innovation and technology, constantly bringing us new or improved products and services. Our vision of promoting innovation and technology, therefore, is a pragmatic and far-sighted development strategy for Hong Kong.

Secondly, the promotion of innovation and technology is not restricted to new industries or areas applying state-of-the-art technologies. Through the development of new products and the adoption of new production technologies and marketing strategies, some so-called "tradition" industries, such as garment, toy and plastics industries, can also greatly enhance their productivity and competitiveness and create opportunities for business development. Therefore, we believe that innovation and technology can provide various trades and sectors with a strong and broad base for development.

The new initiatives announced by the Chief Executive in his policy address this year aim at building a more solid foundation for the future technological development of Hong Kong, in a way that the business sector can operate and develop business in a better environment which caters for the future development of our economy. The Trade and Industry Bureau and all relevant departments are looking into ways for the effective implementation of these initiatives. For instance, the Industry Department will shortly set up a planning group to prepare an outline plan for the establishment of the Applied Science and Technology Research Institute. We are also working on the details of the Innovation and Technology Fund and we intend to apply for funding from the Finance Committee of the Legislative Council in a few months' time. In addition, we will launch our work in promoting technological collaboration and exchanges with research institutions in the Mainland. The support of Members and various sectors in the community to these initiatives is very important.

Many Members are of the view that building up necessary human resources is an important element in the promotion of innovation and technology. The Government shares this view. In the next few months, the Commission on Innovation and Technology will focus its attention on how to encourage local young people to pursue a career in technological research and development and industrial application. It will also examine how to attract technological talents from the Mainland and other places to work in Hong Kong.

A robust regime to protect intellectual property rights is indispensable to making Hong Kong a centre of innovation and technology. The Government will continue to do its utmost to fight against piracy and strengthen public education on intellectual property rights.

Small and medium enterprises (SMEs)

Many Members are particularly concerned about the implementation of the Special Finance Scheme for SMEs and have made a lot of recommendations on its improvement. The Government fully understands the concerns and expectations of the community on the Scheme. So, before we mapped out the details of the Scheme, we had widely consulted Members, political parties, the banking and business sectors and SME organizations to make sure that under the principle of prudent use of public funds, the Scheme could serve to ease the credit crunch faced by SMEs.

Since the introduction of the Scheme on 24 August, the Govenrment has been closely monitoring its performance and progress as well as soliciting the views of various sectors on its operation. Thus, it can be said that the review of the Scheme is already in the pipeline. Since the introduction of the Scheme, the number of applications has been growing and there are many financial institutions participating in the Scheme. However, in view of the fact that the Scheme has come into being for just a while, we deem it more appropriate for the Scheme to operate for a longer period of time so as to allow time for the relevant government departments as well as financial institutions and SMEs participating in the Scheme to acquire adequate experience before we start considering ways to improve the overall Scheme. Therefore, we intend to conduct a more comprehensive review in early 1999. During the review, we will certainly take into consideration all views expressed by Members and other interested parties on the implementation of the Scheme.

Moreover, we are actively preparing for the establishment of Small and Medium Enterprise Office, which aims at helping SMEs make good use of various services specifically provided for them.

Promoting trade and investment liberalization

Hong Kong has been an active supporter of trade liberalization. We understand that a multilateral trading system which is stable, rule-based, open and non-discriminatory is very important to Hong Kong, a small economy relying heavily on external trade. For this reason, we have been playing an active and constructive role in the World Trade Organization (WTO) to secure the best market access opportunities for our traders. In this regard, we have not only made constructive contribution to the discussions of various committees under the WTO, but also played a leading role in multilateral negotiations on areas such as basic telecommunications and financial services.

In addition, we have participated actively in the two WTO Ministerial Conferences. Our contribution to the two Conferences has won praises from other WTO Members. The Third Ministerial Conference will be held in the United States in late 1999. We aim to get WTO Members to agree at the Conference to launch a new round of comprehensive and balanced multilateral trade negotiations so as to further the liberalization of trade and investment. We are of the view that further tariff cuts should be one of the issues for negotiations.

For this purpose, Hong Kong and a group of like-minded WTO Members who have been actively pursuing the idea of launching broad-based multilateral trade negotiations agree to meet periodically in order to strengthen co-ordination. Ministers of Trade/Economic Affairs of these WTO Members agree to hold an informal ministerial meeting in Hong Kong, China on 20 November 1998. As the host of the meeting, Hong Kong, China will work closely with other Ministers to discuss how to liaise with other WTO Members supporting a new round of multilateral trade negotiations and how to prepare for a new round of negotiations. We expect the meeting would provide positive contribution to pursuing the launching of a new round.

Competition policy

On competition policy, some Members voiced their opinions on the work and membership of the Competition Policy Advisory Group (COMPAG). Having been established for less than a year, the COMPAG has accomplished an important task in the formulation and promulgation of a "Statement on Competition Policy" in May this year. The Statement clearly sets out the objectives of the government policy on competition and establishes a comprehensive, transparent and broad policy framework on competition. In conjunction with Policy Bureaux, the COMPAG is reviewing government practices from a competition policy standpoint to ascertain the extent to which competition can be enhanced. If necessary, relevant experts will be invited to join the discussions of the COMPAG.

Consumer protection

Finally, I would like to turn to consumer protection. The Government has always attached great importance to consumer protection. It has also introduced a package of legislation to enhance consumer protection. Consumers are now well protected in general dealings. Next year, we will start the drafting work of a law which will enable consumers to claim compensation from producers, retailers and so on for loss arising from the use of unsafe products. As to the concerns expressed by some Members on prepayment, we have recommended that this subject be referred to the Law Reform Commission for its full study.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Information Technology and Broadcasting.

SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING (in Cantonese): Madam President, in the motion debate on the policy address held two weeks ago, many Honourable Members spoke on the parts of the policy address concerning information technology, telecommunications, broadcasting and film. On the whole, Members were supportive of government policies in these areas. I wish to express my thanks to them and respond to their points here.

First of all, I wish to point out that when compared with other areas in the Asia-Pacific region, Hong Kong is in no way inferior to them when it comes to information technology and telecommunications. In terms of telecommunications facilities and usage, Hong Kong still has a substantial edge over other competitors in the region. For example, the telecommunications networks in Hong Kong have been fully digitized ever since 1995. In comparison, only 80% and 78% of the telecommunications network facilities in the United States and Australia respectively are digitized. Hong Kong's edge in this respect is obvious. In terms of the expansion of the coverage of broad-spectrum networks, Hong Kong's developments in recent years have been very rapid. We anticipate 56% of the clientele in the territory will be covered by broad-spectrum networks connected to the buildings by optic fibre cables in the first quarter of next year. This access rate is one of the highest in the Asia-Pacific region. The permeability rate of mobile telephones in Hong Kong is as high as 38%, the similar rate for fixed network telephones is 55 lines for every 100 people. 34% of the households in Hong Kong have a personal computer and there are 830 000 clients subscribed to the Internet. All these figures show that Hong Kong is definitely not behind other countries in telecommunications facilities and information technology applications. I must point out in particular that all these telecommunications and information technology facilities are constructed by private investors. The role played by the Government is to provide a favourable investment and operation environment and to give active assistance to the sector should the need arise. This has been the consistent policy of the Government. In the long run, this has proved more effective than making various kinds of commercial investments using taxpayers' money as is the case in other places.

In the process of formulating information technology strategies, the Government has carefully considered the factors conducive to helping the territory reach the forefront of the world of information technology. We concluded that there are four factors in the environment. They are:

(1) a high capacity telecommunications system;

(2) a convenient communication between individuals, businesses and government users with a mutually compatible software interface;

(3) the training of people conversant with information technology and versatile in its application; and

(4) the fostering of a culture and environment which would facilitate the stimulation of innovation and the development of information technology.

The strategy on information technology announced by the Government recently is precisely one such blueprint founded upon these essential factors. It is a practical strategy which addresses the current situation in Hong Kong. A package of measures have been drawn up for this purpose. It seeks to preserve Hong Kong's existing edge by providing assistance to those segments which are already well-developed, and to redouble efforts to promote those segments which have a slow start or have had rather unsatisfactory progress for an expeditions catch-up.

I have just mentioned the provision of a high capacity telecommunications system. We have state-of-the-art communication systems which have been enjoying a leading edge in the Asia-Pacific region. The injection of enormous resources by those in the sector has made expansion and upgrading possible in the infrastructure both for internal and external communications. We believe that through the promotion of effective competition, the market can be made more efficient, innovations encouraged and consumers given more choices. To facilitate effective competition, the Information Technology and Broadcasting Bureau has conducted two consultation exercises this year, and early next year we shall submit our legislative amendment proposals to the Legislative Council for scrutiny.

On the liberalization of the telecommunications market, we are closely following the global developments. We will gradually open up the local and external telecommunications markets. For the local fixed network services market, we are cautiously considering the proposals for further investments made by the three new fixed network services providers to decide whether new licences for local fixed network service should be granted. The final decision of the Government shall rest on the choice of a measure which can bring in more effective competition in the market so that consumers can really have more choices.

On the liberalization of the external telecommunications market, we have made tremendous progress during the year. After the public consultation exercise, the Government announced at the end of last month that new licences for external telecommunication services would be issued from 1 January 1999 onwards and the number for such licences would be determined by the market. Competition would likewise be introduced in 1 January 2000 for the external telecommunications facilities market. The Government is presently studying into the issue of whether more licences would be issued on top of the four fixed network services providers which have been granted the approval to run external telecommunications facilities. We have plans to make announcements on that by the end of this year or early next year. In keeping with the impending liberalization of the external telecommunications facilities market, the Government is working hard to speed up the preparation works for the satellite telecommunications station site at Chung Hom Kok with the hope of leasing part of the site to the operator by the middle of next year. This will enable competition to be introduced to the external telecommunications facilities market in January 2000 as scheduled.

The second factor which contributes to the success of Hong Kong is the setting up of a mutually compatible software interface to enable individuals, corporations and the Government to communicate with each other. In the middle to long term, we would like to see a full development of electronic transactions in Hong Kong such that services provided by the Government, business activities between corporations and consumer activities will be carried out as much as possible through electronic means. In order to popularize the trend of electronic transactions, the Government will implement the on-line Government Electronic Services Delivery Scheme (the Scheme). The Scheme will not only raise the overall efficiency and quality of government services, but also, more importantly, build up a favourable environment conducive to the development of electronic transactions.

To instil confidence in the public for the Scheme, we shall set up proper mechanisms to ensure the security and soundness of transactions made through the open communication networks. Furthermore, we plan to introduce an enabling bill on electronic commence to the Legislative Council next year. The bill will make specific provisions for digital information, legal endorsement for electronic signatures, the establishment of a certification authority and such like matters. We expect that the Scheme will demonstrate the superiority of electronic transactions over traditional modes of transactions and to make the public get used to using more applications in information technology and hence making electronic transactions part of their lives. This will provide a solid ground for the development of electronic transactions. The policy objectives of the Government with regard to the promotion of electronic transactions are based on and in line with the Government's conviction in the provision of a favourable environment such that economic activities will develop by themselves according to market principles of supply and demand.

As for the work in manpower training, it is mostly carried out by the Education and Manpower Bureau. The Bureau Secretary, Mr Joseph WONG, has outlined briefly the various programmes to promote the wider use of information technology in teaching and in schools. He also mentioned that in the near future, the Education Commission will commission a consultancy study on manpower and training needs in the information technology sector. Therefore, I will not elaborate on this here.

In respect of the building of a culture and environment conducive to the stimulation of innovation and the development of information technology, we have proposed a series of measures. For example, we shall brief out the Government's projects on information technology and to enter into contracts for the implementation of these projects. This is done with the hope of providing more stimuli to the development of the local information technology industry in order to establish a sizable local market. Besides, we shall promote the collaboration of academic institutions and businesses in matters related to technology. We shall encourage the academic institutions to turn the fruits of their research into marketable products. We shall also make use of the existing subsidization mechanism to finance plans and studies for scientific research. We plan to promote quality assurance schemes in information technology products and provide incentives for excellence in design. To facilitate a wider application of innovation and technology in the community, we plan to set up award schemes to commend individuals and companies for their ingenuity in applying information technology.

I hope Honourable Members will understand from my brief introduction just now that the Government has made thorough considerations in the process of drawing up an information technology strategy for Hong Kong. We have not only made long-term objectives but also laid down a practicable timetable in a realistic and pragmatic manner. Hong Kong possesses excellent conditions that allow it to surge ahead in the domain of information technology. We should not be condescending but to take on a positive and progressive outlook and work hard to strive for excellence. In this way we will certainly open up vast new horizons.

Insofar as television broadcasting policies are concerned, our objective is to facilitate development of the broadcasting industry and to upgrade the status of Hong Kong to a regional centre of excellence in broadcasting. To take this forward, we propose to liberalize the television market and promote the expansion and compatibility of broadcasting and telecommunications networks. This will fully utilize the infrastructure of the existing networks so that the public will be provided with the greatest number of telecommunications and broadcasting services.

I am very pleased to hear many Honourable Members express their support for the various proposals made by the Government on the liberalization of the television market. There are concerns expressed by Members also on whether a level playing field exists in the market, and how to regulate licensees holding a leading edge in the market. We will study the views put forward by various sectors of the community, including those by Members, on the recommendations stated in the review of television broadcasting policy. And we hope to announce the Government's decision on television broadcasting policy by the end of this year or early next year.

As for the film services, I wish to thank the many Members who supported the proposals made by the Chief Executive in the policy address. It has been proposed that a $100 million Film Development Fund be set up in 1999 to assist the long-term and healthy growth of the film industry. As for its uses, I wish to make it clear that the Fund does not only receive applications concerning the use of technology and special effects techniques. We will consider all applications which are beneficial to the overall development of the film industry. We will also keep in close touch with the film industry and the Film Services Advisory Committee in particular, in the hope that the Fund will be put into the best uses by the film industry.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Transport.

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, first of all, I would like to thank Members for their valuable views on the transport policy.

The transport policy of the Government is to provide a safe, reliable and efficient transport system to cater to the territory's social and economic development needs. In the coming year, we will continue to expand and improve the transport infrastructure. Moreover, the Government will step up its efforts to improve both the quality and quantity of public transport services so as to provide even better services. We will also step up the regulation over road use to reduce congestion and enhance traffic safety.

Transport infrastructure

In the policy address, the Chief Executive has already outlined the transport infrastructure programme for the coming few years. The Government's commitment to the transport infrastructure development is a steadfast and long-term strategy. It is not only a long-term investment but also the skeleton of other infrastructural development, a driving force to economic development.

At present, the planning and construction of five new railway projects are in full swing. After the completion of these projects, all the new towns in Hong Kong will be served by railways and the Sheung Shui-Lok Ma Chau Spur Line of the Kowloon-Canton Railway (KCR) will provide a new and more convenient boundary crossing for the commuters between Hong Kong and the Mainland, easing the congestion at the Lo Wu Station. A total of about $120 billion will be invested in these five projects, which are expected to be finished between 2002 and 2004. It is expected that 27 000 job vacancies will be created during the design and construction of these projects.

As regards road development, the Government has already earmarked $17 billion for road projects between 1997 and 2002. Major road projects under design and study include Route 9 linking Tsing Yi and Cheung Sha Wan, Route 16 linking Sha Tin and West Kowloon, the section of Route 10 between Northern Lantau and Yuen Long and the section of Route 5 between Tuen Mun Road and Tsuen Kam Interchange. All these trunk routes function as supplements to the present road networks and link up the new strategic development areas. These projects are expected to create more than 10 000 job opportunities.

As regards the long-term railway and road projects, the Railway Development Study-2 and the Third Comprehensive Transportation Study currently underway will put forward recommendations on the new infrastructure projects in 1999. I believe that these recommendations will include the railway line in eastern Kowloon, the Ma On Shan rail link with the urban areas and the fourth harbour crossing. I expect the studies, on completion by the end of next year, will draw a comprehensive blueprint for the long-term development and outlook of the transport infrastructure in Hong Kong.

In addition to planning on the expansion of the transport infrastructural network, the Government has also conducted a detailed review on expediting the implementation of the projects. From planning to completion, these major road and railway projects usually spans 10 to 20 years during which time such essential statutory and administrative procedures as public consultation, environmental impact assessment, feasibility studies and tender procedures have to be completed. We hope to shorten the time taken for the implementation of the projects so as to meet the urgent traffic needs. We would enhance the relevant departments' efficiency and allowing certain procedures to be carried out simultaneously with a view to reducing about 15% of the time required. I believe that it is the common aspiration of the Government and the people that the implementation of the infrastructure projects be expedited. I expect to be able to co-operate fully with Members in this respect in order to achieve this goal.

Traffic management

One of our focuses insofar as traffic management is concerned is to plan and speed up the construction of a number of pedestrian crossing systems in Central, Wan Chai, Tsim Sha Tsui and Tsuen Wan. These pedestrian facilities will separate the pedestrian and vehicle flows to enhance traffic safety and at the same time facilitate more effective use of road surface by vehicles. Apart from that, we will continue to expand the railway network to provide off road transport services, to improve the quality of public transport services to attract more motorists to switch to mass transport services. These are ways to alleviate the pressure on roads. The Government will continue the work in this direction to best utilize the road network capacity.

Moreover, we will also use high technology as far as possible to enhance the effectiveness of traffic management and law enforcement. The focus study at the moment is on using technology more effectively to manage the main road networks and develop a comprehensive traffic information system. In respect of whether the Electronic Road Pricing system needs to be implemented in the long run, a consultancy study on the application of this system will be finished in 1999, and the Government will then decide the way forward after considering the findings of the consultancy study and other factors such as the economic situation as well as after consulting the public.

Public transport services

Our goal is to improve the quality and quantity of the public transport services to meet the ever-rising demands of the people and the needs of social development. The Government put out for public tender the franchise of a package of 88 bus routes on Hong Kong Island and awarded it to the New World First Bus Services Limited (First Bus) early this year. This fully demonstrated the Government's determination to enhance service quality by introducing competition into the market. Since the First Bus took over the service, the operation has been fairly smooth so far. To further improve its service, the company consults the public and provides information about the bus routes through various channels such as a passenger liaison group and its Website on the Internet. It is very encouraging to see the Company's positive and enterprising attitude. The Government will continue to keep a close eye on the future operation of the First Bus to ensure that it will fulfil its service pledges such as the acquisition of 500 new buses in the next two years and the installation of facilities for the handicapped and the Octopus System in its new fleet.

For ferry services, our target is also to introduce competition so as to bring about improvement to service quality. In view of the fact that the ferry services have come under keen competition from the railway and bus services in recent years, we need to reorganize the ferry routes for a more effective utilization of resources to better meet the people's demand for transport services.

The franchise of the Hongkong and Yaumati Ferry (HYF) will expire on 31 March next year. The Government has broken up the six outlying island routes into different packages and put them out for public tender in the form of licences. Our target is to ensure that the provision of ferry services on these routes will be maintained after the expiration of the HYF's franchise. On the other hand, the Government also hopes that through licensing, it will be able to regulate the arrangements and operations of these ferry services in a more flexible manner so as to improve their quality and quantity.

Having carefully scrutinized the tender applications, the Government has decided to award the routes to Cheung Chau, Mui Wo, Ping Chau and the one round the Hong Kong Island to the HYF, and the routes to Yung Shue Wan and Picnic Bay to the Hongkong and Kowloon Ferry Limited. By introducing competition through an open tender, the Government can see to it that the frequency of the outlying islands routes will be increased, the time taken for each trip reduced, the fares maintained at a level similar to the present ones and there may even be lower fares for the express ferry services of individual routes. The Government will assist the two ferry companies in their preparation for the provision of ferry services and also monitor them closely to ensure that the services will run smoothly from 1 April 1999 onwards.

As to the in-harbour routes and those to the new towns, the Government has also broken them up into various packages and put them out for open tender in the form of licences.

Cross-boundary traffic

Other than the transport networks within the territory, it is equally important to improve outward transport links beyond the boundary. The traffic between Hong Kong and the Mainland has been increasing consistently. To meet the demand, we will tackle the issue from several approaches. In the short run, the Government will work on meeting the demand of the increased cross-boundary traffic volume by improving the facilities and road links at the boundary control points and improve the operation modes there. The widening works of the Sha Tau Road will be completed by the end of this year and the works of increasing the number of kiosks for customs and immigration checks at the Lok Ma Chau Crossing will be completed next year. The opening hours at Lok Ma Chau, Man Kam To, Sha Tau Kok and Lo Wu will be gradually extended starting from the middle of this month, while the streaming of freight vehicles has already been put into place on 15 October. The Government will continue to keep a close look at the cross-boundary traffic condition to see whether further measures are necessary.

In the long run, there are needs to open new road and railway crossings at the boundary. Other than the railway boundary crossing at Lok Ma Chau mentioned above, the Lingdingyang Bridge and the Hong Kong-Shenzhen Western Corridor are also projects being examined. The development of new boundary crossings entails the co-operation between Hong Kong and Guangdong and the Hong Kong-Mainland Cross-boundary Major Infrastructure Co-ordinating Committee are holding discussions on these projects.

Conclusion

On the whole, insofar as transport policy is concerned, we will, continue to develop the transport infrastructure, improve the public transport services and transport management upon the present foundation, so as to develop a comprehensive internal and external transport network. In the Legislative Council's debate on the policy address, I have observed that Members generally support the broad direction of the Government's transport policy and hope that we will expedite its implementation. As usual, I will continue to keep in close contact with the Legislative Council Panel on Transport on the implementation of the various measures and proposals in this regard.

PRESIDENT (in Cantonese): Secretary for Works.

SECRETARY FOR WORKS (in Cantonese): Madam President, in the briefing and debate on the policy address, as well as in the meeting of the Legislative Council Panel on Planning, Lands and Works, many Honourable Members have put forward their views on infrastructure projects. I wish to thank them for their valuable advice.

Some Members reiterated in the motion debate that the Government had to ensure that the local professionals have the maximum chances of participating in government projects. Some Members also raised the point that the Government should involve more local professionals in government projects because they were familiar with the local environment and the needs. Although these suggestions are nothing new, I wish to make use of the government procurement policy and figures in the various kinds of contracts awarded, to illustrate once again the extent to which local professionals and people from the local construction industry are involved in government projects.

Procurement policy

As from 19 June 1997, we have adopted and followed the stipulations of the Agreement on Government Procurement of the World Trade Organization. For construction projects, the Agreement is applicable to construction services with a tender price of over $5.5 million exclusive of consultancy fees. Subscription to the Agreement on Government Procurement has not changed the procurement policy consistently adopted by the Government.

The procurement arrangements made by the Government for public works and other related services mainly follow two policies, namely, the achievement of maximum cost-effectiveness and the maintaining of open and fair competition. Therefore, we must ensure that the goods suppliers and service providers of the Government will be able to engage in fair competition. Our principle is to be transparent and will not give preferences to or discriminate against any countries, while keeping in view the local situation so as to ensure that local companies will not be put in a disadvantageous position as a result of the stipulations of the World Trade Organization.

Works contracts

At present, over 80% of the contractors on the Approved Contractors for Public Works List are local contractors. All contractors, including overseas contractors, must employ in Hong Kong not less than a certain number of management and technical staff with local experience. Contractors on the List can be divided into groups A, B and C. Engineering firms in group A are not allowed to bid for works contracts with a value above $20 million. Group B companies are not allowed to bid for contracts above $50 million. Group C companies can only bid for contracts worth $50 million or above. These companies can only bid for contracts involving works of a larger scale.

All contractors in groups A and B are local companies while those in group C include local and overseas contractors, as well as those from the Mainland. Over the past three years, 343 contracts (roughly 84% of the total number) with a total value of $29.1 billion were awarded to local contractors. 43 contracts with a total value of $9.9 billion, went to mainland contractors. The remaining 21 contracts with a total value of $5 billion, went to overseas contractors. The above figures show that only a very small portion of public works contracts were awarded to overseas contractors.

There are many opportunities for local contractors to take part in the forthcoming infrastructure and public works projects. By the end of 1999, we expect that among the 400 contracts, about 160 contracts with a value of under $20 million and 60 contracts with a value between $20 million to $50 million will be awarded to local contractors on groups A and B of the List respectively. Local contractors of group C can also compete with mainland and overseas contractors for the other 180 contracts or so.

Consultancy contracts

There are many sizable engineering consultancy firms in Hong Kong and most of them have been in operation for more than 20 years. Although quite a number of these companies started their business in Hong Kong as a foreign company, their chairmen, directors and the professionals they employ are mostly local engineers who are educated and trained in their profession locally.

For architectural consultancy firms, of the 35 companies on the list of architectural consultancy firms with the Architectural Services Department, 27 are local companies and a few among these companies have operated for quite a considerable time in Hong Kong.

Over the past three years, we had awarded a total of 239 engineering consultancy contracts, of which 163 were awarded to companies with more than half of their professionals employed being locals. These contracts took up about 77% of the total. Of the 44 architectural consultancy contracts awarded, 30 went to local companies which took up about 68% of the total. According to information available, most of the professionals involved in consultancy contracts are locals.

It is not an easy task to set up a sizable consultancy firm. There is bound to be some difficulty for small local consultancy firms to compete with large ones. So we are thinking of giving more assistance to local consultancy firms and requiring government departments to choose small local consultancy firms with less than five professionals if the departments wish to select consultants for some small scale projects. We hope that these small local firms can gradually grow and augment their market share. This will be beneficial to the long-term interest of Hong Kong.

Local professionals and local workers

As for the employment and training opportunities of local people, according to our information obtained, local engineering graduates do not encounter much difficulty in getting employed. There are stipulations in the terms of current works contracts and employment conditions that priority should be given to local people when companies hire workers and on-site professionals and technical staff. The recent financial turmoil has made architecture graduates encounter some difficulties in finding employment. I think this problem is only a temporary one because the situation will hopefully turn better when the various public works projects commence.

In our vetting of tender prequalifications and proposals for consultancy contract, we always value local experience and will give due weight to this in our assessment. We understand that many local professionals have some views on this. The Bureau is making a review of current practices and will discuss with all parties concerned in the attempt to strike a balance between different views.

"Design and construct" and "Build, operate and transfer"

Dr Raymond HO suggested that the Government should encourage private firms to take part in public works so as to reduce the financial burden of the Government and to speed up the completion of the works projects. This suggestion is in line with the established policy of the Government.

We will use the " design and construct" contractual arrangement to make the best use of the expertise and resources of the contractors in project design. This will lower costs and save time. Projects using this kind of contract include building projects like the Sheung Shui Abattoir and the Cheung Sha Wan Government Offices which are under construction and civil engineering projects like the Ting Kau Bridge which has been completed.

For projects which can generate revenue when in operation, we would use the "build, operate and transfer" kind of contracts. This is to attract investment from private firms. As we all know, this kind of financing arrangement is used in large-scale projects such as the Route 3 (Country Park Section), Western Harbour Crossing and Tate's Cairn Tunnel.

A number of large-scale infrastructure and building projects will be launched in the next few years. Needless to say, we will also use the "design and construct" and the "build, operate and transfer" types of contracts. These arrangements will be used in suitable projects.

Promotion of Hong Kong's professional services

Mr Edward HO asked the Government to take the initiative to promote Hong Kong's professional services in other regions, especially the Mainland.

On promoting the growth of the construction industry, we have put in a lot of efforts over the past year. We have strengthened our contacts with the relevant authorities in the Mainland, especially the Ministry of Construction in China. In March this year, we held a seminar in Qingdao in association with the Ministry of Construction and many professional bodies from Hong Kong. The theme was on market participation. In early September, we joined hands with the Trade Development Council and led a group to visit places in Guangdong and the northwest provinces. In early October, we held a seminar in Beijing with the Ministry of Transport on projects using the "build, operate and transfer" mode. These activities were well supported by people from the construction industry who actively took part. I believe these activities will be of great help to the future growth of the Hong Kong construction industry.

Investments in infrastructure

Madam President, the Government has long-term objectives and plans as far as investments in infrastructure are concerned. Over the past decade, there was an average annual growth of 6% in real terms in public works expenditure. The expenditure for 1998-99 is well over $20 billion. This massive investment in public works is in keeping with the overall development and population growth of Hong Kong. It will also generate huge economic benefits for the territory.

Providing employment

From May to October 1998, 146 public works contracts and consultancy contracts worth $8.6 billion were launched, providing a total of about 10 000 positions. At the same time, we were fast-tracking the progress of each phase of these projects. During the period from May to October this year, we shortened the time needed for the commencement of 25 projects by about one to 10 months. Of these projects, nine of them have already commenced.

Fast-tracking the works projects to increase cost-effectiveness

Just now the Secretary for Transport, Mr Nicholas NG, has already mentioned our fast-tracking of public projects. The Works Bureau has urged all the works departments to raise their efficiency and productivity and in this connection introduced some administrative measures, such as unifying certain simple works documents and designs in order to save the time in design. As for cost-effectiveness, we will make detailed vetting during the planning stage so that the most cost-effective proposal can be adopted.

Madam President, if public works can commence as soon as possible, employment opportunities can be increased. If infrastructure projects can be completed soon, it will facilitate the growth of Hong Kong. If planning is done thoroughly for the works, it can increase the cost-effectiveness of the projects. The Works Bureau will co-ordinate and co-operate with various Policy Bureaux and works departments to achieve the abovementioned goals. We have the confidence and the determination to do so.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, may I start by thanking the many Members who made mention of environmental issues during their speeches on the policy address.

The policy address has issued us all with a challenge to work together to improve Hong Kong's environmental performance for the sake of our competitiveness and the health of our citizens. I am grateful for the encouraging response from so many Members. Although some Members have criticized the Government on our work, these criticisms are good-natured and reflect that basically Members support the Government's environmental policy.

I would concentrate on the two areas that Members made clear are of greatest concern, that is, air pollution and the management of waste.

The Government is fully aware of the concern of our citizens on the air pollution levels in Hong Kong. Poor air quality affects both the health of our residents and the impression visitors have on our city. The main source of our air pollution comes from our vehicles. In the policy address and in the presentations made by my colleague, the Secretary for Transport, emphasis has been put on the work we are doing to develop a more environmentally friendly transport system. I wish to focus this afternoon on the work we are doing now to reduce the pollution coming from the present road transport system.

The Chief Executive has given an objective to the public service, the taxi, motor and gas supply trades, to ensure that we can require all new taxis to operate on Liquefied Petroleum Gas (LPG) by the end of 2000.

Madam President, the Administration shares Members' views and hopes that the scheme can be implemented as soon as possible. But we must first make full preparations for a comprehensive system for LPG refuelling and maintenance to ensure that taxi services will not be disrupted and that the scheme will be implemented successfully. It will take some time for these work to be completed. At the same time, we must maintain very high safety standards to ensure that we will not expose the community to yet another risk because of the need to solve a problem. But I do want to give two undertakings to this Council and to the community this afternoon.

First, we will work with the taxi trade, motor trade and gas supply companies to maximize the use of every new LPG facility as it comes on stream even before the end of 2000, so that we encourage as many LPG taxis as possible to operate on a voluntary basis.

Second, while we phase in LPG taxis, we will pursue our programme to clean up the emissions from existing taxis and from the rest of the vehicle fleet with the utmost vigour. That programme involves action in four areas:

(A) First is enforcement action against smoky vehicles.

- We are issuing the police with new portable smoke meters, to make it easier for them to prosecute smoky vehicles on street through fixed penalty tickets. Enabling legislation will be laid before this Council shortly.

- We will put an increase in the fixed penalty fine to this Council within this Session.

- The Environmental Protection Department (EPD) will step up both regular joint actions with the police and special operations on days when the air pollution index is high.

(B) Second is better maintenance and testing of vehicles.

- Chassis dynamometer tests for smoky light vehicles will be introduced by mid-1999. Systems suitable for use with heavy vehicles are being tested at the moment. These tests will compel vehicle owners to maintain and tune their engines properly.

- The EPD and Transport Department will also step up their programmes to educate vehicle owners and mechanics to exercise their responsibility to maintain vehicles properly.

- Most new vehicles are already required to meet emission standards that rank with the best in the world. We will extend controls to cover motorcycles, and have recommended that any new diesel taxi introduced before the LPG scheme becomes mandatory must meet the Euro II emission standard.

- We are preparing further tightening of emission standards for light vehicles next year, and also expect to introduce standards for evaporative loss from new petrol vehicles.

- We will shortly put legislation to this Council to impose a complete ban on the use of leaded petrol.

(D) Fourth is experimentation with new, cleaner technologies.

- Trials on cleaner fuels for the minibus fleet will be proposed in the coming year.

- We are paying close attention to the development of clean technologies, including the work being done by the Polytechnic University, with support from the taxi trade, to develop exhaust filters that may help reduce pollution from the taxi fleet in advance of the conversion to LPG.

Every part of this programme to tackle the vehicle air pollution problem will be given our priority and pursued vigourously. I very much welcome the support that is coming from the taxi trade, motor companies and oil suppliers, and from many different groups in the community.

Finally on waste reduction, I fully share Members' concern about the need to reduce waste and to make more responsible use of resources. Tomorrow the Government will be setting out a Waste Reduction Framework Plan. It is a 10-year programme designed to help the Government work with the whole community to make Hong Kong one of the world's leaders in reducing waste and improving our efficiency in using resources. The fundamental basis of the Framework Plan is that which has helped to make Hong Kong the success it is today. Our emphasis will be on letting market forces work, by encouraging business opportunities and removing institutional constraints.

We have already made a good start in encouraging the source separation of recyclable materials and rapid expansion of these schemes continues. Separate collection of recyclable items and the provision of land specially for the recycling industry will help promote development of the local recycling industry. I shall elaborate on other issues tomorrow.

Today, Hong Kong is a very wasteful society. Our waste has huge economic, social and environmental costs. If we are to make our city a healthier, cleaner, more enjoyable and more sustainable place for ourselves and for our children, tomorrow we must start to reduce producing waste, start to make better use of our resources, and avoid the costs that we impose on society by our waste.

The Framework Plan that we will be setting out tomorrow has been drawn up with the help and advice of many in business, in environmental groups and in advisory bodies. Many of the initiatives have been started quietly, so what we announce tomorrow will be a wide range of activities already getting into their stride. I wish to take this opportunity to thank all those who have helped to bring the Framework together, and are already hard at work on its various components. I am greatly encouraged by the tremendous support for these initiatives that is apparent throughout the community, and I look for the support, the advice and the encouragement of this Council as we take forward the plan together in the coming years.

Thank you.

PRESIDENT (in Cantonese): Secretary for Health and Welfare.

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Madam President, first of all, I would like to thank Members for their speeches delivered last week as well as today.

From the views expressed by Members on medical and welfare policies, we can see that they are concerned with medical and social welfare services.

Recently, a number of people have asked me whether the Government would cut expenditure on medical and welfare services because of the change in the economic environment. Let me reiterate here that in the coming year, we will continue to inject substantial resources into improving various elderly, welfare and medical services. Also, the commitments we have made to service provision will not change. In particular, we will put into practice the highlights mentioned in the policy addresses over the past few years.

Elderly services

As far as elderly services are concerned, we are now undertaking on schedule a series of work as promised by the Chief Executive last year. It should be noted in particular that the Elderly Commission has submitted to the Chief Executive a report which recommends a comprehensive strategy to solve the problem pertaining to inadequate residential care institutions.

The Chief Executive has pledged to provide approximately 8 000 new subvented places in the next three years. We believe these places, in addition to the existing ones, can reduce the number of people on the waiting list as well as shortening the waiting time. In the long run, we have to ensure that the supply of residential care places can meet the demand of society. We have set up an inter-departmental working group to implement the site-selection policy so as to identify suitable sites for public and private residential care homes. We have made this the mainstay of our policy

As we plan to purchase places from private homes for the elderly, we will take various measures to ensure the quality of the bought places. We have, through the new Bought Place Scheme, asked the residential care homes taking part in the Scheme to raise the level of their services in terms of both manpower and space. In addition, they need to acquire licences as soon as possible before they are allowed to continue to take part in the Scheme. In the area of manpower training, the Social Welfare Department will strengthen its training programmes for health care personnel and organize new training classes next year. It will also formulate a set of criteria governing the standard of service in order to ensure that the elderly can enjoy quality services.

I also share the views of Mr TAM Yiu-chung in that with the ageing of the population, expenditure on elderly services will rise sharply. It is therefore unrealistic to meet all expenses by solely relying on taxation. For most advanced countries, this is also a thorny issue. In the long run, in order to develop comprehensive elderly services, we need to discuss and solve the issue as to how to secure sufficient funds to meet the rising expenditure. The Elderly Commission intends to discuss this issue shortly.

Welfare services

In the area of welfare services, in view of the recent weakening of our economy and the rise in the unemployment rate, we will step up existing family services by providing counselling and concrete assistance for families in difficulties. We will also deploy additional staff to provide battered children and their families with more comprehensive treatment and supporting services.

As regards rehabilitation services, we will provide 480 extra day and residential places for the disabled in the next fiscal year. In addition, we have planned to provide 3 000 extra places for various rehabilitation services in the coming few years.

Comprehensive Social Security Assistance

I would like to thank Members who have expressed their views on the review of the Comprehensive Social Security Assistance (CSSA) Scheme which is going to be completed shortly.

Over the recent years, there has been a sharp rise in CSSA expenditure, from $2.4 billion in 1993-94 to $9.4 billion last year. This year, CSSA expenditure is estimated to even exceed $13 billion, which means that the growth is five times in just five years. For a social security scheme which is not contributory in nature, the continuation of such a growth rate will pose a serious financial burden on the Government of the Hong Kong Special Administrative Region. The whole community must face this problem, and the Government must tackle it too.

Nevertheless, I would like to take this opportunity to reiterate that the objective of the CSSA Scheme is to provide a safety net for families with financial difficulties. This objective will not change because of this review.

Early this year, we conducted some studies on unemployed CSSA recipients and found that most of them hoped to find a job as early as possible. In this review, the Social Welfare Department will therefore propose a series of recommendations on how to provide assistance for the unemployed, with a view to enabling them to join the workforce to make their own living as early as possible. The review will be completed shortly, and it is expected that its findings will be published by the end of this year.

Medical services

Now I would like to turn to medical services. We have been attaching great importance to our health condition and implementing public health policies in concrete terms. We will also, in the light of the trend of global diseases and the local condition, increase resources to strengthen our capability in combating contagious diseases and improving food hygiene.

A number of Members have mentioned the pressure faced by medical staff. This is because of the increasing demand from the general public for public medical services. In the next five years, we plan to provide a total of 3 600 or so beds throughout Hong Kong, particularly in the New Territories where demands have been rising. These beds will be provided in North District Hospital, Tai Po Hospital, Tseung Kwan O Hospital which is under construction, Lai King Hospital in Kwai Chung District and Kowloon Rehabilitation Centre. We will also provide additional resources to meet the necessary recurrent expenditure when we provide these new beds. In the coming fiscal year alone, we will inject an additional funding of over $600 million to provide new beds.

Furthermore, we also plan to undertake a number of hospital-related development and improvement projects, including redeveloping Kowloon Hospital and Grantham Hospital, setting up a day operation centre at Prince Of Wales Hospital as well as fully expanding Pok Oi Hospital and establishing a new radiotherapy centre in Princess Margaret Hospital as mentioned in this year's policy address. These projects will enable the design of the hospitals to better cope with modern demands and facilitate the introduction of new medical technology and treatment procedures with a view to enhancing productivity. Although it is very important to satisfy the demands for existing services, the planning for long-term medical systems and financing are just as important too.

Now I would like to talk about the review of the medical system we are now conducting. The scope of the review is not confined only to the financing of medical care, the whole medical service framework is included as well. We will refer to the financing and delivery of medical services in other countries as well as their effectiveness, merits and demerits. It is hoped that we can, through this review, assess whether there is a need for us to reform the whole existing medical system in a substantial manner with a view to ensuring that our medical institutions can, in the long run, provide quality services for the public at a reasonable costs.

We plan to consult the public on this important issue in the middle of next year. The findings of the consultation will directly affect our medical policies and development of the medical system in the future.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, although not many Members spoke on security affairs in the debate on the policy address several days ago, they have raised some important points. I am glad that I have an opportunity today to respond to the main points raised by them.

To start with, I would like to talk about security. I believe all Members agree that this is a key topic. The maintenance of order is an extremely important factor that enables our society to maintain its prosperity and stability and continue to attract foreign capitals and tourists, as well as enabling the public to feel at ease to work and live in Hong Kong. In this respect, I greatly support Mr James TO's view that our security is fundamentally sound. The overall crime rate in 1997 is the lowest in 24 years. Although in the first nine months this year, several crimes have registered a rising tendency, the overall crime rate is still 0.8% lower than that of the corresponding period last year. Our crime rate is more or less the same as that of Singapore, but is lower than that of Tokyo, London and many major cities in North America. We should be very pleased with this.

Notwithstanding this, we should not be complacent. We must continue to step up our vigilance and constantly take new measures to combat crime to maintain Hong Kong in good order. For instance, in the area of combating triad societies and organized crimes, we plan to submit bills during the 1998-99 Legislative Session to amend the Organized and Serious Crimes Ordinance and the Drug Trafficking (Recovery of Proceeds) Ordinance. We will also step up combating money laundering activities, including requiring money changers and remittance agencies to adopt some necessary measures against these activities, and strengthen the relevant ordinances to enable the law enforcement agencies to investigate and prosecute crimes related to money laundering in a more effective manner.

Just as pointed out by Mr James TO, in order to tackle more effectively the increasingly complicated criminal activities of the intelligent type, the Police Force must adopt advanced technologies to combat crime. As a matter of fact, the Police Force have spent more than $350 million on implementing an information system strategy to raise its efficiency in preventing and detecting crimes by taking advantage of modern information technology. These advanced systems include the Computer Assisted Fingerprint Identification System, identikit picture and modus operandi computer system, all of which are expected to be completed by the middle of next year. Through these systems, we will be able to streamline the crime detection procedures and speed up the sharing of information within the Police Force so as to enhance the overall Force efficiency.

Furthermore, we will submit bills to the Legislative Council during this Legislative Session with a view to enacting legislation to provide that the police can, in the course of investigating serious crimes such as rapes, take intimate samples such as blood or semen, or non-intimate samples such as hair and nails through a stringent judicial warrant process. We believe these samples can greatly enhance the police's capability in crime detection. We propose to adopt the judicial warrant mechanism because we believe this mechanism can enable us to strike a balance between the protection of individual rights and the enhancement of the ability of law enforcement agencies. In fact, the practice of detecting crime by employing sophisticated technology has been widely adopted by advanced countries in the world.

With the global tendency of "integration", we must strengthen our co-operation with law enforcement agencies in other places so as to combat some cross-boundary crimes and international criminal syndicates. One good example is that the police have recently succeeded in smashing a large drug-trafficking syndicate in collaboration with the Australian Federal Police. I am very pleased to announce that we have proposed to the Australian Government to set up an overseas police liaison post in the Hong Kong Economic and Trade Office in Sydney. This will enable us to further strengthen our co-operation with the Australian Government in combating serious economic crimes, such as drug-trafficking, money laundering, commercial fraud and the like. We are told that the Australian Government welcomes this proposal in principle.

We can assure Members that we will make unceasing efforts to maintain Hong Kong as one of the safest cities in the world.

Apart from security, I would also like to respond to a few points raised by Members in connection with the efforts we make to facilitate the people of Hong Kong travelling abroad. First of all, I would like to assure Members that we will continue to make positive efforts to facilitate Hong Kong Special Administrative Region (SAR) passport holders to travel abroad. At present, 55 countries have given SAR passport holders visa-free treatment. For a new passport which has only come into being for just more than a year, this number is in fact hard to come by. But we think this is still insufficient because the people of Hong Kong can be found in every corner of the world. To help Hong Kong explore overseas markets, develop economic and trading relations, or purely for sight-seeing or study tours, we need to ask more countries, particularly Member States of the European Union (EU), to give SAR passport holders visa-free treatment. In this respect, the Chief Executive, Chief Secretary for Administration and Financial Secretary have, on different occasions, asked leaders or ministerial officials of these countries to grant us visa-free treatment. This request has successfully gained support from some EU countries. But as some Member States of EU and the Schengen Convention do not yet fully understand the stringent immigration control exercised here, we expect we still need to do a lot of lobbying. In the coming years, we will adopt a "multi-pronged" approach to make the relevant officials of the European countries to better understand our immigration control and passport issuing system, so as to achieve our objective of seeking the EU to grant SAR passport holders visa-free arrangements.

Lastly, I noted the remarks made by Mr HUI Cheung-ching in connection with the inconvenience experienced by the people of Hong Kong when applying for visas for travel to some Middle East countries. This is because these countries have not set up consulates in Hong Kong. Although the setting up of consulates in Hong Kong by foreign countries falls into the foreign affairs jurisdiction responsible by the Central Government, we have reflected the people's views in this respect to the Central Government. I am pleased to inform Members that we learned from the Office of the Commission of the Ministry of Foreign Affairs that the Central People's Government has reached an agreement with the consuls of Saudi Arabia and United Arab Emirates to allow the two countries to set up consulates here, and is holding talks with another Middle East country. After these countries have set up consulates in Hong Kong, our citizens will find it more convenient to travel to these places.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Constitutional Affairs.

SECRETARY FOR CONSTITUTIONAL AFFAIRS(in Cantonese): Madam President, in this motion debate, many Honourable Members have expressed their valuable views on the review of district organizations including the proposals for structural changes. In this connection, I have noticed that while a number of Members are holding views very much similar to ours, there are also others who think quite differently. Given the significant reforms involved in our proposals for changes to the structure of district organizations and their municipal functions, it should come as no surprise that this council would have divergent views on the question. We hope to gradually resolve the difference of opinion and eventually reach a consensus with Honourable Members through the Legislative Council Panel on Constitutional Affairs and other channels in the coming few months, with a view to devising jointly with this Council a new structure to be responsible for enhancing food safety and environmental hygiene, promoting development in such fields as arts and culture and sports and recreation, and fostering the administrative and consultative work at the district level, thereby coping better with the long term development of Hong Kong and braving different challenges in the future.

Timetable for restructuring

Some commentators find the review of district organizations including the proposals for structural changes too radical on the ground that the decision to dissolve the two Municipal Councils by the end of next year was already made when details of the new structure have yet to be finalized.

I hope Members could understand the limitations confronting us. Under the existing legislation, the term of office of Members of the two Provisional Municipal Councils and the 18 Provisional District Boards will expire by 31 December 1999. Since we do not wish to see any discontinuance of service or the unnecessary extension of any provisional bodies, we must strive to have the planning for the new structure ready before the end of 1999; otherwise, we would not be able to have a more capable structure to provide Hong Kong with better and more cost-effective services as we move into the next century.

The end of 1999 is 14 months away, but we do have a lot of preparatory work to do during this period. In this connection, the consultant report regarding the new structure responsible for food safety and environmental hygiene has largely been completed, and we are now studying the recommendations carefully and will provide the Panel on Constitutional Affairs with more details of the new structure in due course.

As regards the structure responsible for functions of arts and culture and sports and recreation, the Secretary for Home Affairs has already commissioned a consultancy study to look into the issue in detail; besides, the part of the community engaged in fields of arts and culture and sports and recreation as well as local bodies will also be consulted shortly. The details will hopefully be finalized by the end of the year or early next year.

We are now drafting the laws to provide for the electoral arrangements for the new district boards, and we expect to present the relevant bills to this Council for consideration before the end of the year. since election would involve such arrangements as constituency delineation, subsidiary legislation enactment, as well as other practical work, we will strive to have the relevant bill passed by February next year, with a view to conducting the first district board election of the Special Administrative Region by the end of next year as scheduled.

A major reorganization of an executive department will naturally give rise to a number of administrative and financial arrangements. Therefore a special task force will be established shortly to take charge of the work involved.

Despite the tight schedule, we believe we would overcome the difficulties and complete our task before the end of next year if we could join hands and work hard together.

Comprehensive consultation and full respect for public opinion

Despite the limited time available for this review, we have made our best effort to consult the public and try to understand their views through all possible channels. In addition to attending council meetings of all levels and contacting relevant bodies and individuals, my colleagues and I have also participated in more than 20 public activities to listen to the public. Such activities include seven local consultation meetings held by district offices, 10 phone-in radio programmes, as well as seven seminars and forums held by television or radio stations. Apart from public distribution, both the consultation document and the report of the review have also been placed on the homepage of the Constitutional Affairs Bureau for public information. In addition, the views collected during the consultation period have also been assimilated and printed in a booklet for public reference. We understand it very well that not only the whole consultation process has to be conducted openly but a high degree of transparency has to be demonstrated as well.

While different people would interpret the public opinion differently, but an undeniable fact is that as indicated clearly in a survey conducted by a university research institute, the public generally believe the Government should take up the responsibility for food safety and environmental hygiene. If Members have noted the public opinion conveyed through written submissions, phone calls or even E-mail, they should be aware that the majority of the public agrees to the Government's setting up a new structure to enhance food safety, environmental hygiene and services on cultural and recreational fronts.

It is the public expectation that those involve in governance, both government officials and Members of the Council alike, should attach utmost importance to public interests. Besides, the public also expects us to achieve a consensus and join efforts sincerely to formulate a blueprint for the new structure, with a view to upgrading further the quality of services.

Tendency towards a streamlined council structure

Some Members of this Council and members of the public have regarded the government decision to dissolve the two Provisional Municipal Councils as a retrogression in democracy. However, as we review the role of the two Municipal Councils, we could not neglect the representative government system in Hong Kong as a whole. With the gradual enhancement of the elected elements in this Council and the maturing of the 18 district boards, the political importance of the Municipal Councils will inevitably be reduced. This is in fact a commonly agreed conclusion. Moreover, there has also been the opinion that Hong Kong is too small and too compact a city for a three-tier representative structure, streamlining the existing structure into a two-tier one comprising the Legislative Council and the district boards should therefore be a reasonable direction for development.

We have also noted that some western countries or cities have been making efforts to streamline the structure of local representative councils. For instance, in Toronto, Canada, the local government there has undergone restructuring and combined the two-tier structure into a single tier one, thereby establishing a more centralized form of administrative structure. Besides, it has also been an on-going practice in a number of European countries to review and streamline the structure of the local councils. The objective behind our review of district organizations is quite similar to that of those western countries and cities, which is to provide the public with more efficient and more cost effective services through a streamlined structure.

Impact of dissolution of the two Municipal Councils on political parties

There has been the view that the dissolution of the two Municipal Councils will cause political parties not only to have fewer opportunities to nurture capable members but also to receive lesser income, which would in turn hinder the development of political parties.

I understand that quite a number of the Members of the two Provisional Municipal Councils have political affiliations, yet most of them are also members of district boards or Members of this Council. In other words, they should have plenty of opportunities to participate in politics even after the dissolution of the two Municipal Councils. Moreover, we are now considering increasing the number of District Board Members in future as well as raising the upper limit of the accountable allowance for District Board Members in renting offices and recruiting assistants. On the other hand, the consultative role and supervisory functions of the district boards will also be enhanced. All these changes will certainly be of help to political parties in their endeavours to promote their work at the district level. Therefore, I hope that political parties will not adopt a pessimistic attitude towards the proposal for structural changes, as that would cause them to overlook the positive side of the issue.

Conclusion

Structural reform has all along been a difficult task and is largely dependent upon the interests and needs of various parties concerned. As in other successful reform exercises, our target has been set at taking into account and balancing the various needs, as well as putting into the first place the interests of the community as a whole. We will certainly be meeting obstacles along the way, but we will also be meeting many new opportunities at the same time. The title of the policy address has pointed out correctly that so long as we could join hands to work hard together, we will certainly be able to turn adversity into opportunity.

Thank you, Madam President.

PRESIDENT(in Cantonese): Secretary for Justice.

SECRETARY FOR JUSTICE: Madam President, in her speech on the Motion of Thanks, the Honourable Miss Margaret NG touched upon a number of issues relating to the legal profession and the administration of justice. I would like to reply to some of her comments.

The legal profession

First, the legal profession. The Administration regrets the fact that many practitioners, like other members of the community, are suffering from the economic downturn. Those who, in the past, mainly provided conveyancing services are worst hit. This is inevitable when the volume of property transactions declines drastically. No system of mandatory scale fees could, or should, keep conveyancing fees at an artificial level. As Miss NG said, "The cost of services must be allowed to find its own level".

The Administration supports the profession's efforts to build up a strong local legal profession with highly competitive skills and exposure. It has been taking the lead in removing restrictive practices and anti-competitive rules that have, in the past, been barriers to such a development. It supports the efforts of the President of the Law Society to encourage solicitors to diversify their practices and to specialize. It also welcomes the plans of the Bar Association to remove criteria for the admission of barristers that are discriminatory and protectionist.

The Administration has, for many years, been promoting a more long-term view of the legal profession, for example, by initiating the debates on the admission of foreign lawyers, and on multi-disciplinary practices. There are now encouraging signs that the professional bodies accept the need to find ways of delivering legal services that are more cost-effective, competitive and convenient for consumers. I am sure that this can be done without sacrificing professional standards or independence. On many occasions, I have discussed with and encouraged members of the profession to explore into the field of mediation and insolvency practice and made suggestions for the training and qualification of mediators. I shall continue efforts in the promotion of these areas of practice.

With regard to legal education and professional qualifications, the Administration supports the efforts of the universities and the profession to introduce improvements in these areas. This support is conveyed through various channels, such as my membership of the Chief Executive's Advisory Committee on Legal Education, and my department's representation on working parties relating to professional education. We share a common goal of ensuring that our future lawyers will have the knowledge, skills, principles and vision to make Hong Kong the leading centre for legal services in this region.

The rule of law

Miss NG also discussed the rule of law. She asserted that this Government has shown "scant respect for the rule of law". This assertion is totally unjustified and is rejected by the Administration. I am afraid that the examples of disrespect for the rule of law given by Miss NG are misconceived.

Let us consider her so-called examples. First ─ and I quote ─ "The ill-founded interference with the Rules of Procedure of this Council". As Members know, the Administration considers that some aspects of the Rules of Procedure do not comply with the Basic Law. This being so, the Administration informed this Council of its views in order that the Council could consider amending the rules. This was an attempt to ensure the observance of the rule of law, not "interference" or disrespect for the rule of law.

The second so-called example given was the proposal to abolish the Municipal Councils. As Members know, that proposal has been the subject of a public consultation exercise and the Municipal Councils can only be abolished in accordance with properly enacted legislation. We need the blessing of this Council. Everything is being done in accordance with the law and proper procedures. The Administration has not been, and will not be, disrespectful of the rule of law in this exercise.

The third so-called example given is the Government's refusal to disclose its shareholdings in listed companies following the intervention in August. As Miss NG mentioned in her speech, officials have told this Council that the Government is not bound by the Securities (Disclosure of Interest) Ordinance. This reflects the legal advice given by my Department. Miss NG may disagree with that advice. But, by alleging that the Government is disrespectful of the rule of law, Miss NG equates the rule of law with the rule of her interpretation of the law. This is not fair.

The Administration has made it clear on innumerable occasions that it is committed to the rule of law. If it ever contravenes the rule of law, there will be an outcry. If the Administration ever acts unlawfully, it will be hauled before the courts. However, by alleging disrespect for the rule of law when there is none, Miss NG devalues the meaning of that concept. I am sure that this cannot be her intention.

Adaptation of laws

Another important subject mentioned by Miss NG was the adaptation of section 66 of Cap. 1. Regrettably, she misrepresented the effect of that adaptation. It did not, as she stated, make the "State" not bound by Hong Kong laws. What it did was to adapt the principle that the "Crown" is not bound by an Ordinance unless it contains an express provision, or a necessary implication, that it is bound. Much of the public concern over that adaptation has been caused by a misunderstanding of its nature and effect. I look to members of the legal profession to correct, and not contribute to, that misunderstanding.

The question whether the adaptation of section 66 was consistent with Article 22 of the Basic Law continues to be debated. The Administration has explained, and will continue to explain, why it considers that it is so consistent. Its basic position is that the principle in section 66 was not abolished by the Basic Law, but merely needed to be adapted. Recently, after several months of consideration, the Law Society announced that it agrees with the Administration's basic position.

In adapting the rest of the statute book, the Administration will build upon that position. The adaptation programme is not an exercise in law reform.

Before I move on to another topic, I would like to make it clear that I welcome a lively discussion on the issues I have mentioned. The rule of law and the adaptation of laws programme are matters of great importance to the community. I encourage anyone who is interested to participate in the debate. Although I have explained why I disagree with some of Miss NG's comments, I would be the last one to discourage her from seeking to uphold the rule of law. I share her objectives, even though I may sometimes disagree with her comments.

The Solicitor General

Madam President, the Honourable Miss Emily LAU, Dr the Honourable YEUNG Sum, and the Honourable James TO commented on the selection of the next Solicitor General.

Until the identity of the next Solicitor General is formally announced, I cannot comment on his or her qualities. However, I can assure Members that the recruitment of the Solicitor General has been conducted in strict accordance with the criteria and procedures of the Civil Service. The duties attaching to the post were set out in the advertisement inviting applications. This also explained that candidates should:

	-	be qualified either as barristers or solicitors in a recognized jurisdiction;

	-	possess considerable knowledge and experience of legal practice in Hong Kong at a senior level;
	-	possess an ability to produce constructive ideas for the development of legal policy;

	-	possess excellent qualities of judgement and leadership, and management experience will be a considerable advantage;

	-	have good communication and inter-personal skills;

and that an ability to speak, read and write Chinese would be a clear asset.

These criteria were applied strictly by the Selection Board. The Board interviewed a total of 10 candidates including both internal and external applicants. This was a departure from previous practice whereby only external candidates were interviewed and internal candidates were assessed according to their annual performance appraisals. The decision to interview all candidates was to provide an equal opportunity to all and to ensure uniformity of assessment. All candidates were invited to give their views on the role of the Solicitor General and how they perceived the future development of that office.

The Board was chaired by me with members drawn from the Civil Service Bureau and the Department of Justice. The Chairman of the Public Service Commission took part as observer. The Board has put forward its report to the Civil Service Bureau. An announcement will be made following the completion of appointment procedures.

Regardless of who the successful candidate may be, there is no reason why a person's political views or status should be an obstacle to appointment as Solicitor General. I am surprised that ......

MR ANDREW WONG (in Cantonese): Madam President, in accordance with Rule 39 of the Rules of Procedure, I wish to ......

PRESIDENT (in Cantonese): Mr WONG, you have to indicate first whether you have a point of order or whether you are seeking an elucidation.

MR ANDREW WONG (in Cantonese): Madam President, I wish to interrupt in accordance with Rule 39 of the Rules of Procedure.

PRESIDENT (in Cantonese): Do you have a point of order or are you seeking an elucidation?

MR ANDREW WONG (in Cantonese): Madam President, I would like to explain a little bit, since I once requested ......

PRESIDENT (in Cantonese): Mr WONG, please answer my question first.

MR ANDREW WONG (in Cantonese): I am seeking an elucidation.

PRESIDENT (in Cantonese): You are seeking an elucidation. That means you are asking the Secretary for Justice ......

MR ANDREW WONG (in Cantonese): I am seeking an elucidation from the Secretary for Justice in accordance with Rule 39 of the Rules of Procedure.

PRESIDENT (in Cantonese): You are seeking an elucidation from the Secretary for Justice. Please be seated first. In accordance with the Rules of Procedure, I must first ask the Member or government official who is speaking. That is a matter of courtesy to any Member or official who is speaking.

Secretary for Justice, are you willing to let Mr WONG interrupt and seek an elucidation from you? You may choose to let Mr WONG interrupt or continue speaking.

SECRETARY FOR JUSTICE (in Cantonese): Madam President, may I continue speaking, before listening to what Mr WONG wants to seek elucidation of?

PRESIDENT (in Cantonese): In accordance with the Rules of Procedure, you may continue.

SECRETARY FOR JUSTICE: Regardless of who the successful candidate may be, there is no reason why a person's political views or status should be an obstacle to appointment as Solicitor General. I am surprised that objection to a candidate's political inclination should come from those Honourable Members who have always advocated freedom of conscience. Furthermore, I give my assurance that the person recommended for appointment by the Selection Board was not chosen because of the political position he or she has taken.

Thank you, Madam President.

PRESIDENT (in Cantonese): I would like to remind Members that if they wish to interrupt a Member or government official who is speaking, they must first indicate whether they are seeking an elucidation or whether they have a point of order. That was why I asked Mr WONG repeatedly what he wished. Finally, Mr WONG indicated that he wished to ask the Secretary for Justice to elucidate the content of her speech. According to the Rules of Procedure, the government official or Member speaking has a right to decide whether he is willing to elucidate. Just now the Secretary for Justice expressed her willingness to elucidate. I now call upon Mr Andrew WONG to raise the matter that he would like the Secretary for Justice to elucidate. Mr WONG.

MR ANDREW WONG (in Cantonese): Madam President, I wish to seek an elucidation in accordance with Rule 39 of the Rules of Procedure. Just now you asked me at once whether I wished to seek an elucidation or whether I had a point of order.

I am just seeking a simple clarification. In the process of selecting a civil servant ─ even someone employed on a contract basis is a civil servant, is there a procedure known formerly as a "vetting procedure" to determine whether the candidate is a suitable person? For instance, if he has been active or has occupied a senior post in certain political parties, he would be deemed as unsuitable. In the course of this selection, has this criterion been taken into account or has this criterion been abolished?

PRESIDENT (in Cantonese): Secretary for Justice, in accordance with Rule 39 of the Rules of Procedure, Mr WONG may ask you to elucidate some matter related to the content of your speech. Mr WONG has raised the matter he wishes to seek an elucidation of. Are you willing to reply?

SECRETARY FOR JUSTICE (in Cantonese): Madam President, in my speech, I already said that the procedure was in strict accordance with the recruitment procedures and rules of the Civil Service. Just now I also explained to Members the requirements for the post of the Solicitor General. Our recommendation to the Public Service Commission strictly complied with the recruitment procedures and requirements of the Civil Service.

PRESIDENT (in Cantonese): Mr Andrew WONG.

MR ANDREW WONG (in Cantonese): Madam President, this is the whole point of my question. Apart from the requirement to pass an examination which proves whether one is suitable for the job, will the Administration consider other qualifications which are suitable or unsuitable? As for the vetting procedure that I mentioned, does it still exist or has it been abolished?

PRESIDENT (in Cantonese): Mr Andrew WONG, I now rule that this Council will not discuss this matter further. If you are interested, you can certainly ask this question during question time.

PRESIDENT (in Cantonese): Chief Secretary for Administration.

CHIEF SECRETARY FOR ADMINISTRATION (in Cantonese): Madam President, Honourable Members, first of all, I would like to thank Members for their comments on the policy address.

It has been noted often in the past that this debate is always a special occasion in Hong Kong's political calendar.

We should remind ourselves of the fundamentals of the process in which we are engaged. Basically, this debate provides Honourable Members with the opportunity not only to respond to the Chief Executive's annual policy address, but also serves as a forum to air their views on the general situation in the Hong Kong Special Administrative Region, to express their hopes and put forward their ideas for the future. It is my responsibility to reply on behalf of the Administration, to expand on what the Chief Executive has set out in his address and, more formally, to thank Members for their support or to urge Members to give us their support.

This follows a long Hong Kong tradition and is one of those events which marks the continuity of our system of government following the transition. The publication of the policy address is a key event in the legislative programme because it is the platform from which our head of government reports on the progress over the past year, sets out plans and proposals for the coming year and, more importantly, ensures that the community is kept fully informed of the Government's long-term goals and ambitions. By definition, the annual policy address must reflect the situation of the day. It must address that situation in a realistic manner.

This year's address has conveniently met those requirements. And while it did not meet the expectations of all Members and indeed certain members of the community, the crux of much of the criticism is the complaint that the Chief Executive has not come up with instant solutions to the problems which are facing Hong Kong and, indeed, the rest of Asia and many other parts of the world since July last year when the collapse of the Thai Baht produced a domino effect all over the region and beyond.

Madam President, in my view a simple recognition of that fact should have been central to this debate. If we are honest with ourselves, we know that all else flows from there. So, just as last year's policy address set a visionary and positive tone for our future in the wake of an extremely successful tradition, this year's address was soberly precise in its analysis of the current situation, pragmatic in its approach to tackling our problems, yet forward-looking and responsible in taking some of the concrete steps we need to find a new niche for ourselves in an ever-changing global economy. The longer-term initiatives strengthen our fundamentals to better equip Hong Kong for a rebound when our neighbouring economies start picking up again. There were no surprises, no gimmicks, no political sleight of hand. The community would have quite rightly censured us had there been any attempt to pull mystical rabbits out of the hat.

Given the seismic economic shifts that we have witnessed over the last year, their global implications, and the cuts and bruises that have been inflicted on Hong Kong in the process, I believe the community wants to see a coming together of its leadership so that we can tackle the issues we face in a united and coherent way. That is not to exclude differences, or lively and robust debate. That is the Hong Kong way. But I am sure the community does not want to see a "them" and "us" divided. They would prefer partnership to polarization; constructive criticism, not castigation; solutions, not sound bites.

The Chief Executive was careful to take into account many views, including those of Members, in putting together his policy address. But I think the community is well aware that there is no simple solution to our current woes. If there was, your Administration would have warmly embraced it by now. I am hence most grateful to those Members of this Council and members of the community who appreciate that there is no quick fix for some of the problems confronting Hong Kong. I appreciate their understanding of our pragmatic approach in seeking to ease the adverse effects in the short term with the view to strengthening our system so that we are more resilient and better equipped in the future. Nevertheless, this is not to say we are bereft of ideas or concern — far from it.

My colleague, the Financial Secretary spoke earlier in this debate. It is clear from all he has said and what we have done that we have creatively and sensitively tested the limits of our prudent fiscal and economic policies in both his annual Budget and the additional packages of relief measures which were introduced in May and June this year. Further, surely nobody can now be in any doubt about our determination to defend the currency link which, in our view, is at the core of the economic well-being of this community.

I was pleased to see the response to the Financial Secretary's Budget consultations. Specific ideas are coming forward; I am sure the Financial Secretary will pay them close attention, just as he has always done in framing his Budgets and, indeed, the other measures which have been taken.

Madam President, we shall continue to be a responsive and listening government. In view of the concerns expressed by Members, we shall try to improve and strengthen our relationship with the Legislative Council, although I think some of these concerns owe more to perception than reality. Nonetheless, we will do what we can to enhance the existing channels of communication. Our goal remains to establish a constructive partnership with the Legislative Council on the basis of mutual understanding and co-operation. The alternative is stand-off and legislative gridlock. That is not what we are here for. That is not the way to serve our community.

This seems like an appropriate reminder to put this matter in perspective, and ask ourselves whether our relationship is quite as difficult and as tense some have suggested. For my part, I feel only the constructive tension which is an inherent part of the relationship, and I view that positively. My colleagues and I understand and respect our constitutional obligation to be accountable to this legislature. Furthermore, we understand that in being accountable, by joining with you in debating, defending and explaining our proposals, policies and decisions which affect the public interest, we stand a far greater chance of having them understood, accepted and supported by the community at large.

The fact of the matter is that, we work closely with the Legislative Council on a day to day basis. Twenty-seven financial proposals, 12 bills and over 100 pieces of subsidiary legislation have been put forward for scrutiny and approval since the start of the current term. We have answered more than 500 oral, supplementary or written questions raised by Members at Council meetings. We have attended more than 70 panel meetings at the invitation of Members. That is not to say that we are concerned only with the quantity of work. In fact, we place utmost importance on the actual effects of our proposals and plans. At the end of the day, securing the support of this legislature and through it, the support of the community is what matters. Nonetheless, the figures I have cited should help to put things in perspective as they are indicative of the time we put in responding to Members' concerns and how we engage Members in the governance of Hong Kong.

We are keenly aware that the legislature can, and does, use its powers to keep the executive under scrutiny and keep it in check through questions, inquiry and debates. We are fully aware, occasionally painfully aware, that we cannot take Members' support for granted. Members who have been on the receiving end of our lobbying efforts can testify to that.

Madam President, there are differences of opinion between the Administration and the legislature as to how the Basic Law should apply in the operation of the legislature insofar as the Legislative Council Rules of Procedure are concerned. This search for the intended purpose of the Basic Law in outlining the division of labour between the executive and the legislature is an inevitable process, particularly when a new constitutional framework is at work under the Basic Law for the first time in our history. We shall continue to engage Members in a constructive dialogue on this issue. Indeed, we are in a new era, with a new constitutional document which we are bound to observe. Whatever views some Members may hold about various aspects of that constitutional document, there is no argument that it is the basis on which we function. In a society which lives by the rule of law, it can be the only basis. And while I fully understand that we must always aspire to a more ideal world, experience tells us that in the meantime we must live in the real world, and make the best of what we have.

As far as the relationship between the executive and the legislature is concerned, I do not intend to go into chapter and verse of the Basic Law. I am sure Members know Articles 64 and 73 backwards. In essence, while different roles, functions and positions are set down for the executive and the legislature, the Basic Law also envisages a close and interlocking relationship between the two.

It is hardly surprising that with different mandates for the same portfolios that the executive and legislature may not see eye-to-eye on each and every issue: a phenomenon not uncommon in many democracies. That should not override our common purpose in doing our best for the people of Hong Kong. This Administration is big enough to take criticism ─ we claim no monopoly on wisdom ─ but, as one of the local papers noted in commenting on this debate, criticism is always that much more convincing when it is offered along with viable alternatives.

I would like to deal with the suggestion raised by a few Members that a ministerial system is the best way to improve the relationship between the executive and the legislature. I am not convinced that this is the panacea they have in mind. This is an issue which requires careful and thorough consideration within our constitutional framework. The Basic Law has set out the blueprint for the political development of Hong Kong in the next 10 years. This includes, inter alia, the system for appointing principal officials. We should work according to this blueprint and give it a fair wind before considering whether to introduce changes.

Madam President, I would also like to speak about the Civil Service, which I have the honour to lead. We have taken our fair share of criticism over the last 12 months, and I would like to respond to that. The Asian financial turmoil and a number of other crises such as the avian influenza and problems at the new airport have presented serious challenges to the Civil Service in the past year. In most instances, we managed to bring the situation under control in a timely and effective way. Most recently, the Civil Service came under close scrutiny again during the intervention in financial markets when we managed to avert financial disaster by fighting off market manipulators. I believe there was a community support for that decisive action, just as there is a much greater understanding and support now in the international markets.

But there are things that we could have done better. For example, we over-estimated our capacity to eliminate the entire chicken population, although it is not every day that governments are asked to kill 1.5 million chickens. And we under-estimated the severity and scale of the economic impact of the Asian financial turmoil during its early stages. We are determined to learn from these experiences.

Despite such problems, the Civil Service as a whole remains dedicated to serving the community with professionalism and loyalty. There is no question of not giving the best to win the support of the community nor not listening to the concerns of the community. Hong Kong continues to be one of the safest and least corrupt cities in the world, due in no small part to the integrity and determination of the Civil Service at all levels.

In the current economic situation, the community expects to get maximum value from available resources. It also expects the Administration to increase the provision of public services in response to the growing demand from those in need.

The public sector needs to respond quickly and decisively in the best interests of the public. We shall strive to maintain the level and quality of the existing services which are in demand. At the same time, we must find ways to preserve our ability to fund new initiatives and to cope with increasing demands in the years ahead with government expenditure expected to grow more slowly in the short to medium term.

The launching of an Enhanced Productivity Programme underlines our commitment to stimulating a culture for productivity improvements in the Civil Service. Instead of relying solely on additional resources to implement new or improved services, heads of departments are required to cut down their expenditure by delivering productivity gains amounting to 5% of their operating costs by the year 2002.

In return the heads of departments will be given the flexibility and authority required to embark on cost-effective deployment of resources taking account of overall government priorities and policies. Staffing flexibility will also be introduced to enable departments to use short-term or contract staff on terms and conditions of employment tailored to suit different operational environments and to engage outside expertise in a timely and appropriate manner.

The success of this Programme depends on the sustained efforts of managers and staff at all levels. It also requires a clear and shared vision in the Civil Service to continue to be accountable and responsive to the changing needs of the community.

I have personally briefed all senior colleagues on the underlying philosophy which will drive the productivity enhancement movement. The two resource bureaux have drawn up programmes to reach out to all heads of departments and have met with the Central Staff Consultative Councils with a view to developing innovative measures to further enhance the productivity of the Civil Service. With these concerted efforts, I am confident that the Civil Service will rise above all the challenges and contribute to building a better future for the community they serve.

Madam President, I would like to end by reporting to this Chamber how on my just-completed official visit to Europe I encountered so much support, understanding and goodwill for Hong Kong. Everywhere I went, London, Rome or Milan, people at the highest levels of government and business displayed great interest in our progress since the transition, and were keenly aware of the way in which we are managing the issues arising out of the fallout from the Asian financial turmoil.

There was a genuine confidence in our ability to handle these problems and a firm belief that Hong Kong will continue as a strong community and a valued law enforcement and business partner. There was a recognition of our strengths as a free society with an open economy underpinned by the rule of law.

I have to say I was much encouraged by the confidence others have demonstrated in Hong Kong and in the ability of our community to overcome the challenges we now face. I share that confidence. I believe that so long as we unite as a community, as we have done so often in the past, and draw upon our strengths of creativity, determination and resilience, we will return to our winning ways sooner rather than later.

Madam President, thank you very much.

PRESIDENT (in Cantonese): I now call upon Mr LEE Cheuk-yan to move his amendment to the motion. Mr LEE Cheuk-yan.

MR LEE CHEUK-YAN (in Cantonese): Madam President, I move that Dr the Honourable LEONG Che-hung's motion be amended, as set out on the Agenda.

Mr LEE Cheuk-yan moved the following amendment:

"To add ", but since the Chief Executive has not only failed to admit the Government's policy blunders in the past year, review them seriously and account for them, but has also failed to propose in the Policy Address effective measures to promote democracy, restore the economy, ease unemployment and improve people's livelihood, thereby further undermining public confidence in the Government's administration of various policies, this Council expresses deep regret" after "That this Council thanks the Chief Executive for his address"."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment moved by Mr LEE Cheuk-yan, as printed on the Agenda, be made to Dr LEONG Che-hung's motion.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese):Those against please raise their hands.

(Members raised their hands)

Mr CHAN Wing-chan rose to claim a division.

PRESIDENT (in Cantonese): Mr CHAN Wing-chan has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please register their presence by pressing the top button and then proceed to vote?

PRESIDENT (in Cantonese): Before I declare that voting shall stop, are there any queries? If not, the result will now be displayed.

Functional Constituencies:

Mr Michael HO, Mr CHEUNG Man-kwong, Mr SIN Chung-kai and Mr LAW Chi-kwong voted for the amendment.

Mr Kenneth TING, Mr James TIEN, Mr Edward HO, Dr Raymond HO, Mr Eric LI, Mr LEE Kai-ming, Dr LUI Ming-wah, Mrs Selina CHOW, Mr HUI Cheung-ching, Mr CHAN Kwok-keung, Mr Bernard CHAN, Mr CHAN Wing-chan, Dr LEONG Che-hung, Mrs Sophie LEUNG, Dr Philip WONG, Mr WONG Yung-kan, Mr Howard YOUNG, Mr LAU Wong-fat, Mrs Miriam LAU, Mr Timothy FOK, Mr FUNG Chi-kin and Dr TANG Siu-tong voted against the amendment.

Miss Margaret NG and Mr Ambrose CHEUNG abstained.

Geographical Constituencies and Election Committee:

Miss Cyd HO, Mr Albert HO, Mr LEE Wing-tat, Mr LEE Cheuk-yan, Mr Martin LEE, Mr Fred LI, Mr James TO, Mr LEUNG Yiu-chung, Dr YEUNG Sum, Mr LAU Chin-shek, Miss Emily LAU, Mr Andrew CHENG and Mr SZETO Wah voted for the amendment.

Miss Christine LOH, Miss CHAN Yuen-han, Mr Gary CHENG, Mr Andrew WONG, Mr Jasper TSANG, Mr LAU Kong-wah, Mr TAM Yiu-chung, Mr David CHU, Mr HO Sai-chu, Mr NG Leung-sing, Prof NG Ching-fai, Mr MA Fung-kwok, Mr CHAN Kam-lam, Mr YEUNG Yiu-chung, Mr Ambrose LAU and Miss CHOY So-yuk voted against the amendment.

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 28 were present, four were in favour of the amendment, 22 against it and two abstained; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 30 were present, 13 were in favour of the amendment and 16 against it. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): I now call upon Miss Christine LOH to move her amendment to the motion. Miss Christine LOH.

MISS CHRISTINE LOH: Madam President, I move that Dr LEONG Che-Hung's motion be amended, as set out on the Agenda.

Miss Christine LOH moved the following amendment:

"To add "but is of the view that various policy areas were not well-developed or neglected, thereby losing an opportunity to increase public confidence" after "That this Council thanks the Chief Executive for his address"."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment moved by Miss Christine LOH, as printed on the Agenda, be made to Dr LEONG Che-hung's motion.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Miss Christine LOH rose to claim a division.

PRESIDENT (in Cantonese): Miss Christine LOH has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please proceed to vote?

PRESIDENT (in Cantonese): Before I declare that voting shall stop, Members may wish to check their votes. If there are no queries, the result will now be displayed.

Functional Constituencies:

Mr Michael HO, Mr CHEUNG Man-kwong, Mr SIN Chung-kai and Mr LAW Chi-kwong voted for the amendment.

Miss Margaret NG and Mr Ambrose CHEUNG abstained.

Geographical Constituencies and Election Committee:

Miss Cyd HO, Mr Albert HO, Mr LEE Wing-tat, Mr LEE Cheuk-yan, Mr Martin LEE, Mr Fred LI, Mr James TO, Miss Christine LOH, Mr LEUNG Yiu-chung, Dr YEUNG Sum, Mr LAU Chin-shek, Miss Emily LAU, Mr Andrew CHENG and Mr SZETO Wah voted for the amendment.

Miss CHAN Yuen-han, Mr Gary CHENG, Mr Andrew WONG, Mr Jasper TSANG, Mr LAU Kong-wah, Mr TAM Yiu-chung, Mr David CHU, Mr HO Sai-chu, Mr NG Leung-sing, Prof NG Ching-fai, Mr MA Fung-kwok, Mr CHAN Kam-lam, Mr YEUNG Yiu-chung, Mr Ambrose LAU and Miss CHOY So-yuk voted against the amendment.

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 28 were present, four were in favour of the amendment, 22 against it and two abstained; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 30 were present, 14 were in favour of the amendment and 15 against it. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Mr Martin LEE, you may now move your amendment to the motion.

MR MARTIN LEE (in Cantonese): Madam President, I move that Dr LEONG Che-hung's motion be amended, as set out on the Agenda.

Mr Martin LEE moved the following amendment:

"To add ", but deeply regrets that the Policy Address lacks effective measures to ease unemployment and alleviate people's hardship, and proposes to abolish the two municipal councils, thereby moving against the democratic trend and towards executive hegemony; this Council also urges the Chief Executive to make every effort to safeguard Hong Kong's free economy and legal system, build a democratic, free and pluralistic society, as well as promote long-term developments through independent and novel thinking, so as to restore public confidence" after "That this Council thanks the Chief Executive for his address"."

PRESIDENT (in Cantonese):I now propose the question to you and that is: That the amendment moved by Mr Martin LEE, as printed on the Agenda, be made to Dr LEONG Che-hung's motion.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese) :Those against please raise their hands.

(Members raised their hands)

Mr Martin LEE rose to claim a division.

PRESIDENT (in Cantonese): Mr Martin LEE has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please proceed to vote?

PRESIDENT (in Cantonese): Before I declare that voting shall stop, Members may wish to check their votes. If there are no queries, the result will now be displayed.

Functional Constituencies:

Mr Michael HO, Mr CHEUNG Man-kwong, Mr Ambrose CHEUNG, Mr SIN Chung-kai and Mr LAW Chi-kwong voted for the amendment.

Miss Margaret NG abstained.

Geographical Constituencies and Election Committee:

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 28 were present, five were in favour of the amendment, 22 against it and one abstained; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 30 were present, 13 were in favour of the amendment and 16 against it. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Dr LEONG Che-hung, you may now speak to reply.

DR LEONG CHE-HUNG: Madam President, thank you for allowing me to speak for the third time. I also thank Members and the Administration for their indulgence. Hopefully, I would not be too boring as to allow them to sleep. (Laughter)

In this debate which lasted over a period of three days, Members have rightly spoken their mind as people's representatives. Although I was not present in some periods of time to share the wisdom of their speeches, I did read through them and digest them thoroughly. As I have been awake when reading these speeches, I would like to analyze for Members some of the areas, or perhaps the priority of areas, which have received major criticisms from Members of this Council.

Thirty-five Members have spoken with reservation, if not criticism, on leadership, governance and the relationship between the Legislative Council and the Executive Administration; 29 Members have spoken and laid criticisms on issues of finance, economy, industry and commerce; 13 Members have shown their disappointment with the Government's action or the lack of it towards labour problems; 12 Members felt that the Government has not done enough to speed up democracy and universal suffrage; 10 Members felt uncomfortable with the Government's policy direction towards welfare, and nine Members have criticized the policy of housing, as it has never been very stable. There are obviously more criticisms which I do not want to elaborate.

But, Madam President, to be fair, our Administration has actually attempted to answer most of them. Whether the reply is adequate or not, it would be foolhardy for me to make any comments, otherwise, you will never be able to go home. I only want to say that these policy areas must be further followed up in the respective panels.

Madam President, there is one area which I am sure I have to make some comments. And I am sure I can sound the chord of unison with all Members here, and that is, on the issue of the relationship between the Legislative Council and the Executive Council. As the debate develops on this particular policy address, a senior Member of the Executive Council, as reported, has said that the Legislative Council is an opposition party. If that Honourable Member is implying that we, in the Legislative Council, are in no way a ruling party, I think we would all agree. Yet, if he is to imply that this Council always opposes the Executive Administration, I would not like to be a part of it.

Facts have shown that it has never been a function, or the aim, of this or the previous Councils to object to everything that the Government proposes. We support what is rightly felt as best for the people of Hong Kong. We criticize anything that we feel could denigrate the well-being of the public. We object and will not condone anything that we feel is against Hong Kong people's interests. Madam President, this must be and is the constitutional right of this Council. Anything less, Members of this Council would not have done their duties. Madam President, let the Executive Administration realize that no legislature was to paralyze any government, let alone this one. It is in our best interests to work in close co-operation with the other tiers of government structure for the betterment of Hong Kong.

Madam President, I raise this issue as an example of the relationship between the Executive Administration and the Legislative Council or the lack of it. Members of this Council has repeatedly appeal to the Administration to look for a solution. Regrettably, there is only a non-committal mention in the policy address. I must thank the Chief Executive, however, to bring this important aspect of governance up again. This Council, obviously, hopes to look for a prudent approach on the part of the Administration to solve this problem.

Madam President, I am sure this Council would also applaud the Chief Secretary in accepting the flaws existing in the Civil Service and to take ownership. This must be what a responsible government is all about. Now that all the amendments are negated, where do we go from here? We can obviously support the motion. What does that mean? Well, it will mean that we are courteous and that we thank the Chief Executive for delivering the address, nothing more, nothing less. It does not imply that we support everything in the address nor does it mean that we agree with all the policy directions after all Members in the last two days have expressed their reservations over certain aspects. Perhaps, it may lead to one feeling amongst the public, and that is, that this Council would do its best to support what is good in the address and will monitor it continuously.

Madam President, of course, we can vote it down. The Government will still carry on with its set directions. The rolling point, of course, by that time is that in these days when public confidence is hanging on a thread, such a move may be the last straw that breaks the camel's back. Madam President, I make these comments not as a means to lobby but rather as a prudent analysis. I leave it to all Members to vote according to their conscience. Thank you.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Dr LEONG Che-hung, as printed on the Agenda, be passed.

PRESIDENT (in Cantonese) :I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese) :Those against please raise their hands.

(Members raised their hands)

Dr LEONG Che-hung rose to claim a division.

PRESIDENT (in Cantonese): Dr LEONG Che-hung has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please proceed to vote.

PRESIDENT (in Cantonese): If there are no queries, the result will now be displayed.

Functional Constituencies:

Mr Kenneth TING, Mr James TIEN, Mr Edward HO, Dr Raymond HO, Mr Eric LI, Mr LEE Kai-ming, Dr LUI Ming-wah, Miss Margaret NG, Mrs Selina CHOW, Mr HUI Cheung-ching, Mr CHAN Kwok-keung, Mr Bernard CHAN, Mr CHAN Wing-chan, Dr LEONG Che-hung, Mrs Sophie LEUNG, Dr Philip WONG, Mr WONG Yung-kan, Mr Howard YOUNG, Mr LAU Wong-fat, Mrs Miriam LAU, Mr Timothy FOK, Mr FUNG Chi-kin and Dr TANG Siu-tong voted for the motion.

Mr Michael HO, Mr CHEUNG Man-kwong, Mr Ambrose CHEUNG, Mr SIN Chung-kai and Mr LAW Chi-kwong voted against the motion.

Geographical Constituencies and Election Committee:

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 28 were present, 23 were in favour of the motion and five against it; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 30 were present, 15 were in favour of the motion and 14 against it. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the motion was negatived.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 2.30 pm on Wednesday, 11 November 1998.

Adjourned accordingly at twenty-seven minutes past Six o'clock.

OFFICIAL RECORD OF PROCEEDINGS Wednesday, 4 November 1998 The Council met at half-past Two o'clock

OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 4 November 1998
The Council met at half-past Two o'clock