Legislative Council

LC Paper No. CB(2) 1739/98-99
(These minutes have been seen
by the Administration)

Ref : CB2/PL/MP/1

LegCo Panel on Manpower

Minutes of meeting held on Thursday, 28 January 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 LEE Cheuk-yan
Hon Ronald ARCULLI, JP
Hon CHAN Kwok-keung
Hon CHAN Yuen-han
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon LEUNG Yiu-chung
Hon SIN Chung-kai
Hon Andrew CHENG Kar-foo
Hon SZETO Wah

Members absent:

Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon Michael HO Mun-ka
Dr Hon LUI Ming-wah, JP
Dr Hon LEONG Che-hung, JP

Public Officers attending :

Item III

Mr Joseph W P WONG, JP

Secretary for Education and Manpower

Mr Philip K F CHOK

Deputy Secretary for Education and Manpower

Miss Erica NG

Principal Assistant Secretary for Education and Manpower

Mr CHOW Tung-shan

Assistant Commissioner for Labour (Employment Services)

Mr H Y CHEUNG

Principal Economist

Mr M C LEUNG

Senior Labour Officer

Item IV

Mr Philip K F CHOK

Deputy Secretary for Education and Manpower

Miss Erica NG

Principal Assistant Secretary for Education and Manpower

Mr H Y CHEUNG

Principal Economist

Clerk in attendance:

Mrs Sharon TONG

Chief Assistant Secretary (2)1

Staff in attendance:

Ms Lolita NG

Senior Assistant Secretary (2) 5

I. Confirmation of minutes of meeting held on 26 November 1998
(LC Paper No. CB(2) 1152/98-99)

The minutes were confirmed.

II. Date of next meeting and items for discussion
(LC Paper No. CB(2) 1156/98-99(01))

2. Panel meetings for the period of April to July 1999 were scheduled for Thursdays, 22 April 1999, 27 May 1999, 24 June 1999 and 22 July 1999 at 2:30 pm.

3. The Panel decided to discuss the following items at the next meeting on 25 February 1999 -

1. Progress of measures to create jobs and tackle unemployment;

2. Implementation of the International Labour Conventions in Hong Kong; and

3. Rights of workers to go on strike or take industrial action.

(Post-meeting note : The meeting on 25 February 1999 was rescheduled to Wednesday, 3 March 1999 at 10:45 am.)

III. Progress of measures to create jobs and tackle unemployment
(LC Paper No. CB(2) 1156/98-99(02))

4. At the request of the Chairman, Deputy Secretary for Education and Manpower (DSEM) highlighted the progress of the measures to create jobs and tackle unemployment as follows -

1. On telephone referral and vacancy processing service for job-seekers, the Labour Department (LD) set up a Telephone Employment Service Centre in North Point on 21 December 1998 with a view to further strengthening the telephone referral service. To enhance operational efficiency, a Job Vacancy Processing Centre had also been set up to centralise the receipt and processing of vacancy orders, as well as the dissemination of vacancy information to Local Employment Service(LES) offices;

2. Pertaining to employees retraining, the Employees Retraining Board (ERB) had increased its training capacity by 18 000 in 1998-99. More than 150 types of courses were organised, with a total attendance of 8 300 persons. The training capacity of the retraining-cum-job matching programmes for domestic helpers had been increased to 2 800 from April to November 1998, representing an increase of 120% over the same period in 1997. More than 4 200 persons could be retrained as domestic helpers in 1998-99. Since the inception of the one-stop service, ERB had helped 3 105 retrainees to secure employment. The one-stop service team also provided enhanced follow-up service for employers approaching the ERB for enquiries or assistance ;

3. On implementation of the three community building projects, the recruitment for Temporary Community Organisers was in progress and about 2 207 vacancies had been filled; and

4. As regards the Special Finance Scheme for Small and Medium Enterprises (SMEs), the Government had approved 180 new applications in December 1998, representing an increase of 30% in the accumulative number of applications approved in the previous month. The loan amount involved in these newly approved applications was about $242 million.

5. Mr SIN Chung-kai pointed out that there was a demand for manpower in the information technology sector. He enquired about the work of ERB in this area. DSEM responded that ERB had been conducting basic computer training courses. About 24 275 persons had attended such courses from April to November 1998.

6. Mr SIN Chung-kai proposed that given the employment opportunities in the sector of information technology, more retraining courses on informational technology be conducted by ERB. Assistant Commissioner for Labour (AC for L) responded that ERB was aware of the manpower requirements and had started to organise retraining courses in this area.

7. Responding to Mr SIN Chung-kai's further question on retraining to help solve the Year 2 000 compliance problem, SEM advised that because of the relatively low educational standard of many retrainees, ERB had not organised retraining courses on advanced information technology. Instead, the Vocational Training Council (VTC) had organized training courses in the area of information technology. Mr SIN Chung-kai further said that there would be ample job opportunities arising from the Year 2000 compliance problem. In order to tackle the problem, old computer skills, e.g. COBOL were required. However, universities no longer trained their students on old computer skills. Retraining on such skills should be considered. SEM agreed to look into this and provide detailed information later.

Adm

8. Mr LEE Cheuk-yan said that there was a strong demand for the services of part-time domestic helpers particularly on Sundays or for special occasions. He suggested the Administration to consider subventing an organisation to co-ordinate the service as an extension of the existing programmes. SEM agreed that there was a demand for relief part-time domestic helpers in Hong Kong. He said that the business starter centre newly established by the VTC could help individuals who would like to explore the market of providing agency services for people looking for these jobs. Mr LEE Cheuk-yan opined that the Administration should play a pioneering role before the proposal evolved to be a commercial project.

9. Referring to item six of the paper, Mr CHAN Wing-chan enquired about the rationale for the conclusion that the proposed flea market would not be able to meet its stated objective of helping the unemployed. SEM explained that the Kai Tak flea market project organised by a commercial company was far from encouraging. Besides, the three proposals submitted in response to the Administration's invitation to operate a flea market at Kai Tak on a non profit-making basis were not satisfactory. One of them lacked operating resources, although the Administration was willing to provide an interest-free loan for the setting up of the basic facilities, the remaining organisation withdrew its application. The other two proposed to charge a high price for the stall operators. Such circumstances had led the Administration to shelve the flea market plan. Should there be any other feasible flea market proposal, the Administration would be willing to consider.

10. Mr CHAN Wing-chan further asked if the Administration had considered subsidizing the basic facilities, such as the water and electricity supply and toilet facilities, for setting up the proposed flea market. SEM responded that in order to implement the proposed flea market plan, the Administration had agreed to grant the site free of charge to the organisation and was willing to provide it with an interest-free loan. Given the principle that the Administration had to be prudent in its spending, a direct subvention would not be considered.

11. Miss CHAN Yuen-han was not satisfied that the flea market project had to be shelved because of the bureaucracy in allocating financial resources. Noting that the amount involved was about $1.8 million, Mr Andrew CHENG took the view that the Administration should not be too rigid. The Chairman questioned if the Administration would depart from its prudent principle in order that the basic facilities be sponsored.

12. SEM did not agree that the Administration had been bureaucratic in its allocation of financial resources. He said that as evident from the community building projects and the increase of ERB's training capacity, the Administration had allocated additional resources to help ease unemployment. As regards the flea market project, the main issue was to what extent the Administration should shoulder the operational cost of the project. He reiterated that the Administration had agreed to grant the site free of charge to the concerned organisation. Instead of granting a subvention, the Administration was even prepared to provide an interest-free loan to the applicant. Responding to a further question from Mr Andrew CHENG, SEM said that there was no further plan to pursue the same flea market proposal at the present stage.

13. Mr CHAN Kwok-keung proposed that in order to maximize the use of manpower resources, hawker control teams of the Urban Services Department be deployed for management of the flea market.

14. Mr SIN Chung-kai commented that given the location and possible competition from the retail sector, stall operators of the proposed flea market might not make profits from the project as it was intended. SEM said that the proposed flea market was not meant to be a long-term project, but would operate only during weekends and public holidays. Mr CHAN Kwok-keung added that the retail sector was not worried about the competition because only old products would be sold in the flea market.

15. Referring to item nine of the paper, Mr Andrew CHENG asked about the rationale for the low rate of job referrals by LD and what measures would be adopted to improve the telephone referral service. In this connection, he proposed that more publicity, such as radio programmes, be launched to publicize the service. Regarding the retraining-cum-job matching programmes for domestic helpers, he was concerned about the actions to be taken by the Administration in order to make the programme a great success.

16. The responses of AC for L were as follows -(a) The telephone referral service was a new service whereby some people had used it for general enquiry only. Despite LD's job placement attempts, some job-seekers could not secure employment because of various reasons, such as language ability. To promote the telephone referral service, LD would publicize the available job vacancies through radio broadcast in collaboration with Radio Television Hong Kong with effect from February 1999; and(b) LD would promote the employment services for domestic helpers in 11 LES offices. A special service counter would be set up in the LES offices to provide enhanced job-matching services for job-seekers looking for domestic helper posts.

17. The Chairman was concerned about the prospect of Hong Kong's economy. Principal Economist (PE) said that 1999 was expected to be another tough year for the Hong Kong economy. Specifically, Hong Kong's exports were likely to be dampened by a continued weak external demand situation and more intense competition for export business from within the region. Also relevant was a possible slow-down of the economies in Europe and the United States. While economic performance of the Mainland would continue to be strong, the main impetus to growth was likely to come from a surge in investment rather than from increases in consumer spending and exports. Hong Kong's export trade would receive a smaller boost than otherwise. PE further said that local consumer spending was likely to remain subdued in the coming months, as consumer sentiment would continue to be dampened by relatively high unemployment, moderated income and concern about job security. Nor would there be a strong pick-up in private sector investment. Taking all these factors into account, overall economic activity was likely to remain slack in the near term.

18. Miss CHAN Yuen-han queried the effectiveness of the 19 measures adopted by the Administration to create jobs and tackle unemployment. SEM stressed that the Administration was very concerned about the unemployment problem and the rising unemployment rate in Hong Kong. The unemployment problem was caused by the weak performance of the local economy, which was in turn largely affected by external factors. Except for the flea market plan, all of the twenty measures announced by the Task Force on Employment had made good progress. The measures, including those on training and retraining and advancing the commencement of public works projects, had helped ease the unemployment problem. The LD, for instance, had been helping several thousands of people to find jobs each month.

19. Miss CHAN Yuen-han maintained that the progress of the measures was too slow to tackle the unemployment problem. She urged the Administration to embark on additional measures. The Chairman concurred that the Administration needed to be more dynamic in implementing the measures. He suggested the Administration to work out a concrete plan to tackle the unemployment problem and review its principle for public spending.

20. At the suggestion of Miss CHAN Yuen-han, members present passed the following motion to urge the Administration to create jobs and tackle unemployment -

IV. Update on manpower and job creation assessment
(LC Paper No. CB(2) 1156/98-99(03)

21. At the request of the Chairman, DSEM briefed members on the assessment of new jobs created and to be created from May 1998 to December 2000 as a result of Government's major policy initiatives and key projects. He said that the assessment included only major policy initiatives and infrastructural projects initiated by the Government. Vacancies generated by private sector initiatives were not estimated.

22. On the estimates of new jobs arising from Government initiatives and projects, DSEM pointed out that -(a) a total of 38 363 new jobs had been created between May and December 1998, comprising 5 600 in the civil service and 32 763 outside the civil service; and(b) out of the 32 763 new jobs created outside the civil service, 12 064 were permanent, while 20 699 were project based with an average duration of 28 months. 9 705 of these jobs fell within the category of professional, managerial, administrative or supervisory levels while 23 058 were operative/clerical and supporting levels.

23. Regarding new jobs to be created between January 1999 to December 2000, DSEM said that about 122 000 job vacancies would be generated within the labour market. A summary analysis of the figure was as follows -

1. About 32 000 would be permanent jobs, and 90 000 project based ones with an average duration of 25 months;

2. 113 500 would come from the private sector and non-government organisations receiving government subvention, and 8 500 from the civil service;

3. 20 000 would fall within the category of professional, managerial, administrative or supervisory levels while 102 000 operative/clerical and supporting levels; and

4. Of the 113 500 non-government new jobs, some 66 000 would be created in 1999 and 47 500 would be created in 2000.

24. DSEM further said that of the new jobs to be created in the non-government sector, 53 482, 20 400 and 9 017 would be created in the areas of infrastructural projects, public works building projects and housing respectively. About 30 000 new jobs would be created in other areas, such as tourism, social welfare, telecommunications, building management, education etc.

25. Referring to Appendix III of the paper, Mr LEE Cheuk-yan said that of the 120 000 new jobs to be created from January 1999 to December 2000, more than 80 000 posts would be created by infrastructural projects, public works building projects and housing projects. Given the creation of about 30 000 new jobs in other areas, there was not a substantial provision of new jobs in sectors other than construction in the labour market. There would be fewer new jobs in 2000 than in 1999. He further said that most of the new jobs were project based and short-lived, with an average duration of 25 months only. Regarding the creation of new jobs in the area of tourism, he asked why the duration for the 1 200 posts was "zero".

26. DSEM responded that -(a) there would be a large number of new jobs in the construction sector because the Government would invest heavily in infrastructural projects in the 5 years up to 2002-03; (b) the fewer new jobs in 2000 compared to 1999 could be partly explained by the fact that new civil service jobs to be created from April to December 2000 were not included in the estimates, the project based jobs were not really short-lived, their average duration was longer than 2 years; and(c) the duration of posts to be created in tourism would be less than one month, which was expressed in the table as "zero".

27. Mr James TIEN was of the view that only the workers in the construction trade would benefit from the job creation as the majority of the new posts were in the construction sector.

28. Referring to paragraph 4.2 of the paper, Mr Andrew CHENG asked about the detailed classification of the job types required by the infrastructure projects. DSEM said that the requisite information could not be made available at the present stage. The most detailed breakdown of the posts was at the professional or managerial levels and at the operative/supportive levels. Mr Andrew CHENG urged the Administration to collect and provide the requisite information so that local workers could be trained for job types in anticipation of imported labour and subsequent importation of labour would not be necessary. DSEM agreed to look into this.

Adm

29. Comparing the job assessment with the one announced in June 1998, Miss CHAN Yuen-han questioned if the new jobs to be created from January 1999 to December 2000 had overlapped with those which were estimated to be created from May 1998 to December 1999. DSEM said that having regard to the actual jobs created, part of the 120 000 new jobs estimated to be created from January 1999 to December 2000 overlapped with part of 100 000 estimate released earlier on, which captured the number of new jobs for the period of May 1998 to December 1999. He stressed that the message was that there were still a large number of job opportunities in the 2 years ahead of us.

30. Responding to a further question from Miss CHAN Yuen-han, DSEM said that the Administration had been positive and would explore all possible means to create additional new jobs in the labour market. Members' views had always been taken into account. The Chairman suggested that the Administration should also take into consideration the prospective new jobs which would be created in some sectors, such as in the insurance sector upon the implementation of a mandatory provident fund in Hong Kong.

31. Mr SIN Chung-kai pointed out that there was a noticeable population growth in 1998. He enquired about the percentage of economic growth which would be necessary to offset the population growth.

32. In response, PE said that compared with mid-1997, there was a population growth of around 185 000 in mid-1998 . The natural increase in population was estimated at 23 000, which was smaller than those in the earlier years. Yet concurrently there was a sustained large inflow of population, comprising mainly returnees, expatriates, foreign workers and immigrants from the Mainland. PE felt that continuous economic growth and employment creation was essential for the additional labour supply to be absorbed. But in practice the relationship between economic growth and change in employment had not been a stable and systematic one. In some years, the two variables moved closer in line with each other, but in some other years they did not. Thus it was not possible to indicate precisely what rate of economic growth would be necessary or sufficient to cater for the increase in population. Nevertheless, it was true that the stronger the economic growth, the greater would be the employment creation effect.

33. Mr SIN Chung-kai suggested that in order to actualize the supply and demand, a forecast and an analysis on the growth of the local workforce be provided when the Administration presented future job assessment. At the request of the Chairman, DSEM undertook to provide the Panel with the requisite information.	Adm
34. Mr James TIEN added that when assessing the job creation in Hong Kong, the Administration should also take into account the posts lost because of retrenchments, closing down of business, no growth in the private construction sector, a shrinking tourism industry etc. DSEM agreed to examine if this was possible.	Adm
35. Referring to paragraph 4.12 of the paper, Mr CHAN Kwok-keung cast doubt on the provision of 950 and 645 new jobs in the areas of waste management and taxis trade respectively. Despite the impending replacement of some diesel taxis by liquefied petroleum gas taxis, he queried whether the Administration had deducted the number of diesel taxis posts lost from the number of posts to be created. DSEM agreed to provide more information on the two areas of job creation.	Adm

36. Mr CHAN Kam-lam said that the Administration should assess job creation taking into account the changes in the society and the economy. He urged the Administration to maintain a good business environment so that the posts lost because of retrenchments and closing down of business would be minimized. DSEM responded that the paper was prepared on the basis of the information available to the Administration. Regarding the jobs lost and the new jobs created or to be created, the Administration obtained the relevant information from the public sector. However, it was not optimistic that relevant information from the private sector could be made available.

37. Mr SZETO Wah took the view that for a more comprehensive job assessment, detailed information on the returnees and the new arrivals, including their age profiles, would be helpful. The Administration should also consider the demand for jobs by the local people who would be ready to join the workforce. In this regard, Miss CHAN Yuen-han said that the Administration needed to formulate and make known its long-term policy for manpower.

38. PE undertook to provide the Panel with a more detailed analysis by different categories of the population (such as returnees and immigrants from the Mainland), as well as by their sex and age group, inasmuch as this would impinge on the local labour force.

Adm

39. Mr Andrew CHENG suggested that to give a comprehensive picture on employment situation, a consolidated rate rather than the unemployment rate and the under-employment rate should be used in addressing the unemployment problem.

40. There being no other business, the meeting ended at 4:40 pm.

Legislative Council Secretariat
14 April 1999