Panel on Manpower(Minutes) 23 March 99

Legislative Council

LC Paper No. CB(2) 2024/98-99
(These minutes have been seen
by the Administration)

Ref : CB2/PL/MP/1

LegCo Panel on Manpower

Minutes of meeting held on Tuesday, 23 March 1999 at 2:30 pm in the Chamber of the Legislative Council Building

Members present:

Hon LEE Kai-ming, JP (Chairman)
Hon LAU Chin-shek, JP (Deputy Chairman)
Hon Kenneth TING Woo-shou, JP
Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Michael HO Mun-ka
Hon LEE Cheuk-yan
Dr Hon LUI Ming-wah, JP
Hon Ronald ARCULLI, JP
Hon CHAN Kwok-keung
Hon CHAN Yuen-han
Hon CHAN Wing-chan
Hon LEUNG Yiu-chung
Hon SIN Chung-kai
Hon Andrew CHENG Kar-foo

Members absent:

Hon David CHU Yu-lin
Hon CHAN Kam-lam
Dr Hon LEONG Che-hung, JP
Hon SZETO Wah

Public Officers attending:

Item III
Mr Philip K F CHOK: Acting Secretary for Education and Manpower
Miss Erica NG: Principal Assistant Secretary for Education and Manpower
Mr Alfred CHAN: Deputy Commissioner for Labour
Mr CHOW Tung-shan: Assistant Commissioner for Labour (Employment Services)
Mr H Y CHEUNG: Principal Economist
Mr Alvin LI: Assistant Commissioner for Census and Statistics (Social)
Item IV
Mr Philip K F CHOK: Acting Secretary for Education and Manpower
Miss Erica NG: Principal Assistant Secretary for Education and Manpower
Mr Alfred CHAN: Deputy Commissioner for Labour
Mr CHOW Tung-shan: Assistant Commissioner for Labour (Employment Services)
Item V
Mr Philip K F CHOK: Acting Secretary for Education and Manpower
Miss Erica NG: Principal Assistant Secretary for Education and Manpower
Mr Tony REYNALDS: Principal Assistant Secretary for Education and Manpower
Mr Alfred CHAN: Deputy Commissioner for Labour
Mr CHOW Tung-shan: Assistant Commissioner for Labour (Employment Services)

Attendance by invitation:

Item V
Representatives from Society for Community Organization (SOCO)
Mr HO Hei-wah: Director of SOCO
Mr NG Wai-tung: Representative of SOCO
Mr PUN Yau-wai: Representative of SOCO
Mr LEUNG Po: Representative of working elderly
Mr BUN Yuk-men: Representative of working elderly
Ms YUN Choi-chun: Representative of working elderly
Mr CHAN Kin-kai: Representative of working elderly
Mr KWOK Kwok-sin: Representative of working elderly
Ms HO Ching-mei: Representative of working elderly
Mr WONG Ping-ho: Representative of working elderly

Clerk in attendance:

Mrs Sharon TONG: Chief Assistant Secretary (2)1

Staff in attendance:

Mr Colin CHUI: Senior Assistant Secretary (2) 5

I. Confirmation of minutes of meeting held on 7 January 1999
(LC Paper No. CB(2) 1375/98-99)

The minutes were confirmed.

II. Date of next meeting and items for discussion
(LC Paper No. CB(2) 1525/98-99(01))

2. The Panel agreed to discuss the following items at the next meeting on 22 April 1999 -

Progress of Year 2000 compliance exercise in Government departments, Government-funded and Government-regulated organizations responsible for labour and manpower matters;
A study on the manpower requirements for infrastructural projects;
Training and retraining strategy to meet the manpower requirements of major industries in Hong Kong; and
Measures to improve industrial safety in the construction industry.

3. Mr Michael HO said that the scope of the review on employment conditions of live-in domestic helpers (item 3 of the paper) should also cover those of part-time domestic helpers. He was concerned that, if the minimum allowable wage for foreign domestic helpers was adjusted downwards in future, people who had completed employee retraining courses for employment as part-time domestic helpers might have difficulties in finding jobs. In response, Acting Secretary for Education and Manpower (SEM (Ag)) clarified that the review on the minimum allowable wage for foreign domestic helpers was an annual exercise. It differed from the review on employment conditions of live-in domestic helpers. The Chairman remarked that the latter review aimed to assess whether special arrangements were required for live-in domestic helpers, e.g. whether they should be excluded from the protection under the Employment Ordinance.

4. In response to the Chairman's question on the policy review on the entry of mainland professionals (item 6 of the paper), SEM (Ag) said that a taskforce headed by the Secretary for Security planned to complete the review within six months. The Administration hoped to report the result of the review to the Panel in November 1999.

Adm

III. Population growth and employment
(LC Paper No. CB(2)1525/98-99(02))

5. Assistant Commissioner for Census and Statistics (Social)(AC for C&S) said that population growth was calculated on the basis of the following three components -

births;
deaths; and
balance of arrivals and departures, which comprised the following :
1. movement of Hong Kong permanent residents to and from places other than Mainland/Macau;
2. one-way permit holders from Mainland entering Hong Kong; and
3. movement of Hong Kong non-permanent residents and visitors to and from Hong Kong.

There was a reduction of births per year over the past ten years (from 70 000 in 1989 to 53 000 in 1998). Even with an ageing population, there was only a slight increase of deaths per year in the same period (from some 29 000 in 1989 to around 32 000 in 1998). This might be attributed to the improvement in health care and improvement in social conditions. The natural increase (i.e. births minus deaths) had been the main reason for population growth in the past but was replaced by the balance of arrivals and departures in the past few years.

6. Referring to the population growth from end-1997 to end-1998, AC for C&S pointed out that the growth was mainly attributed to the inflow of Hong Kong permanent residents from places other than Mainland/Macau and of one-way permit holders. The former outnumbered the latter. Analysed by component by age and sex, the majority of the population growth came from the two working age groups of 35-44 and 45-54. The increase in the balance of arrival over departure of Hong Kong permanent residents from places other than Mainland/Macau (i.e. "returnees" - returned emigrants and other persons returning) were mainly aged between 25 and 54. Slightly over 50% of the one-way permit holders were aged below 15. Females outnumbered males in the adult one-way permit holders.

7. Regarding the impact of population growth on employment, AC for C&S pointed out that the one-way permit holders were mainly children and middle-aged females. As such, they would contribute only to a limited extent to the growth of the labour force. More likely, the growth in the labour force was due to the net inflow of Hong Kong permanent residents from places other than Mainland/Macau and the inflow of persons other than Hong Kong permanent residents. Statistics on the labour force of Hong Kong were collected through the General Household Survey (GHS). It was difficult to collect from the GHS detailed employment statistics by different categories of population, such as returning emigrants, one-way permit holders, expatriates, etc. Nevertheless, the Census and Statistics Department (C&SD) was planning to conduct a special topic enquiry via GHS to collect information on returning emigrants. The collected information would facilitate a more detailed study of the impact of returning emigrants on the employment and unemployment situation of Hong Kong.

Statistics on employment of one-way permit holders

8. The Deputy Chairman asked whether there were employment statistics of new arrivals and the difficulties they faced in seeking employment. AC for C&S responded that it was difficult to conduct special topic enquiry via GHS to collect information on new arrivals from the Mainland. The number of new arrivals per year was around 55 000 calculated on the basis of the present daily quota of 150 for one-way permit holders. As the number only constituted a very small portion of the 6.8 million population, it might not be appropriate to collect employment statistics of new arrivals via GHS. C&SD was also exploring other channels to collect these statistics.

9. The Deputy Chairman said that returnees might leave Hong Kong if they could not find jobs here. As such, their employment problems might be less serious than those of the new arrivals from the Mainland. Moreover, the judgment of the Court of Final Appeal on cases relating to the right of abode of Hong Kong permanent residents' children born in the Mainland would have implications on the labour market following the arrival of eligible persons. He therefore took the view that resources should be given to the new arrivals from the Mainland rather than returnees. AC for C&S said that employment statistics of new arrivals with less than 7 years of residence in Hong Kong had been included in the 1996 By-census. As the population sample of GHS was much smaller than that of the By-census and these new arrivals were of a small portion of the Hong Kong population, employment statistics of new arrival collected via GHS might involve large statistical errors.

10. Principal Economist briefed members on the socio-economic characteristics of new arrivals from the Mainland based on the information collected from the 1996 Population By-census, as follows -

about 30% of those aged 15 or above were having an education level of primary school or below, 60% were of secondary school level while 9% possessed tertiary education level;
43% were employed in the wholesale, retail and import/export trades, restaurants and hotels sector, 25% in the manufacturing sector, 11% in the community, social and personal services sector, while 8% in the construction section; and
about 50% were engaged in the less skilled jobs while 15% worked as managers and administrators, professionals and associate professionals.

11. The Chairman said that members would like to have more up-to-date employment statistics on these new arrivals. Given the impact of the CFA's judgment on the number of new arrivals from the Mainland, the Administration should use other channels, such as making use of the information collected by the Immigration Department, to collect these employment statistics.

12. AC for C&S said that other government departments were conducting surveys to collect information on the new arrivals from the Mainland. For instance, the Home Affairs Department had been conducting surveys to collect information on, inter alia, the education level and accommodation of the new arrivals. Deputy Commissioner for Labour (DC for L) pointed out that a designated employment service centre (Employment & Guidance Centre for New Arrivals) had been set up by the Labour Department (LD) in Shau Kei Wan to assist new arrivals from the Mainland to find jobs. In 1998, employment services were provided to some 10 500 new arrivals from the Mainland who had less than 7 years of residence in Hong Kong. The success rate in finding jobs for these new arrivals was about 16% (some 1 700 persons) which was similar to that for other Hong Kong residents. Regarding the types of work of these successful job-seekers, 42% of them were employed as domestic helpers, transportation workers or casual workers, 5% in work requiring higher level of skills. For job seeking purpose, LD also collected information on the age and education level of these new arrivals. LD provided them with job matching programme and succeeded in helping 610 workers to find jobs, representing a success rate of 45.8%. Employment services for these new arrivals would be enhanced with the opening of the second designated employment service centre in Mong Kok. The Deputy Chairman requested the Administration to provide details of surveys conducted by the various government departments on the new arrivals from the Mainland.

Adm

13. Given the possible increase of returnees and one-way permit holders, Mr Andrew CHENG asked whether the Administration would change the present method of collecting statistics on the labour force. As the returning emigrants represented only a very small population of the Hong Kong population, he also questioned whether information collected in the special topics enquiry to be conducted by C&SD would accurately reflect their employment situation.

14. AC for C&S pointed out that C&S D had made reference to the definitions of unemployed and underemployed persons recommended by the International Labour Organization and other statistical authorities in conducting GHS. The method employed in conducting GHS was well-established and complied with statistical requirements. While the estimates were subject to sampling and non-sampling errors, C&SD would endeavour to minimise these errors in planning for the special topic enquiry.

15. Notwithstanding that one-way permit holders were mainly children and middle-aged females and therefore contributed only to a limited extent to the growth of labour force, Mr Andrew CHENG asked whether employment statistics would be collected on these new arrivals given the impact of the judgment of the Court of Final Appeal on the number of new arrivals from the Mainland. AC for C&S responded that at present C&SD sought to collect, via GHS, information on the returnees who accounted for the majority of the population growth. The collection of information on the one-way permit holders was accorded lower priority.

16. Mr Ho Sai-chu asked whether net inflow of returnees from end-1995 to end-1998 (item (3)(b) of Table 1 of the paper) would decrease in future. AC for C&S said that the net inflow was the balance of arrivals and departures in the years concerned with the former outnumbering the latter. The number of returnees who were mainly returning emigrants and students returning to Hong Kong after overseas study, was large in recent years. It was expected that the number of returning emigrants might decrease in future as many who wished to return would have done so during 1996 to 1998. Also affecting the situation could be due to economic downturn or other reasons. Mr HO opined that there might be more job opportunities in overseas countries than in Hong Kong due to the local economic downswing. As such, there might be less emigrants returning to Hong Kong in future. He shared other members' view that the Administration should focus on employment surveys of one-way permit holders who would increase in number in future. The Chairman requested the Administration to provide members with employment statistics of one-way permit holders in due course.

Adm

17. Miss CHAN Yuen-han said that the Cyberport development and Science Park projects would only create jobs requiring high-technology skills. Hence, the unemployment situation of those with lower education and skills levels could not be alleviated. She considered that the Administration should collect information on the education and skill levels of the one-way permit holders and be more forward-looking in its manpower planning having regard to the change in population.

18. Miss CHAN asked whether LD would introduce any changes to the employment services provided to the new arrivals from the Mainland. DC for L pointed out that the provision of employment services had been diversified in the past years, for instance, the provision of telephone referral service. Job-seekers could obtain job referral service over the telephone without the need to go to the local employment service (LES) offices in person. With the consent of employers, information on job vacancies would be displayed at LES offices so that job-seekers could contact them direct for arranging interviews. Priority counter service would be provided to the new arrivals who were illiterate. As new arrivals were not familiar with the employment situation in Hong Kong, leaflets in this respect were distributed to them and in-depth interviews were provided at the LES centres to assist them in job-seeking.

Employment of middle-aged persons

19. Mr LEE Cheuk-yan said that the majority of the population growth came from the two working middle-age groups of 35-44 and 45-54 (table 2 of the paper). He asked how the Administration would tackle the employment problem of this category of people, in particular whether there would be legislative measures to eliminate age discrimination. He also asked how the Administration would tackle the continuous rise in the rate of long-term unemployment from 17% in January 1998 to 25% in January 1999, which was defined as being unemployed for more than six months.

20. SEM (Ag) pointed out that employment services and retraining were provided to unemployed persons irrespective of their age. DC for L said that long-term unemployed persons who could not find jobs through LES would be referred to the Job Matching Programme. Information on registered job-seekers had been kept in the LD's computer system to facilitate analysis of labour market information. Priority counter service was provided to elderly job-seekers.

21. Mr LEE Cheuk-yan pointed out that special services were provided to the unemployed persons who were Comprehensive Social Security Assistance (CSSA) recipients and an inter-departmental working group had been set up to study the issue. He suggested that the inter-departmental working group should also study the provision of new services to the long-term unemployed persons in respect of employment, family problems arising from unemployment, and counselling.

22. SEM (Ag) reiterated that employment services were provided irrespective of the age of job-seekers. Priority for retraining was provided to the unemployed persons aged 30 or above with education level at or below secondary three. Job opportunities for middle-age persons were taken into account in designing these retraining courses. Starting from June this year, the Social Welfare Department would strengthen its services to assist unemployed persons who were CSSA recipients to find jobs. EMB would assist by referring job vacancies, for which imported workers were proposed to be brought in but local workers were considered suitable, to these persons. In fact, there were quite a number of such vacancies at present.

IV. Job opportunities created by proposals in the 1999-2000 Budget
(LC Paper No. CB(2)1541/98-99(01))

23.SEM (Ag) briefed members on the Administration's paper which outlined the major job creation and tax concession proposals, summarised the new employment opportunities they brought as well as the positive impact they had on the general economy.

Job opportunities created by Cyberport development

24. Of the some 12 000 jobs to be employed by the Cyberport and its companies, Mr LEE Cheuk-yan asked how many would be for local people and imported workers or professionals. Should there be vacancies for information technology (IT) professionals, whether they would be filled by local people.

25. SEM (Ag) responded that the 12 000 jobs to be created was an estimate only. Details of the job types required were not available at the moment. It would be unlikely that all vacancies would be filled by non-local workers. It was highly possible that vacancies in IT posts might be filled by locally trained persons as IT courses were already provided by local universities to some 16 000 students in the past three years. Cyberport development would also attract local students to study IT subjects in universities. These local IT professionals would be more likely to secure employment by the Cyberport and its companies.

26. In response to Mr LEE's enquiry on the filling of vacancies by imported professionals which was discussed at the meeting of the Special Task Force on Employment, SEM (Ag) clarified that these vacancies were advanced technology rather than general IT posts. The Chairman asked whether the eight multi-national companies, which had signed letters of intent to become Cyberport's anchor tenants, would employ local people to fill their job vacancies. SEM (Ag) responded that he was not in a position to give a concrete answer. He expected that there should be jobs in advanced technology as well as IT-related fields to be employed by these companies. As such, there should be employment opportunities for local people.

27. Mr Andrew CHENG tabled a written submission from the Democratic Party (DP) on its job creation and training proposals in 1999-2000. He pointed out that in view of the substantive amount of resources (about $7 billion) allocated to development of high technology industry and training of related manpower, the Administration should have a better manpower planning in this respect to avoid waste of resources. He had no objection to the importation of professionals to fill vacancies in advanced technology where there were no local professionals. Nevertheless, the eight companies should be requested to provide overseas training scholarships for local people so that they could have the requisite expertise to fill the vacancies in advanced technology. He said that the Administration's job creation proposals, including the possible development of Walt Disney Theme Park, could only generate job opportunities by phases starting from 2002 and therefore offered no relief to the serious unemployment problem at present. DP therefore proposed to create in 1999-2000 a total of 7 000 posts of teaching assistants to assist teachers in activity learning, curriculum planning and administration work. In addition to these proposed posts, DP also proposed to create 182 posts of primary school teachers, 1 175 posts of computer technicians and 699 posts of social workers. These job creation proposals would generate 9 055 jobs at a cost of about $1 billion in 1999-2000.

(Post-meeting note : The submission was circulated to absent members vide LC Paper No. CB(2) 1564/98-99.)

28. SEM (Ag) clarified that the 32 000 new jobs set out in the Administration's paper did not include those arising from the possible development of Walt Disney Theme Park. While appreciating Mr CHENG's concern about the job opportunities for university graduates to which substantial resources had been given, he pointed out that Cyberport was not the only proposal which created jobs for the graduates. In addition to bringing in substantial economic benefits, Cyberport could also improve Hong Kong's international image and enhance foreign investors' confidence in Hong Kong's commitment to developing high technology industry. Cyberport would provide the essential infrastructure for the formation of a strategic cluster of information services companies, which would in turn support businesses and industries ranging from financial services, through trading, advertising and entertainment to communications. Cyberport was therefore an essential development for Hong Kong. The Administration would consider DP's proposed creation of posts for teaching assistants. The need, duties, salary, conditions of service and promotion prospect for the posts would be taken into account in examining the proposal.

Adm

29. Miss CHAN Yuen-han enquired about the Administration's measures to -(a) equip the workforce to seize the emerging job opportunities arising from Cyberport development;(b) enable the local workforce to learn the technology transferred to Hong Kong via Cyberport development; and (c) address the possible unemployment problems of the less skilled workers arising from development of high technology industry in Hong Kong.

30. SEM (Ag)'s response was as follows -(a) A manpower study on the IT industry was currently being carried out. The study would take into account the need of the Cyberport development and was scheduled to be completed by June 1999. The Administration would then work out with the tertiary institutions and training bodies on the training needs arising from the Cyberport development;(b) The Administration did not have information on the transfer of technology arising from the operation of Cyberport. Nevertheless, he expected that there should be such transfer for the benefits of the local workforce; and(c) The creation of jobs in high technology field arising from Cyberport development did not necessarily mean that existing jobs in other fields would be removed. Cyberport development should not have direct impact on job opportunities for the less skilled workers.

31. On whether the Administration would consolidate the respective manpower training initiatives arising from development of Science Park, Cyberport and IT study programmes of tertiary institutions, SEM (Ag) pointed out that the comprehensive manpower planning in this respect would be drawn up in the study of the manpower forecasting. Members would be advised of the comprehensive plan in due course.

Adm

32. Miss CHAN Yuen-han commented that the Administration should be forward-looking in its manpower planning and in addressing the possible unemployment problem arising from transformation of technology in relation to development of Cyberport and Science Park.

33. Mr LEUNG Yiu-chung remarked that the Administration did not have a clear direction on Cyberport development. He was concerned that the labour force and existing training courses could not meet the demands of the changing job requirements. For instance, people who received training on skills relating to micro-computers could not work on mini-computers. SEM (Ag) responded that training or retraining were provided to enable people to acquire new skills. People in the above example could receive training on skills relating to mini-computers for switching their jobs. Training was provided to equip the labour force with the skills for high technology and IT work at different levels. Tertiary institutions provided training of professionals, while Vocational Training Council (VTC) and other retraining bodies offered training for workers at the middle and junior levels. The study on the manpower requirements of the major industries in Hong Kong would assist the Administration in deciding the way forward in this respect. Mr SIN Chung-kai suggested that skills training on mini-computers be provided by VTC.

34. Mr LEUNG Yiu-chung expressed concern that in view of the rapid technological development, training received in schools could not meet the changing job requirements. He urged for a review of study programmes in educational institutions to address the problem.

Job opportunities created by reduction of ship registration fees

35. Mr CHAN Wing-chan asked how reduction of ship registration fees could create 15 800 job opportunities in three years. Principal Assistant Secretary for Education and Manpower (PAS(EM)) said that the number of posts was calculated by C&SD on the basis of the value added to the shipping industry's contribution to local Gross Domestic Product arising from the increase in tonnage of registered ships. Assistant Commissioner for Labour (Employment Services) (AC for L) added that by reduction of ship registration fees, it was expected to have more ships registered in Hong Kong and the tonnage of these ships would then increase. Shipping companies which had benefited from a substantial reduction of registration fees might be required to employ a certain percentage of local sailors. The Chairman requested and PAS(EM) agreed to provide the Panel with the principle and details of the calculation of posts created.

Adm

36. Mr CHAN Wing-chan asked how the reduced fees compared with those of overseas countries. As there was no obligation for employment of local workers for Hong Kong registered ships, he wondered whether the estimate of 15 800 job opportunities arising from the fee reduction was too optimistic. In reply, SEM (Ag) said that the Secretary for Economic Services had discussed with the shipping companies on the issue. The substantial reduction of these fees would render them to be more competitive with those of Libra, Singapore and Panama. The Administration was confident that, with promotion of the fee reduction, the tonnage of Hong Kong registered ships would increase. The estimated job opportunities were therefore not over-optimistic. The Chairman requested the Administration to provide the Panel with a comparison of ship registration fees of Hong Kong with those of overseas countries.

Adm

37. Mr CHAN remarked that training for jobs on shipping-related industries should be provided to meet the demands of the estimated job opportunities in this respect.

38. Mr LUI Ming-wah enquired about the Administration's confidence level on the estimated 32 000 jobs comprising 16 000 and 15 800 arising from the Cyberport development and reduction of ship registration fees respectively. SEM (Ag) responded that these were usable estimates and there were other measures, e.g. the various initiatives to revive tourism, which would help create jobs. The figure of some 32 000 jobs might even be an under-estimate.

39. Mr James TIEN expressed doubt about the Administration*s estimate of the 32 000 new jobs. He raised the following questions -

Whether the some 12 000 jobs to be employed by Cyberport and its companies included existing jobs of some 6 000 in IT field; and
Given that the total tonnage of ships of local shipping companies amounted to some 30 million tons, of which only some 6.2 million tons were locally registered, why the Administration did not devote efforts to persuade all these local shipping companies to register locally so as to generate more job opportunities.

40. The response of SEM (Ag) was as follows -

As the anchor tenants of Cyberport had yet to be finalised, the Administration did not have information on whether the tenants would relocate their local employees to Cyberport; and
The Administration would endeavour to attract more shipping companies to register their ships and set up companies locally. It would be over-optimistic to assume that all the non-locally registered ships of local shipping companies would switch its place of registration to Hong Kong.

V. Elderly employment
(LC Paper No. CB(2)1406/98-99(01) - paper from Society of Community Organization(SOCO))
((LC Paper No. CB(2)1525/98-99(03) - paper from the Administration)

41. Representatives of the working elderly presented their experiences in the following aspects -

difficulties in earning a living;
deprivation of statutory employee protection, such as statutory holidays, by a cleaning contractor of Housing Society*s estates;
the lack of retirement protection for the aged;
prolonged working hours;
taking up non-skilled odd jobs; and
difficulties in finding a job due to age discrimination.

42. Mr Andrew CHENG said that the Administration should strengthen its control on cleaning contractors. Mr LAU Chin-shek requested the Administration to follow up on the cases of these working elderly.

43. DC for L responded that while there was no statutory control on working time, employers who deprived employees of their statutory rights and benefits, such as statutory holidays, would be prosecuted. In 1998, there were 3 450 cases of prosecution against employers for contravening the Employment Ordinance which involved mainly the non-compliance with the provision of statutory holidays. He pointed out that LD had organised a seminar for the Housing Department on the problem of non-compliance with labour laws by cleaning contractors. The Housing Authority subsequently imposed a restriction on tender for cleaning services whereby cleaning contractors which had breached the labour laws were barred from submitting such tender. Labour Inspectors would continue to carry out inspections at workplaces to ensure that employers complied with the conditions of employment prescribed by the Employment Ordinance. The Chairman remarked that the problem in respect of cleaning contractors was that they often subcontracted the cleaning services to other contractors. Compliance by the main cleaning contractor did not mean that the subcontractors would do likewise.

44. Mr HO Hei-wah commented that the Administration did not seriously address the problems of the working elderly. He urged the Administration to study the problems of the working elderly and draw up the necessary measures.

Retirement protection for the aged

45. Miss CHAN Yuen-han enquired about the Administration*s measures to address the retirement protection problem of the working elderly. SEM (Ag) responded that the Administration had carried out extensive consultation on retirement protection in 1992 and 1993-94, and considered in depth different proposals of retirement protection. The Mandatory Provident Fund (MPF) scheme was considered to offer the best long-term advantages. Legislation relating to the MPF scheme was enacted by the Legislative Council and Provisional Legislative Council in July 1995 and April 1998 respectively. The MPF scheme was scheduled to be implemented by December 2000. Under these circumstances, the Administration did not consider it appropriate to introduce another retirement protection system.

46. Regarding the retirement protection for the non-working and less skilled elderly, SEM (Ag) said that the non-working elderly were protected by CSSA and the Old Age Allowance. Elderly usually had family support for their living. They could also support their living with their own savings. Working elderly could earn for a living. In future, working elderly who had made contributions to the MPF scheme could enjoy the benefits.

47. Mr LEE Cheuk-yan shared the SOCO*s view that the Administration should address the problems of the working elderly. In this connection, he suggested that the 5% employee contribution to the MPF scheme be split into two portions, i.e. 2% to be contributed by the Administration while the remaining 3% by employees. The Administration*s contribution would be used to set up an old age pension scheme for the existing elderly who could not benefit from the MPF scheme. Mr LEUNG Yiu-chung supported an old age pension scheme.

48. Mr Andrew CHENG said that Members generally supported retirement protection for the elderly and promotion of employment opportunities of the elderly. Given that the Administration was willing to spend $8 million to celebrate the International Year of Older Persons 1999, it should draw up measures to address the problems of the elderly.

49. In response to Mr LEUNG Yiu-chung, SEM (Ag) said that there was no need to introduce minimum wage in Hong Kong for the following reasons -(a) Imposition of a minimum wage in Hong Kong would not only distort the wage structure in the labour market, but also increase rigidity of wage adjustment, particularly during an economic downswing. As a result, it would impair the ability of the business sector and economy as a whole to adjust to external shocks;(b) Adopting a minimum wage in Hong Kong would undermine the inherent incentive of work force, especially the less skilled and lower-paid workers, to improve and upgrade their quality, which would not be beneficial to the development of economy in the long term; and(c) Any statutory minimum wage which deviated from the market-determined level would not necessarily be beneficial to employees. On the contrary, it would have an adverse impact on their employment opportunities. If the minimum wage was set below the market-determined level, some employers might refuse to pay higher than the minimum wage and the minimum wage might in effect become the maximum wage. If the minimum wage was set higher than the market-determined level, the labour cost might be too high for certain trades to remain competitive or viable, and as a result, some companies would have to scale down or even close down their operation. This would lead to an overall reduction in employment opportunities and an increase in unemployment. This was especially so at times of economic downturn or economic recession. In such circumstances, the less skilled and less qualified workers, especially the elderly, the disabled or marginally employable workers would stand the highest chance of being out-competed by other employees at the same minimum wage.

50. Mr LEUNG Yiu-chung asked whether maximum working hours would be imposed and whether legislation would be introduced to eliminate age discrimination. DC for L said that time worked beyond the prescribed working hours was regarded as overtime. The international trend was to deregulate working hours. Restrictive control over working hours would not be beneficial to the working elderly, particularly during an economic downswing. To assist in the elimination of age discrimination in employment, employers had been encouraged to hire on the basis of ability, not age. LD had put in place measures to forestall discriminatory practices against job-seekers. These measures included, inter alia, ensuring that no job vacancy orders received from employers carried age requirements.

51. Mr LEUNG Yiu-chung suggested that a comprehensive survey on the employment of elderly be conducted by the Administration. SEM (Ag) agreed to consult Census and Statistics Department.

Adm

52. The meeting ended at 5:05 pm.

Legislative Council Secretariat
7 May 1999