official record of proceedings wednesday, 24 february 2016 … · 2016-05-20 · official record of...

LEGISLATIVE COUNCIL ─ 24 February 2016

5819

OFFICIAL RECORD OF PROCEEDINGS

Wednesday, 24 February 2016

The Council met at Eleven o'clock

MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.M., G.B.S., J.P. THE HONOURABLE ALBERT HO CHUN-YAN THE HONOURABLE LEE CHEUK-YAN THE HONOURABLE JAMES TO KUN-SUN THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG THE HONOURABLE EMILY LAU WAI-HING, J.P. THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P. THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P. THE HONOURABLE TOMMY CHEUNG YU-YAN, G.B.S., J.P. THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P. THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P. THE HONOURABLE WONG KWOK-HING, B.B.S., M.H.

LEGISLATIVE COUNCIL ─ 24 February 2016 5820

PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N. THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P. THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P. THE HONOURABLE WONG TING-KWONG, S.B.S., J.P. THE HONOURABLE CYD HO SAU-LAN, J.P. THE HONOURABLE STARRY LEE WAI-KING, J.P. DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P. THE HONOURABLE CHAN HAK-KAN, J.P. THE HONOURABLE CHAN KIN-POR, B.B.S., J.P. DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P. DR THE HONOURABLE LEUNG KA-LAU THE HONOURABLE CHEUNG KWOK-CHE THE HONOURABLE WONG KWOK-KIN, S.B.S. THE HONOURABLE IP KWOK-HIM, G.B.S., J.P. THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P. THE HONOURABLE PAUL TSE WAI-CHUN, J.P. THE HONOURABLE ALAN LEONG KAH-KIT, S.C. THE HONOURABLE LEUNG KWOK-HUNG THE HONOURABLE ALBERT CHAN WAI-YIP


5821

THE HONOURABLE CLAUDIA MO THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P. THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P. THE HONOURABLE NG LEUNG-SING, S.B.S., J.P. THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S. THE HONOURABLE FRANKIE YICK CHI-MING, J.P. THE HONOURABLE WU CHI-WAI, M.H. THE HONOURABLE YIU SI-WING, B.B.S. THE HONOURABLE GARY FAN KWOK-WAI THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P. THE HONOURABLE CHARLES PETER MOK, J.P. THE HONOURABLE CHAN CHI-CHUEN THE HONOURABLE CHAN HAN-PAN, J.P. DR THE HONOURABLE KENNETH CHAN KA-LOK THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P. THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P. THE HONOURABLE KENNETH LEUNG THE HONOURABLE ALICE MAK MEI-KUEN, B.B.S., J.P. DR THE HONOURABLE KWOK KA-KI THE HONOURABLE KWOK WAI-KEUNG


THE HONOURABLE DENNIS KWOK THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P. DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P. DR THE HONOURABLE HELENA WONG PIK-WAN THE HONOURABLE IP KIN-YUEN DR THE HONOURABLE ELIZABETH QUAT, J.P. THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P. THE HONOURABLE POON SIU-PING, B.B.S., M.H. THE HONOURABLE TANG KA-PIU, J.P. DR THE HONOURABLE CHIANG LAI-WAN, J.P. IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P. THE HONOURABLE CHUNG KWOK-PAN THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P. THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S. MEMBERS ABSENT: DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P. THE HONOURABLE WONG YUK-MAN


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PUBLIC OFFICERS ATTENDING: THE HONOURABLE MRS CARRIE LAM CHENG YUET-NGOR, G.B.S., J.P. THE CHIEF SECRETARY FOR ADMINISTRATION THE HONOURABLE JOHN TSANG CHUN-WAH, G.B.M., J.P. THE FINANCIAL SECRETARY THE HONOURABLE RIMSKY YUEN KWOK-KEUNG, S.C., J.P. THE SECRETARY FOR JUSTICE PROF THE HONOURABLE ANTHONY CHEUNG BING-LEUNG, G.B.S., J.P. SECRETARY FOR TRANSPORT AND HOUSING THE HONOURABLE MATTHEW CHEUNG KIN-CHUNG, G.B.S., J.P. SECRETARY FOR LABOUR AND WELFARE PROF THE HONOURABLE K C CHAN, G.B.S., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY THE HONOURABLE GREGORY SO KAM-LEUNG, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT THE HONOURABLE RAYMOND TAM CHI-YUEN, G.B.S., J.P. SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS THE HONOURABLE LAI TUNG-KWOK, S.B.S., I.D.S.M., J.P. SECRETARY FOR SECURITY THE HONOURABLE EDDIE NG HAK-KIM, S.B.S., J.P. SECRETARY FOR EDUCATION DR THE HONOURABLE KO WING-MAN, B.B.S., J.P. SECRETARY FOR FOOD AND HEALTH THE HONOURABLE WONG KAM-SING, J.P. SECRETARY FOR THE ENVIRONMENT


THE HONOURABLE PAUL CHAN MO-PO, M.H., J.P. SECRETARY FOR DEVELOPMENT THE HONOURABLE NICHOLAS W. YANG, J.P. SECRETARY FOR INNOVATION AND TECHNOLOGY THE HONOURABLE LAU KONG-WAH, J.P. SECRETARY FOR HOME AFFAIRS THE HONOURABLE CLEMENT CHEUNG WAN-CHING, J.P. SECRETARY FOR THE CIVIL SERVICE MR SHIU SIN-POR, S.B.S., J.P. HEAD, CENTRAL POLICY UNIT MR GODFREY LEUNG KING-KWOK, J.P. UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT CLERKS IN ATTENDANCE: MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL MS ANITA SIT, ASSISTANT SECRETARY GENERAL


5825

PRESIDENT (in Cantonese): I would like to remind Members that this meeting will be suspended after the First Reading and Second Reading (debate to be adjourned) of the Appropriation Bill 2016, and resume at 3 pm. I must also remind Members that I will order any Member whose conduct is grossly disorderly during the speech of the Financial Secretary to leave the Chamber, and he will not be allowed to come back for the remainder of this meeting. MR ALBERT CHAN (in Cantonese): President, could you clarify whether it means that he will not be allowed to come back for three days? PRESIDENT (in Cantonese): That is correct, because these three days belong to one single meeting. (Mr LEUNG Kwok-hung, holding a prop balance, walked towards the Government Despatch Box along an aisle of the Chamber) PRESIDENT (in Cantonese): Mr LEUNG Kwok-hung, please return to your seat immediately. As I said just now, if your conduct is grossly disorderly, I will order you to leave the Chamber. (Mr LEUNG Kwok-hung kept walking towards the Government Despatch Box) PRESIDENT (in Cantonese): Mr LEUNG Kwok-hung, return to your seat immediately. (Mr LEUNG Kwok-hung spoke loudly while returning to his seat) PRESIDENT (in Cantonese): Mr LEUNG Kwok-hung, return to your seat immediately and keep quiet. (Some Members had yet to return to their seats) PRESIDENT (in Cantonese): Will Members please return to their seats immediately.


TABLING OF PAPERS The following papers were laid on the table under Rule 21(2) of the Rules of Procedure: Subsidiary Legislation/Instruments L.N. No.

Maximum Amount of Election Expenses (Chief Executive Election) (Amendment) Regulation 2016 ..............

34/2016

International Organizations (Privileges and Immunities)

(ASEAN+3 Macroeconomic Research Office) Order ................................................................

35/2016

Other Papers

No. 67 ─ Hong Kong Arts Development Council Annual Report 2014-2015 No. 68 ─ Hong Kong Examinations and Assessment Authority Financial statements for the year ended 31 August 2015 and Report on Activities September 2014－August 2015 No. 69 ─ Li Po Chun Charitable Trust Fund Report of the Trustee on the Administration of the Fund for the year ended 31 August 2015 No. 70 ─ Estimates for the year ending 31 March 2017 Volume I ─ General Revenue Account (Page 1 to 532) Volume I ─ General Revenue Account (Page 533 to 982) No. 71 ─ Estimates for the year ending 31 March 2017 Volume II ─ Fund Accounts Report No. 13/15-16 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments


5827

WRITTEN ANSWERS TO QUESTIONS Co-ordination of Efforts of Policy Bureaux on Implementation of Government Policies 1. MR ALBERT HO (in Chinese): President, in his election manifesto, the Chief Executive (CE) made the pledges that "[w]e will adopt measures to progressively reduce the proportion of accrued benefits attributed to employer's contribution in the M[andatory] P[rovident] F[und] account that can be applied by the employer to offset long-service or severance payments" and "[a] special committee … will be set up to follow up on the study on standard working hours conducted by the current administration. This committee will examine issues relating to … legislative proposals on standard working hours". When CE attended a televised panel discussion forum on the 13th of last month, he was queried by the host that it had been more than three years since his assumption of office but he had not yet honoured the two pledges. CE responded that the whole Government had devoted much efforts in promoting constitutional development over the past year or so. In this connection, will the Government inform this Council:

(1) of the details of the efforts devoted by the politically appointed officials in various policy bureaux (excluding the Constitutional and Mainland Affairs Bureau) to promoting constitutional development over the past year or so;

(2) of the number of policy initiatives the implementation of which was

affected by the work of the Government to promote constitutional development, and the extent to which such initiatives were affected; and

(3) whether it has established a system for determining (i) the relative

priorities of various policies and (ii) the efforts to be devoted by various policy bureaux to implementing them, so as to avoid focusing only on certain policies while neglecting others; if it has, of the details; if not, the reasons for that?

SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Chinese): President, in consultation with relevant departments, the consolidated reply to the question raised by Mr Albert HO is as follows.


It is an important policy initiative of the current term Hong Kong Special Administrative Region (HKSAR) Government to take forward the attainment of selecting the Chief Executive by universal suffrage strictly in accordance with the Basic Law and relevant Interpretation and Decisions of the Standing Committee of the National People's Congress. In this connection, the HKSAR Government formally launched the public consultation on constitutional development in the fourth quarter of 2013 and strived to take forward the "Five-step Process" of constitutional development. The entire team of Politically Appointed Officials, under the co-ordination of the Task Force on Constitutional Development (Task Force) headed by the Chief Secretary for Administration, assisted in taking forward constitutional development in different fields and areas of work. During the two public consultation periods between December 2013 and May 2014, and between January and March 2015, all Secretaries of Department and Directors of Bureau spared no efforts in reaching out to different sectors of the community and relevant bodies and stakeholders of the industries to listen to their views, so as to assist the Task Force in conducting the consultation in order to forge the greatest consensus among different sectors of the community. Subsequently, on 2 June 2015, the HKSAR Government put forward to the Legislative Council proposals for selecting the Chief Executive by universal suffrage which are constitutionally in order, lawful, reasonable and rational, with a view to obtaining support from a two-thirds majority of all Members of the Legislative Council, thereby completing the Third Step of the Five-step Process of constitutional development. Regrettably, the proposals were vetoed at the Legislative Council meeting on 18 June 2015 by more than one-third of all Members of the Legislative Council (that is, 28 Members). After the veto of the proposals for selecting the Chief Executive by universal suffrage, the HKSAR Government has made clear that the current term Government would focus on handling economic development and livelihood issues. The progress or implementation timetable for different policies under their respective Secretaries of Departments and Directors of Bureaux depends on various factors. The HKSAR Government will, as always, continue to pay close attention to the various needs of different sectors of the community; and, under the leadership of the Chief Executive and at appropriate junctures, launch different policies that are beneficial to the economy, the livelihood, and the social development of Hong Kong.


5829

Orders Made by Chief Executive for Interception of Messages 2. MR JAMES TO (in Chinese): President, under section 33(1) of the Telecommunications Ordinance (Cap. 106), the Chief Executive (CE) may order that any class of messages shall be intercepted (interception orders) for the purpose of providing or making available facilities reasonably required for: (i) the detection or discovery of any telecommunications service provided in contravention of any provision of the Ordinance or any regulation made under the Ordinance or any of the terms or conditions of a licence granted under the Ordinance, or (ii) the execution of prescribed authorizations for telecommunications interception that may from time to time be issued or renewed under the Interception of Communications and Surveillance Ordinance (Cap. 589). In this connection, will the Government inform this Council:

(1) of the number of interception orders made for the first aforesaid category of actions in each of the past four years, and the number of telecommunications companies or Internet service providers (ISPs) involved, with a breakdown by message transmission channel (e.g. fixed-line phones, mobile phones, e-mails, social media and instant messaging programs); if it cannot provide such figures, of the reasons for that;

(2) of the number of interception orders made for the second aforesaid

category of actions each year since the commencement of Cap. 589, and the number of telecommunications companies or ISPs involved, with a breakdown by message transmission channel; if such figures cannot be provided, of the reasons for that;

(3) among the interception orders mentioned in (1) and (2) of the

respective numbers of orders made by CE (i) on his own motion, and (ii) at the request of government departments (and the government departments making such requests); and

(4) whether it has formulated an appropriate mechanism and procedure

for the making of interception orders by CE to facilitate the monitoring by the public and to prevent abuse, with a view to protecting the personal privacy of the public?


SECRETARY FOR SECURITY (in Chinese): President, section 33(1) of the Telecommunications Ordinance (TO) (Cap. 106) provides that the Chief Executive may order that any class of messages shall be intercepted for the purpose of providing or making available facilities reasonably required for:

(a) the detection or discovery of any telecommunications service provided in contravention of any provision of the TO or any regulation made under the TO or any of the terms or conditions of a licence granted under the TO; or

(b) the execution of prescribed authorizations for telecommunications

interception that may from time to time be issued or renewed under the Interception of Communications and Surveillance Ordinance (ICSO) (Cap. 589).

Section 33(2) provides that an order under section 33(1) shall not of itself authorize the obtaining of the contents of any individual message. After consulting the Commerce and Economic Development Bureau, we set out below our reply to each part of the question:

(1) In the past four years, the Chief Executive did not make any order pursuant to section 33(1)(a) of the TO.

(2) and (3) The Chief Executive's exercise of power under section 33(1)(b) of

the TO relates to sensitive operational arrangement in connection with provision of facilities required for authorized covert operations under the ICSO. As such, we cannot provide the relevant statistics.

(4) The Chief Executive has exercised the power under section 33 of the

TO in strict accordance with the law, and such an order shall be only for the purpose of providing or making available facilities reasonably required of the operations referred to in section 33(1). Section 33(2) of the TO also stipulates that the order under section 33(1) shall not of itself authorize the obtaining of contents of any individual message. Hence there is no question of interference with the privacy of communications.


5831

Speculations on Hong Kong Dollar 3. MR DENNIS KWOK: President, it has been reported that speculators, in anticipation of further depreciation of the Renminbi (RMB), may use the Hong Kong dollar (HKD) as a proxy to speculate on RMB. Moreover, it is expected that the United States (US) Federal Reserve's decisions to raise the interest rate will lead to a rise in local interest rates, given the peg of HKD to the US Dollar under the Linked Exchange Rate System (LERS). In this connection, will the Government inform this Council:

(1) whether the authorities have policies and measures in place to

maintain the stability of HKD in face of massive selling of HKD as a proxy of RMB speculation by hedge funds and other speculators, so as to mitigate the risks of recurrence of situations similar to those in 1998 during the Asian Financial crisis; whether the authorities have assessed if the poor returns of the Exchange Fund in the past year will weaken the ability of the Hong Kong Monetary Authority to deal with speculations on HKD in the near future; and

(2) given the recent market turmoil in China, the anticipated further

depreciation of RMB, as well as the HKD exchange rate hitting the weak-side convertibility undertaking on several occasions, what policies the authorities have put in place to ensure that market confidence in LERS will not be adversely affected?

FINANCIAL SECRETARY: President, Hong Kong's monetary and financial system is robust. We have ample fiscal and foreign exchange reserves. The Linked Exchange Rate System (LERS) has been the cornerstone for Hong Kong's monetary and financial stability for over 30 years. With these, we are able to cope with sizeable funds flowing into and out of Hong Kong. We are also experienced in dealing with the challenges brought about by global economic fluctuations, and maintaining the stability of Hong Kong's monetary and financial markets. Since the commencement of the United States (US) Federal Reserve's interest rate hike in December 2015, the spreads between Hong Kong dollar and US dollar interest rates have widened. As a result, it is expected that there


would be gradual outflows of funds from the Hong Kong dollar to the US dollar, and that the Hong Kong dollar exchange rate would start easing from the level of 7.75. However, the Hong Kong dollar exchange rate has not yet touched the weak-side Convertibility Undertaking level of 7.85. Since 1997-1998, the resilience of our banking and financial systems has increased significantly. It is now far more difficult for speculators to engineer any "double play" attacks on the Hong Kong dollar. Compared with the position in 1997, the Aggregate Balance of the banking sector, the Monetary Base and foreign currency assets of the Exchange Fund have increased many folds. The relevant figures are tabulated below:

Financial data July 1997 29 January 2016 Aggregate balance (HK$ billion)

1.5 363.4

(+244.4 times) Exchange Fund Bills and Notes (HK$ billion)

98.7 857.1

(+7.7 times) Hong Kong dollar Monetary Base (HK$ billion)

189.6 1,609.5

(+7.5 times) Exchange Fund's foreign currency assets* (US$ billion)

67.6 422.3

(+5.2 times) Note: * Refers to the respective figures in June 1997 and December 2015. The above figures suggest that if speculators were to try to push up the Hong Kong dollar interest rates, the cost would be high. In addition, since the global financial crisis in 2008, governments all over the world have been implementing financial reforms and tightening supervision, making massive speculative activities on the Hong Kong dollar more difficult. The Exchange Fund's foreign currency assets stood at US$422.3 billion. The small negative investment return (-0.6%) reported last year would not impact on our ability to defend the monetary and financial systems.


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Since 2009, the Hong Kong Monetary Authority (HKMA) has introduced seven rounds of countercyclical and other prudential measures which have significantly strengthened the resilience of the banking system in Hong Kong. Our banking sector is robust, with the overall capital adequacy ratio exceeding international standards comfortably, and we do have abundant liquidity. These enable our banking system to meet the challenges arising from market volatility and outflows of funds. Government and the HKMA have since January this year repeatedly explained to the public that Hong Kong's financial system is fully capable of dealing with outflows of funds. We have also reiterated that our determination and ability to maintain the LERS are beyond doubt. At the same time, the International Monetary Fund and a number of large investment banks have published reports confirming the robustness and appropriateness of the LERS. Government and financial regulators would continue to maintain close contact, monitor latest market developments closely, and stand ready to undertake measures to safeguard the stability of Hong Kong's monetary and financial systems. The public should not worry. Applications for Public Housing Quotas by Retiring Disciplined Services Staff Members 4. MR CHAN KAM-LAM (in Chinese): President, under the Civil Service Public Housing Quota Scheme (CSPHQ Scheme), the Civil Service Bureau issues circulars memorandum annually to invite eligible civil servants to apply for civil service public housing (CSPH) quotas for that year. The quotas are divided into "general quota" and "special quota", with the latter earmarked mainly for junior police officers as well as other rank and file officers in the disciplined services who will retire within 10 years. Recently, some retired disciplined services staff members have relayed to me that CSPHQ Scheme cannot address their housing needs. Although they had applied for special quota under CSPHQ Scheme before retirement for allocation of public housing (PH) flats, they had yet to be allocated a PH flat upon retirement and up to the time when they were required to move out of their departmental quarters. In this connection, will the Government inform this Council:


(1) of the number of applications for special quota received from retired and retiring disciplined services staff members in each of the past five years and, among such cases, the number of those in which the applicants were allocated a PH flat; whether the authorities adjusted the relevant quota according to the number of disciplined services staff members eligible for applying for PH flats under CSPHQ Scheme each year;

(2) as I have learnt that some retired disciplined services staff members

now residing in departmental quarters, who had applied twice for special quota but in vain, were rejected when they submitted applications again, of the maximum number of times for which each disciplined services staff member may make such an application; the current number of eligible retired disciplined services staff members who are not allowed to submit applications again because the number of times for which they made such an application has reached the upper limit; as it has been reported that the number of retired disciplined services staff members will peak in the coming few years, whether the authorities will consider relaxing the restriction on the number of times for which that they may make such an application;

(3) given that the disciplined services staff members who have submitted

applications under CSPHQ Scheme before retirement but have yet to be allocated a PH flat may be granted, while their applications are still being processed, concessions whereby they do not have to move out of the quarters immediately upon retirement, of the current number of such staff members who are residing in departmental quarters, as well as the number of such staff members in each of the next three years as anticipated by the authorities; whether the authorities will require such kind of staff members who have yet to be allocated a PH flat to move out of their departmental quarters; and

(4) whether the authorities have studied ways to address the increasing

demand for PH flats from retired disciplined services staff?


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SECRETARY FOR THE CIVIL SERVICE (in Chinese): President, the Government set up the "Civil Service Public Housing Quota" Scheme (the Scheme) to provide, on a discretionary basis, a better opportunity for lower-rank civil servants to obtain public housing. It is not related to terms of appointment or fringe benefits. Whether an eligible applicant under the Scheme will be allocated a unit will be affected by changes in the demand for and supply of public housing, the estate or district that he chooses and the priority of the other applicants vis-à-vis his. There are a "General Quota" and a "Special Quota" (SQ) under the Scheme. The former is for civilian and disciplined services staff who are not eligible for the SQ while the latter is designed for eligible disciplined services staff. Separately, under the established policy of the disciplined services departments (DSDs), they provide their married officers with disciplined services departmental quarters subject to the availability of resources as a benefit outside their conditions of service. Officers occupying the departmental quarters shall move out of the units within two months from the date of their departure from service or upon commencement of pre-retirement leave. The heads of departments may extend the time limit by a month having regard to the justifications put forward by the officers concerned. In addition, an officer who has made an application under the Scheme may be allowed to stay in the quarters while his application is being processed. Notwithstanding that, he would be required to vacate his quarters within two months of the announcement of the result of his application regardless of whether it is successful. Our reply to the four parts of the question is as follows, seriatim:

(1) The number of applications and the allocation progress under the SQ in the past five years are set out below:

Scheme Year

Number of applications

Allocation progress

PRH HOS Total PRH

(as at 31 Dec 2015) HOS

(170 odd quota places) 2010-2011 1 072 237 1 309 305 quota places have

been allocated All quota places have been allocated


Scheme Year

Number of applications

Allocation progress

PRH HOS Total PRH

(as at 31 Dec 2015) HOS

(170 odd quota places) 2011-2012 1 428 179 1 607 230 quota places have

been allocated All quota places have been allocated

2012-2013 2 175 119 2 294 Allocation of new flats has been completed while allocation of refurbished flats is ongoing

All quota places have been allocated

2013-2014 2 813 120 2 933 Allocation of new flats has been completed while allocation of refurbished flats is ongoing

103 quota places have been allocated

2014-2015 3 017 218 3 235 Allocation of new and refurbished flats is ongoing

106 quota places have been allocated

PRH - Public Rental Housing quota HOS - Home Ownership Scheme quota The quota and categories of PRH available for allocation each year are subject to approval of the Hong Kong Housing Authority (HA) taking into account the actual circumstances. The HA has endorsed the increase of 100 units for the quota each year beginning from the 2015-2016 Financial Year to the 2018-2019 Financial Year, that is, making available a total of 1 000 additional quota places in the four years. Moreover, we have also started to improve the allocation arrangements under the Scheme with the objective of optimizing utilization of the limited resources.

(2) No upper limit on the number of times of applications is set under

the Scheme. Serving officers with at least two years of continuous service and fulfilling other eligibility criteria can start applying. In the relevant annual circular memorandum, we clearly set out the


5837

timing for submission of applications and the relevant eligibility criteria under the Scheme for retired disciplined services officers occupying departmental quarters.

(3) According to the information provided by the Security Bureau, as at

1 January this year, a total of 1 283 DSD retirees from the Hong Kong Police Force, Fire Services Department, Correctional Services Department, Customs and Excise Department, Government Flying Service and Immigration Department were still occupying departmental quarters. Since the family circumstances and individual preferences vary from one officer to another, at present we are unable to make an accurate estimate of the number of disciplined services officers who will apply for the PRH quota and continue to occupy departmental quarters when their applications are being processed in the coming three years.

(4) Other than implementing the Scheme, the Government has

introduced other measures like the Home Purchase Scheme, Housing Loan Scheme and Non-accountable Cash Allowance to meet the housing needs of civil servants. We will continue to maintain liaison with the staff sides with whom we will co-operate to improve the operational efficiency of the Scheme.

Provision of Assistance for Elderly People with Disabling Hearing Loss 5. PROF JOSEPH LEE (in Chinese): President, according to a report released by the World Health Organization last year, about one-third of elderly people (i.e. persons aged 65 or above) are suffering from disabling hearing loss. It has been reported that some merchants, knowing well that the continuous increase in the elderly population will bring about enormous business opportunities, have set up audiology centres to offer hearing tests and sell hearing aids to elderly people. Due to a lack of regulation, some audiology centres sell hearing aids at fluctuating prices, and have not employed any audiologist or audiology technician, with the work of conducting hearing tests, drafting reports on hearing tests and fitting hearing aids for elderly people being


entrusted to salespersons only. As a result, some elderly people have bought unsuitable yet expensive hearing aids, with their hearing impaired rather than improved. In this connection, will the Government inform this Council:

(1) whether it has compiled statistics on the current number of elderly

people with disabling hearing loss in Hong Kong; if it has, of the relevant figures; if not, the reasons for that, and whether it will compile such statistics; whether it has any targeted policy in place to provide assistance for such elderly people; if it does, of the details; if not, the reasons for that;

(2) whether it knows if general outpatient clinics of the Hospital

Authority (HA) will arrange hearing tests, audiological treatment and fitting of hearing aids for elderly people seeking consultations at such clinics; if such services will be arranged, of the specific procedure and the average waiting time for these three types of services at present; if not, the reasons for that;

(3) whether it knows the current respective (i) ratios of audiologists and

audiology technicians to the population, and (ii) numbers of these two types of personnel employed by HA and the Department of Health; whether it has assessed if there are now sufficient numbers of these two types of personnel in Hong Kong; if it has and the assessment outcome is in the negative, whether it has specific policies and measures in place to address the problem; if it does, of the details; if not, the reasons for that; and

(4) given that quite a number of elderly people lack the financial means

to buy hearing aids, which are sold at a price ranging from as high as several thousand to several tens of thousand dollars, whether the authorities have plans to offer subsidy to elderly people, and whether the costs for hearing tests and hearing aids will be included (with no upper limit) in the scope of application of the Elderly Health Care Voucher Scheme to enhance the safety and quality of life of elderly people; if they do, of the details; if not, the reasons for that?


5839

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, my reply to the questions raised by Prof Joseph LEE on the provision of healthcare services for elderly people with hearing problems is as follows:

(1) and (2)

According to a survey on persons with disabilities and chronic diseases conducted by the Census and Statistics Department in 2013, there were about 117 600 persons with hearing difficulty aged 65 or above. The definition of "persons with hearing difficulty" includes those who perceived themselves as having long-term difficulty in hearing or using specialized hearing aids or rehabilitation tools at the time of survey.

Patients under the care of the general out-patient clinics (GOPCs) of the Hospital Authority (HA) can be categorized into two major types, namely chronic disease patients with stable medical conditions (such as those with diabetes mellitus or hypertension, and so on) and episodic disease patients with relatively mild symptoms (such as those suffering from influenza, cold and gastroenteritis). For patients with hearing difficulty, GOPC doctors will refer them to the ear, nose and throat (ENT) specialty for follow-up according to their clinical conditions and needs.

The ENT specialty of the HA provides appropriate assessment and treatment for persons with hearing difficulty. In 2015, the HA provided audiological services to a total of about 8 000 in-patient audiology attendances and 80 000 out-patient audiology attendances. The HA does not maintain statistical record on the waiting time for audiological assessment and remedial treatment services. The median waiting time for hearing aid prescription and fitting services is nine weeks.

(3) There are currently 29 audiologists and audiology technicians under

the HA. They provide timely hearing tests and treatment according to the diagnosis made by ENT specialists and the needs of patients.


At present, the Department of Health (DH) employs four audiologists in Child Assessment Service and Student Health Service to provide audiology-related services. The HA and the DH will review the manpower requirement from time to time having regard to the service demand.

The Government conducted a Health Manpower Survey on healthcare personnel in 2009. According to the survey, the responding institutions employed a total of 62 audiologists and 50 audiology technicians. As the data collected from the survey may not represent the total number of audiologists and audiology technicians in Hong Kong, the statistics on the ratio of audiologists and audiology technicians to the total population are not compiled.

(4) Under the Elderly Healthcare Voucher Scheme, eligible elders can

use healthcare vouchers to pay for healthcare services provided by healthcare professionals enrolled in the scheme, including hearing assessment services provided by enrolled doctors. However, healthcare vouchers cannot be used solely for purchasing products such as medication or medical equipment. As audiologists and audiology technicians are currently not subject to statutory registration, the vouchers cannot be used for services provided by them. The HA provides, through the Samaritan Fund (SF) safety net, financial assistance for needy patients who have met the specified clinical criteria and passed the means test to meet the expenses for designated Privately Purchased Medical Items or new technologies required in the course of medical treatment which are not covered by the standard fees and charges in public hospitals and clinics. The items supported by SF also include hearing aids, and the replacement of external speech processors of cochlear implants and other accessories. Needy patients who have met the specified clinical requirements will be referred to SF for financial assistance.


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Review of Territory-wide System Assessment 6. DR LAM TAI-FAI (in Chinese): President, earlier on, the Education Bureau (EDB) accepted the recommendations set out in a report submitted by the Coordinating Committee on Basic Competency Assessment and Assessment Literacy (the Committee) after its review on the Territory-wide System Assessment (TSA), including the implementation of a tryout study (the Tryout) at Primary 3 level (P3) this year. The Committee envisages that the data and results of the Tryout will be available in October this year, a review report will be submitted to the authorities in November and the Online Question Bank can be updated by the end of this year. The Committee considers that in order not to affect the effectiveness of the Tryout, the Tryout should be of a representative scale, and it therefore recommends that 50 primary schools (representing about 10% of the primary schools in the territory) of different types be invited to participate in the Tryout (if an individual school declines the invitation, the authorities will invite another school of the same type as replacement), while other schools may participate on a voluntary basis. The Committee also recommends a territory-wide implementation of the Tryout scheme next year after drawing a conclusion on the effectiveness of the Tryout. However, some of the members of the education sector and Members of this Council are dissatisfied that the Government has, before reaching a conclusion that the Tryout is effective, openly stated that the relevant scheme will be implemented territory-wide next year. They also call on parents in the territory to refuse to let their children participate in the TSA under the Tryout and to uphold the proposition that the P3 TSA should be abolished in the long run. In this connection, will the Government inform this Council:

(1) whether it knows the reasons and justifications for the Committee to

set at 50 the number of primary schools to be invited to participate in the Tryout;

(2) of the standards, principles and conditions based on which it will

select the 50 primary schools to be invited to participate in the Tryout;

(3) of the person or organization responsible for drawing up the

selection standards, principles and conditions mentioned in (2);


(4) of the relevant standards, principles and conditions which the 50 primary schools to be invited to participate in the Tryout need to meet;

(5) of the proportions of various types of schools in the 50 primary

schools to be invited to participate in the Tryout; among them, the respective numbers of Direct Subsidy Scheme schools, government schools, subsidized schools and other types of schools;

(6) when it will issue letters inviting the primary schools concerned to

participate in the Tryout, and of the deadline for them to reply; (7) whether it will publish a list of the primary schools invited to

participate in the Tryout, as well as a list of the primary schools which have accepted the invitation; if it will, of the details; if not, the reasons for that;

(8) whether it will publish a list of the primary schools which have

refused to participate in the Tryout and the reasons for their refusal; if it will, of the details; if not, the reasons for that;

(9) whether all of the primary schools enrolling voluntarily to

participate in the Tryout will be accepted; if not, of the reasons for that; if they will, whether it has assessed if such an approach will result in the data of the Tryout becoming biased or unbalanced, thus compromising the representativeness, credibility and recognition of the Tryout;

(10) whether the authorities will consider shelving the Tryout in the event

that the number of primary schools accepting the invitation falls short of 50 or is below a certain number of primary schools in the end; if they will, of the details; if not, the reasons for that; whether there will be any alternative plans;

(11) whether it has assessed the minimum number of students needed to

participate in the TSA under the Tryout if the data are to have representativeness, credibility and recognition; if it has, of the details; if not, the reasons for that;


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(12) how it monitors and ensures that the level of difficulty and the question types of the assessment items of TSA as recommended under the Tryout can accurately assess the basic competencies of P3 students;

(13) how it ensures the primary schools which have accepted the

invitation to participate in the Tryout will not drill their students for the purpose of coping with the TSA in the Tryout;

(14) how it ensures and convinces stakeholders of the education sector

that the data obtained from the Tryout will not be used as a tool by the officials of EDB for determining the banding and performance of a school, or even as a justification for closure of schools;

(15) whether it will set up an independent committee to study and review

the data obtained from and the effectiveness of the Tryout; if it will, of the details; if not, the reasons for that;

(16) of the standards and principles based on which it will assess if the

Tryout is effective and has achieved its objectives; (17) whether the authorities will, prior to the official launch of the

Tryout, consult organizations such as the Hong Kong Professional Teachers' Union, the Hong Kong Federation of Education Workers, the Subsidized Primary Schools Council, the Hong Kong Aided Primary School Heads Association and the Grand Alliance of Parents on TSA, as well as the Panel on Education of this Council, and solicit their support; if they will, of the details; if not, the reasons for that;

(18) whether it will conduct public consultation on the specific

arrangements of the Tryout; if it will, of the details; if not, the reasons for that;

(19) whether the Secretary for Education will attend the public hearing(s)

on the Tryout to be held by the Panel on Education of this Council; if he will, of the details; if not, the reasons for that;


(20) of the circumstances under which it will implement a further Tryout next year;

(21) of the circumstances under which it will consider completely

abolishing the P3 TSA; (22) whether it will implement a Tryout at Primary 6 level after the

publication of the review report on the Tryout at P3; if it will, of the details; if not, the reasons for that; and

(23) of the reasons why the Government has, before reaching the

conclusion that the Tryout is effective, openly stated that the Tryout scheme will be implemented territory-wide next year?

SECRETARY FOR EDUCATION (in Chinese): President, the Secretary for Education announced in late October 2015 that the Coordinating Committee on Basic Competency Assessment and Assessment Literacy (the Committee) was tasked to conduct a comprehensive review on the Territory-wide System Assessment (TSA). The review is premised on the promotion of quality education, the learning needs of students, professionalism, and mutual trust among stakeholders. Two working groups have been set up under the Committee to study in detail the reporting and administration as well as the papers and question design of TSA respectively, with a view to recommending short, medium and long-term improvement measures. The Committee submitted preliminary recommendations to the Education Bureau on 4 February 2016. The Education Bureau is studying in detail and considering the recommendations. The reply to the questions raised by Dr LAM Tai-fai is as follows:

(1) to (14)

According to the Committee's preliminary recommendations, the major objectives of the 2016 Tryout Study are:


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(i) to validate whether the TSA papers and item design revamped based on the recommendations on enhancement from the working group would uphold the reliability and validity while aligning with the requirements of basic competencies of Primary 3 students to tie in with the curriculum and student learning;

(ii) to try out whether different reporting formats could meet the

needs of individual school;

(iii) to strengthen the provision of professional support measures for schools on homework policy, assessment literacy, enhancement of learning and teaching (for example, via the promotion of reading) as well as TSA in the course of the Tryout. Public education would also need to be strengthened so as to enhance stakeholders' awareness of the TSA as part of the concept of "assessment for learning" with a view to enhancing quality education;

(iv) at the territory-wide level, to keep track on the attainment of

basic competencies of all students in Chinese Language, English Language and Mathematics and to provide continuous data for other related studies; and

(v) to demonstrate in good faith the low-stakes nature of TSA that

it would not exert pressure on school sponsoring bodies, schools and parents; and to foster mutual trust through participation, sharing and collaboration in promoting quality education with a view to facilitating effective and pleasurable student learning.

The Committee has recommended that the number of primary schools participating in the 2016 Tryout Study will be around 50 of different types (about 10% of the primary schools in the territory with each school participating as a unit). Schools will be invited on the basis of various factors, including districts, types of schools (government, aided, Direct Subsidy Scheme) and school size to ensure the level of representation, reliability and validity.


The Committee is aware of the community concerns about TSA. Thus, in recommending the 2016 Tryout Study, the Committee attaches much consideration and value to the decisions of schools. The Committee is of the view that the invited schools can even decide if they would participate with reference to their school-based situations. Other schools are also welcome to participate on a voluntary basis. In inviting schools and analysing data in the Tryout Study, various factors, instead of a single individual criterion will be considered in an integrated manner to ensure the level of representation. As provision of support measures forms an integral part of the Tryout Study, it is believed that schools will be interested in joining in. Schools will make professional judgment of whether to participate while making reference to and balancing views of different stakeholders. With reference to the experience of the voluntary participation in Primary 6 TSA in even-numbered years, participating schools were not confined to a particular type or size. Upon finalizing the list of participating schools, the Hong Kong Examinations and Assessment Authority (the HKEAA) is expected to take into account schools' situation on the arrangement of making public the participating schools. Briefing sessions will be organized for the participating schools on the administration arrangements and matters requiring attention. The HKEAA will also provide a designated phone line to answer questions from participating schools.

As for the assessment papers and question design of the 2016 Tryout Study, the HKEAA will follow up with its P3 Moderation Committee in accordance with the principles, directions and content as recommended by the Committee for revising the assessment papers, with a view to achieving the purpose of the Tryout Study, that is to validate the level of difficulty and the design of the assessment items for accurately assessing the basic competencies of P3 students.

As schools' participation in the Tryout Study is voluntary by nature, the Committee believes that there is no incentive for schools to


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over-drill and impose pressure on their students. In parallel, to address the problem of over-drilling, the Committee has proposed in the preliminary recommendations a package of various improvement and support measures addressing specific concerns, including improvement on item and assessment design, trying out different formats of school report, provision of training on enhancing assessment literacy of the education sector, online learning and teaching tools and exemplars as well as the promotion of communication among different stakeholders. Besides, the Education Bureau will strengthen internal guidelines stating explicitly that the Education Bureau will not use TSA data to assess the performance of a school (for example, External School Review). From the 2016-2017 school year, TSA should be removed from the focus questions under "8.1 Academic Performance" of the "Performance Indicators" to alleviate schools' concerns. In addition, provision on schools' good use of TSA data to provide feedback to learning and teaching should be further emphasized under "3.3 Performance Assessment".

(15) to (23)

The Committee, its Working Group on TSA Administration and Reporting and Working Group on TSA Papers and Question Design, will follow up on the implementation of the Tryout Study and monitor the progress. They will also provide views on the data and experience obtained in the Study.

In the process of the review, the Committee has met different stakeholders, including teachers' representative bodies, the Subsidized Primary Schools Council, the Hong Kong Aided Primary School Heads Association, parents' representative bodies (the Federations of Parent-Teacher Associations for the 18 districts, TSA parents concern groups), and so on, for their views on the Tryout Study. The Committee will continue to make reference to the views collected from time to time through various means to review the medium- and long-term recommended directions on the


development of Basic Competence Assessment and the enhancement of assessment literacy.

The Committee and its Working Groups have studied in detail the purposes, function and implementation situation of TSA. They reaffirm the intent and value of the establishment of TSA and recognize the functional use of TSA data to provide feedback to learning and teaching. It is recognized that modifications to administrative arrangement (for example, conducting TSA in alternate years or on a sampling basis) are unable to effectively address the various concerns in the community. To reduce over-drilling for TSA, and to reflect more clearly the intent of Basic Competency Assessment, the Committee takes the view that the assessment papers and question design could be adjusted, and different formats of school report could be adopted. Related arrangements should be tested out in the form of tryout in 2016. The outcome of the 2016 Tryout Study should be appropriately adopted and enhanced in the 2017 assessment arrangement, which includes the provision of professional support measures for schools. Related information can provide reference for the medium- and long-term development of TSA and the promotion of quality education.

The Education Bureau considers the preliminary recommendations of the Committee effective in addressing the problems related to the implementation of TSA. The Education Bureau hopes to work with all stakeholders (including students, parents, teachers, principals, schools and school sponsoring bodies) in concerted effort to cease excessive drilling and unnecessary pressure, enabling the development of TSA will be on the right track in the long run. At the present stage, time and space should be allowed in finalizing the details for implementing the Tryout Study, with the focus on providing feedback of the experience of the 2016 Tryout Study to the future TSA. The Education Bureau will report the work progress to the Panel on Education in due course.


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Red Packets and Donations Received by Monks and Nuns 7. MR LEUNG YIU-CHUNG (in Chinese): President, it has been reported that due to old age or other reasons, most of the monks and nuns in Hong Kong rarely officiate at or participate in religious activities of festivals and funerals. As a result, some mainland monks, nuns or individuals have been invited to Hong Kong to officiate at or participate in religious activities and they have received red packets afterwards. Moreover, some Mainlanders, after entering Hong Kong with travel endorsements, have dressed as monks and nuns and appealed for money or sold prayer beads on the streets. On the other hand, it has been reported that last year, a local nun purchased a luxurious apartment with cash, and the source of the funding concerned was suspected to be worshippers' donations. In this connection, will the Government inform this Council:

(1) whether the authorities conducted any investigation in the past three years into incidents of Mainlanders coming to Hong Kong to officiate at or participate in religious activities; if they did, of the outcome, including how they handled substantiated cases of Mainlanders coming to Hong Kong to officiate at or participate in religious activities and receiving red packets afterwards; if they did not conduct any investigation in this regard, the reasons for that;

(2) of the actions to be taken by the authorities to stop Mainlanders,

dressed as monks and nuns, from appealing for money or selling prayer beads on the streets; and

(3) whether the authorities have studied if monks and nuns, including

the nun in the aforesaid case, are required to report the red packets or donations received from worshippers as taxable income and pay relevant taxes for such income; if they have studied and the outcome is in the affirmative, whether the authorities took any follow-up action in the past three years in respect of cases in which the monks and nuns concerned had failed to file tax returns and pay taxes; if they did, of the details; if not, the reasons for that?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, to protect the freedom of religious belief, the Government does not interfere with religious activities conducted or participated by individuals whose behaviour shall,


however, abide by the laws of Hong Kong. Upon consultation with relevant bureaux and departments, our consolidated reply to parts (1) to (3) of the questions is as follows:

(1) Members of religious groups may apply to the Immigration Department (ImmD) for necessary visas or entry permits if they want to come to Hong Kong to officiate at activities. The ImmD is committed to the combat and prevention of acts in breach of the conditions of stay by visitors (including Mainland visitors), such as engaging in unlawful employment. The ImmD will take measures and carry out enforcement actions, conduct detailed investigation, and press charges against offenders when there is sufficient evidence of offence. The ImmD does not maintain statistical figures of investigation on Mainlanders coming to Hong Kong to officiate at or participate in religious rituals.

Under the current legislation, visitors are not allowed to take up

employment in Hong Kong, whether paid or unpaid, without the permission of the Director of Immigration. Offenders are liable on conviction to a maximum fine of $50,000 and to imprisonment for up to two years. Aiders and abettors are subject to the same penalty.

(2) Any person who begs or gathers alms at any public place may

contravene section 26A of the Summary Offences Ordinance (Cap. 228). On conviction for a first or second offence, the person is liable to a fine of $500 and to imprisonment for one month; and for a third or subsequent offence, to a fine of $500 and to imprisonment for 12 months. The Police will initiate investigation against persons suspected of engaging in begging activities in Hong Kong, and take appropriate actions based on the circumstances of each case. Regardless of whether the persons concerned are Hong Kong residents, the Police will consider whether to lay related charges based on the evidence available. The Police call on the public to make a report if they encounter suspected illegal begging or fund-raising activities by "persons who appear to be monks" or by other persons.


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(3) Under the Inland Revenue Ordinance (IRO), salaries tax shall be charged on every person in respect of his income arising in or derived from Hong Kong from any office or employment of profit or any pension, and profits tax shall be charged on every person carrying on a trade, profession or business in Hong Kong in respect of his assessable profits arising in or derived from Hong Kong. Whether a sum received under certain specific circumstances is chargeable income or assessable profit shall be determined after consideration of all details of individual cases. If there is information which indicates that any person may have evaded tax or submitted incorrect return, the Inland Revenue Department (IRD) will follow up as appropriate. Given the official secrecy provision under the IRO, the IRD will not disclose tax information of any person or comment on individual cases.

Remuneration and Employment Conditions for Green Minibus Drivers 8. MR TANG KA-PIU (in Chinese): President, in Hong Kong, the patronage of public light buses (PLBs) ranks the third among all modes of public transport, only after railway and franchised buses. On the other hand, some trade unions of green minibuses (GMBs) have pointed out that the problems of unsatisfactory remuneration and excessively long working hours, etc. persistently faced by PLB drivers have resulted in shortage and ageing of GMB drivers. In this connection, will the Government inform this Council:

(1) whether it has grasped the statistics on GMB drivers in the past

three years, including the number of GMB drivers, their average age, employment mode (i.e. being employed or self-employed), average weekly working hours, average monthly salary, and general conditions of service (e.g. the number of paid leave days); if it has, of the details;

(2) whether it has established a mechanism to discuss, on a regular

basis, with stakeholders (including drivers, trade union representatives and operators) of the GMB trade, so as to understand the work arrangements and remuneration package for drivers, and to explore improvement measures; if it has not, of the reasons for that;


(3) given that the Transport Department (TD) had, in consultation with the GMB trade, devised guidelines on the working hours of PLB drivers, whether the authorities have regularly liaised with operators to gauge how far the guidelines have been complied with, and to ensure that PLB drivers are given adequate rest time, in order to safeguard road safety;

(4) whether it will consider introducing new measures to ensure that

PLB drivers are given adequate rest time, including (i) setting maximum working hours, (ii) following the working and rest time arrangements for bus captains of franchised bus companies (e.g. providing rest breaks and setting fixed meal times), and (iii) with reference to TD's practice of issuing the Guidelines on Bus Captain Working Hours, Rest Times and Meal Breaks to franchised bus companies, issuing similar guidelines to the GMB trade; if it will, of the details; if not, the reasons for that;

(5) whether it knows the current number of GMB operators which have

adopted the practice of using a certain percentage of trading receipts as the basis for calculating drivers' salaries (i.e. revenue sharing arrangement), the number of routes they operate, and the details of the revenue sharing arrangement; whether the authorities have formulated measures or policies (e.g. according priority to operators which have adopted a fixed pay system in granting operating rights) to encourage operators to adopt a fixed pay system, so as to attract more people to join the trade, and to prevent PLB drivers from driving at excessive speed in order to earn a higher income under the revenue sharing arrangement;

(6) as some GMB drivers have relayed to me that upon appointment,

they are required by the operators to pay a specified amount of money to serve as the insurance excess when a traffic accident has occurred, and such an arrangement has resulted in serious wastage of serving drivers and new blood being deterred from joining the trade, whether the authorities have found out which operators require drivers to pay insurance excess at present, and the number of routes they operate; how the Government will address the problem;


5853

(7) as some GMB drivers have relayed to me that the terms and conditions imposed by TD on operators in granting GMB operating rights may affect the work arrangements and remuneration package of GMB drivers, but as such terms and conditions have not been made public, it is therefore difficult for GMB drivers to judge whether the operators have complied with the relevant terms and conditions, whether the authorities can publicize such terms and conditions in future; if they cannot, of the reasons for that; and

(8) as some PLB drivers have pointed out that the authorities are

conducting studies on increasing the seating capacity of PLBs, and the workload of PLB drivers will increase with the addition of passenger seats of PLBs, whether the authorities will, in conducting such studies, explore ways to ensure that GMB drivers will have a share of the economic gains generated by the increase in the seating capacity of PLBs; if they will, of their plans; if not, the reasons for that?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, pursuant to the Road Traffic Ordinance (Cap. 374), each green minibus (GMB) operator (operator) must obtain a Passenger Service Licence (PSL) issued by the Transport Department (TD) before it can operate GMB service. Each PSL stipulates the Public Light Bus (Scheduled) Service Conditions (PSL conditions). Such conditions include, among others, the requirement that an operator must run the service according to the service details (including the routeing, fares, service frequency and vehicle deployment) approved by the TD. The PSL conditions also regulate other operational arrangements (such as requirements with respect to vehicle conditions and that the vehicle shall be driven only by persons employed by the licensee). PSL conditions applicable to GMB routes gazetted in or after 2002 are at Annex 1. In addition, an operator must implement any commitments made in its PSL application, including any arrangements relating to the provision of allowance or incentive to drivers. The TD maintains regular contact with an operator, conducts surprise inspections and carries out PSL mid-term review to ensure the operator's compliance with PSL conditions and implementation of its commitments.


To ensure that an operator will provide service in accordance with the operating hours and service frequency set by the TD and can effectively monitor service quality, it is a PSL condition that an operator must have an employment relationship with its drivers. Same as the employment arrangements in other sectors, employment of drivers by an operator must comply with the Employment Ordinance (Cap. 57) and other relevant legal requirements, including those concerning rest days and holidays. Specific terms of employment (such as actual wages and working hours) are agreed between the employers and the employees. My reply to various parts of Mr TANG Ka-piu's question is as follows:

(1) to (6)

Based on information collected from the operators by the TD in 2012 and 2015, the number of GMB drivers employed remained stable at around 8 000. Of these drivers, around 80% were aged between 50 and 69. Owing to the limitation of statistical information collected, we are unable to provide the average age of drivers. The proportion of drivers being employed on a full-time basis remained at about 70% to 80%.

According to information provided by the operators, as at end 2015, the number of duty hours (including rest time) of a full-time driver, depending on the operational needs and actual arrangements of the different routes (for example, some drivers only work for the peak-hour shift in the morning and/or evening), is about six to 13 hours per day. As mentioned above, arrangements with respect to rest days and holidays must comply with the statutory requirements.

In terms of salary, depending on the actual number of duty hours, the basic salary of each shift was about $330 to $690. For over 80% of the routes (that is, about 300 routes), drivers were employed on the basis of basic salary or basic salary plus fixed-rate allowance. Drivers of the remaining routes (that is, about 50 routes) were employed on the basis of basic salary plus revenue sharing or solely revenue sharing. It is understood that some operators also provided their drivers with meal allowance, safety bonus, overtime allowance and/or holiday allowance. The TD does not have any statistical information on the so-called "insurance excess" paid by some public light bus (PLB) drivers to their operators.


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With reference to the "Guidelines on Bus Captains Working Hours, Rest Times and Meal Breaks" issued to franchised bus companies, and having consulted the trade, the TD promulgated the "Guidelines on Working Hours of GMB Drivers" (Guidelines) in 2000. The Guidelines covers the maximum number of duty hours and driving hours for drivers (a copy of the Guidelines is provided at Annex 2). These upper limits are similar to those set out in the relevant guidelines for bus captains of franchised buses. As mentioned above, the number of duty hours of a full-time GMB driver is about six to 13 hours per day. The work arrangements for these drivers should generally conform to the Guidelines.

The TD holds regular trade meetings with the operators to discuss matters such as manpower and working hours of drivers. The TD also maintains close contact with individual operators regarding their service management and operational matters on a need basis. Should GMB drivers have any views on their work arrangements, the TD stands ready to help reflect such views to the operators. At the most recent trade meeting (in December 2015), the TD once again reminded the operators to plan work arrangements for drivers in accordance with the Guidelines. The department will continue to maintain communication with the trade from time to time about the working hours and other work arrangements of drivers. If necessary, the TD will consider if there is a need to revise the Guidelines. Since the operators are generally small and mid-sized ones, the number of persons employed is relatively small. More flexibility may be needed in terms of manpower deployment and work arrangements to meet passenger demand. The Government understands that the GMB trade has in recent years been experiencing the ageing of drivers and facing difficulties in their recruitment of drivers. The TD has liaised with the Labour Department and arranged operators to join job fairs organized by the latter. In addition, the TD has approached the Correctional Services Department as well as supporting agencies for ethnic minorities and rehabilitated persons. Operators have been encouraged to employ ethnic minorities or rehabilitated persons. It is understood that in order to meet service demand, particularly that during peak hours, some operators have already increased their drivers' salary, deployed manpower in a flexible manner and recruited part-time drivers.


(7) Currently, details of the GMB routes, including information on routeing, operating hours, service frequency and fares, are already uploaded to the TD's website. PSL conditions issued to operators by the TD may be provided to members of the public upon request. In future, the TD will consider uploading the information to its website for easy perusal by the public at all times.

(8) As we have informed the Legislative Council Panel on Transport

(Panel) before, the operating environment of PLBs has become increasingly difficult in recent years. Nearly 60% of the route packages were operating at a loss. Having regard to the cost and manpower issues, there are views from the trade suggesting an increase of seating capacity of PLBs. Meanwhile, although the demand for PLB service has remained generally stable in the past few years, there are quite a number of routes with considerable patronage and may even be in short supply during peak hours. There are also requests from the community for increasing the seating capacity of PLBs. The Government has thus accorded priority to studying increasing the seating capacity of PLBs under the Public Transport Strategy Study.

In the course of the study, we will examine in detail the impact of increasing the seating capacity on the PLB trade, other public transport services, traffic management, and so on. It is worth noting that while increasing the seating capacity may increase the farebox revenue, the operating costs would also be on the rise. Therefore, whether the proposal can help improve the overall operating environment of the PLB trade would require an in-depth study. If the proposal can indeed help improve the overall operating environment of PLBs, we trust that it should also bring positive impact on operators on recruitment and retention of drivers.

We will brief the Panel on the progress of the study in mid-2016, and will strive to complete the study in the third quarter of 2016. If the outcome of the study confirms the feasibility of the proposal of increasing the seating capacity of PLBs, we will immediately commence the preparation for introducing legislative amendments so as to enable an early implementation of the proposal.


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Annex 2

Guidelines on Working Hours of GMB Drivers (Issued by the TD in April 2000)

- Each shift period of GMB drivers, including all rest breaks, should not

exceed 14 hours at the maximum per day; and - The driving hours of GMB drivers (that is, the maximum hours of a shift

period less all rest breaks that last for 15 minutes or more) should not exceed 11 hours per day.

Interchange Concession Schemes for Public Transport 9. MR WONG KWOK-KIN (in Chinese): President, regarding the implementation of interchange concession schemes for public transport, will the Government inform this Council:

(1) whether it knows the details of the interchange concession schemes implemented by the MTR Corporation Limited (MTRCL) in collaboration with green minibus (GMB) operators in each of the past five years, including the route numbers, catchment areas, average daily passenger trips benefited and fare discount rates of the GMB routes concerned and, among such GMB routes, the routes which ceased to offer such interchange concessions and the reasons for that (set out in a table); if it does not know, of the reasons for that;

(2) whether it knows how the additional fare income and costs arising

from the interchange concession schemes are currently shared between MTRCL and GMB operators;

(3) as some members of the public have relayed to me that most of the

interchange concession schemes currently implemented by franchised bus companies are mainly applicable only to some specified combinations of bus routes, easily causing confusion and inconvenience to passengers, whether the Government will require franchised bus companies to simplify their interchange concession schemes; if it will, of the details; if not, the reasons for that; and


(4) of the measures that the Government will take to encourage MTRCL, to introduce, in collaboration with GMB operators and franchised bus companies, more interchange concession schemes?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, it is the Government's policy that public transport services should be run under the Government's regulatory framework by the private sector in accordance with prudent commercial principles to increase operating efficiency. Our fare policy for public transport takes into account the operating costs, public's affordability and operating sustainability. The interchange discount schemes launched by different operators are also implemented under this policy framework, with no subsidy from the Government. Railway is the backbone of Hong Kong's public transport system, complemented by other public transport services. Among the other public transport services, franchised buses are the major mode of road-based public transport, serving areas without direct railway access and providing inter-district service. The primary role of green minibuses (GMBs) is to provide supplementary feeder service (including feeder service to railway stations), and to serve areas where passenger demand is lower or the use of high-capacity transport modes is not suitable. Although some franchised bus routes which run past railway stations may also provide feeder service to railway stations, a bus route generally serves a wider area than that served by a GMB route. In tandem with the continuous development of the MTR network, apart from offering interchange discounts in its own railway network, the MTR Corporation Limited (MTRCL) also launches interchange discount schemes in collaboration with different public transport operators from time to time (including when new railway lines are commissioned), having regard to the needs of the public. Apart from providing concessions to the citizens, such fare schemes can also enhance the complementarity amongst different modes of public transport, and provide more options for residents in districts not covered by the railway network. The interchange discounts apply to passengers who use the same Octopus card to exit the designated MTR stations and then interchange with the designated GMB or franchised bus routes within one hour, or passengers who interchange with the MTR at the designated MTR stations within one hour after taking the designated GMB or franchised bus routes.


5861

As for the bus-bus interchange concession schemes (BBI schemes) mentioned in Mr WONG Kwok-kin's question, their nature and purpose are slightly different from those of the MTR interchange discount schemes above. Since the announcement made in the 2013 Policy Address, the Transport Department and franchised bus companies have been pursuing route rationalization with greater vigour. In addition to the annual Route Development Programme, an "Area Approach" has been adopted to review bus service holistically for a district as a whole, rather than on a route-by-route basis, with a view to maximizing the overall benefits to the district in terms of bus service. BBI schemes are an important aspect of bus route rationalization. Such schemes can complement the rationalization efforts as they can reduce duplicated point-to-point bus routes. Meanwhile, the public may continue to enjoy more extensive bus service at reasonable or even concessionary fares. BBI schemes are thus implemented on the basis of route packages. This means that passengers taking a bus trip via major trunk roads or stops (such as bus-bus interchanges and tunnel toll plazas) may enjoy concessionary Octopus fares when interchanging for a second bus journey. My further reply to the various parts of Mr WONG Kwok-kin's question is as follows:

(1) and (4) The Government has been liaising closely with all public transport

operators and encouraging them to introduce suitable fare concession schemes as far as possible having regard to the principle of financial prudence required of such operators.

Currently, the MTRCL offers interchange discounts for 53 GMB

routes, benefiting a daily average of around 47 500 passenger trips. The amounts of interchange concessions on these 53 GMB routes range from 30 cents to $3 per trip, while the average discount rate is about 13%. The route numbers, catchment areas or route details, fare savings per trip and effective periods in respect of the interchange discounts for GMBs offered by the MTRCL in the past five years are set out in the Annex. Passengers can obtain details of the MTR interchange discount schemes either from the MTRCL's website <www.mtr.com.hk> or at the Customer Service Centres.


(2) The MTRCL, on its own, negotiates with individual GMB operators on the arrangements for sharing fare income as well as expenditure on interchange concessions. This arrangement, which is a commercial decision between the MTRCL and GMB operators, without direct participation from the Government, benefits the passengers as well as both the MTRCL and the GMB operators.

(3) As at end 2015, franchised bus companies offer 360 BBI schemes in

total, covering about 420 routes (accounting for around 70% of all the routes in Hong Kong) and benefiting a daily average of about 160 000 passenger trips. As mentioned above, BBI schemes complement bus route rationalization and bring about convenience to passengers. Some BBI schemes comprise route packages involving more than two bus routes to afford passengers more choices and to meet the needs of passengers bound for different destinations. Passengers may obtain details of BBI schemes at the websites of franchised bus companies, through their service hotlines or at the operators' customer service centres at some interchanges. In addition, when rolling out new BBI schemes, franchised bus companies would usually display notices or distribute flyers to promote the new concessions; District Councils would also be kept informed in the process.

Annex

Details of interchange discounts provided by the MTRCL and GMB operators between 2011 and 2015

Route

No. Catchment areas/Route details

Designated

station for

interchange

(MTR Station)

Fare

applicable for

discount*

Discount

per trip*

Applicable

Octopus

card

Effective

periods

23 Hau Wo Street, Kennedy Town ↔ Pok

Fu Lam (Circular) Kennedy Town $5.5 or below $0.5 Adult

12/2014 to

Present

23M Hau Wo Street, Kennedy Town ↔ Chi

Fu Fa Yuen (Circular) Kennedy Town $5.5 or below $0.5 Adult

12/2014 to

Present

54M Kennedy Town Station ↔ Queen Mary

Hospital (Circular) Kennedy Town $5.3 $0.5 Adult

12/2014 to

12/2015


5863

Route


Designated

station for

interchange

(MTR Station)

Fare

applicable for

discount*

Discount

per trip*

Applicable

Octopus

card

Effective

periods

58 Kennedy Town Station ↔ Aberdeen

(Wu Nam Street) Kennedy Town $6.5 or below $0.5 Adult

12/2014 to

12/2015

58A Kennedy Town Station ↔ Aberdeen

(Wu Nam Street) Kennedy Town $6.5 or below $0.5 Adult

12/2014 to

12/2015

58M Kennedy Town Station ↔ Bel-Air on

the Peak Kennedy Town $6.5 or below $0.5 Adult

12/2014 to

12/2015

10X Chater Road, Central ↔ Scenic

Villas/Sandy Bay

Hong Kong/

Central $7 or below $0.5 Adult

6/2005 to

8/2011

10 Jeffe Road, Causeway Bay ↔ Scenic

Villas/Sandy Bay

Causeway Bay/

Wan Chai/

Admiralty

Above $6.5 $1.0 Adult 6/2005 to

8/2011 $6.5 or below $0.5 Adult

11 Tin Wan Estate ↔ Jeffe Road,

Causeway Bay

Causeway Bay/

Wan Chai/

Admiralty

Above $6.5 $1.0 Adult 6/2005 to

8/2011 $6.5 or below $0.5 Adult

24A Drake Street, Admiralty Station ↔

Shiu Fai Terrace (Circular)

Admiralty/

Wan Chai $4.8 $0.5 Adult

4/2006 to

Present

24M Mount Butler ↔ Drake Street,

Admiralty Station

Admiralty/

Wan Chai $6.8 or below $0.5 Adult

4/2006 to

Present

14M Lan Fong Road, Causeway Bay ↔

Moorsom Road (Circular) Causeway Bay $5.7 or below $0.5 Adult

7/2003 to

Present

21A Lan Fong Road, Causeway Bay ↔ Lai

Tak Tsuen (Circular) Causeway Bay $4.2 $0.4 Adult

11/2011 to

Present

25 Upper Braemar Hill ↔ Causeway Bay

(Circular) Causeway Bay $4.8 or below $0.5 Adult

4/2006 to

Present

31 Tin Wan Estate ↔ Jeffe Road,

Causeway Bay

Causeway Bay/

Wan Chai/

Admiralty

Above $6.5 $1.0 Adult 6/2005 to

8/2011 $6.5 or below $0.5 Adult

49M Tin Hau Station ↔ Braemar Hill

(Circular)

Tin Hau

Station/

Fortress Hill

$5.3 $0.5 Adult 12/2005 to

Present

50 Yiu Tung Estate ↔ Sai Wan Ho

(Circular) Sai Wan Ho $3.7 $0.5 Adult

12/2005 to

Present

7

Wyler Gardens, Kowloon City ↔

Science Museum Road, Tsim Sha Tsui

East (Circular)

Tsim Sha Tsui/

East Tsim Sha

Tsui

$7.2 $1.0 Adult 6/2005 to

Present


Route


Designated

station for

interchange

(MTR Station)

Fare

applicable for

discount*

Discount

per trip*

Applicable

Octopus

card

Effective

periods

79K Park Avenue, Mong Kok ↔ Mong Kok

East Station (Circular)

Mong Kok/

Olympics/

Mong Kok East

$4.7 or below $0.5 Adult 1/2004 to

Present

21K Cherry Street, Tai Kok Tsui ↔ Mong

Kok East Station (Circular) Mong Kok East $4.0 or below $0.5 All

4/2004 to

10/2012

44A Cheung Sha Wan Plaza ↔ Hoi Lai

Estate (Circular) Lai Chi Kok $3.6 $0.5 Adult

7/2007 to

Present

81K Mei Foo Station ↔ Hoi Lai Estate,

Sham Shui Po (Circular) Mei Foo

$4.2 $3.0 Adult#/

Child 2/2005 to

Present $2.9 $2.5

Senior

Citizen

407A Hing Ning Road, Kwai Fong Station ↔

Princess Margaret Hospital

Kwai Fong/

Lai King $4.7 $0.5 Adult

10/2006 to

Present

88B Greenfield Garden ↔ Kwai Fong

Station Kwai Fong $3.5 or above $0.5 Adult

9/2011 to

2/2012

95K Tsuen Wan West Station ↔ Tsuen

Wan Station

Tsuen Wan

West $3.7 $2.8 All

5/2004 to

Present

99 Nina Tower, Tsuen Wan ↔ Riviera

Gardens (Circular)

Tsuen Wan

West $3.3 $0.4 All

12/2003 to

Present

301M

Tsuen Wan West Station Public

Transport Interchange ↔ Tsuen Wan

Station (Circular)

Tsuen Wan

West $3.3 $0.3 All

12/2003 to

Present

409K Tsuen Wan West Station ↔ Cheung

Hang Estate, Tsing Yi (Circular)

Tsuen Wan

West $6.2 $2.0 Adult

10/2008 to

Present

79M King Tung Street ↔ Wong Tai Sin

Station Wong Tai Sin

$3.7 $0.5 Adult 7/2003 to

Present $2.6 $0.3 Adult

79S King Tung Street ↔ Diamond Hill

Station (Circular) Diamond Hill $3.7 $0.5 Adult

9/2010 to

Present

49 Shun Tin ↔ Kowloon City Ferry

(Circular) Choi Hung

Above $3.9 $0.5 Adult 9/2007 to

Present $3.9 or below $0.3 Adult

54 Shun Tin ↔ Lok Fu Choi Hung $4.2 $0.3 Adult 5/2004 to

Present

54M Shun Tin ↔ Ping Shek (Circular) Choi Hung $4.2 $0.3 Adult 8/2006 to

Present


5865

Route


Designated

station for

interchange

(MTR Station)

Fare

applicable for

discount*

Discount

per trip*

Applicable

Octopus

card

Effective

periods

1A Sai Kung ↔ Choi Hung Public

Transport Terminus Choi Hung $8.0 $0.5 Adult

2/2011 to

4/2013

1 Sai Kung ↔ Telford Plaza, Kowloon

Bay

Choi Hung/

Kowloon Bay $8.0 $0.5 Adult

2/2011 to

4/2013

106 Po Lam ↔ Kowloon Bay Ngau Tau Kok $7.2 or below $0.5 Adult 4/2005 to

Present

47 Shun Lee ↔ Fuk Tong Road, Tsui

Ping (Circular) Kwun Tong $5.2 or below $0.3 Adult

12/2008 to

Present

59 Tsui Ping Estate South ↔ Hip Wo

Street (Circular) Kwun Tong

$3.4 $0.5 Adult 12/2002 to

Present $2.7 $0.3 Adult

59M Tsui Ping Estate South ↔ Fuk Tong

Road Kwun Tong $2.7 $0.3 Adult

12/2002 to

Present

71A Po Tat Estate ↔ Lam Tin Station

(Circular) Lam Tin $4.0 $0.6 Adult

10/2004 to

Present

71B Phase 5, Sau Mau Ping Estate ↔ Lam

Tin Station Lam Tin $4.0 $0.6 Adult

10/2004 to

Present

76B

United Christian Hospital ↔ Yau Tong

Public Transport Interchange Lam Tin $5.1 $0.5 Adult

4/2005 to

Present United Christian Hospital ↔ Lam Tin

Public Transport Interchange (Circular)

23B Yan Oi Court ↔ Cha Kwo Ling Lam Tin $2.4 $0.2 Adult 9/2011 to

4/2012

23M Yan Oi Court ↔ Sin Fat Road, Lam

Tin Station Lam Tin $2.4 $0.2 Adult

9/2011 to

4/2012

23C Laguna City ↔ Cha Kwo Ling Road,

Yau Tong Station (Circular)

Lam Tin/

Yau Tong $2.4 $0.2 Adult

9/2011 to

4/2012

101M Hang Hau Station ↔ Sai Kung Hang Hau $9.0 $1.0 Adult 11/2002 to

Present

15M Po Lam Station ↔ Hong Sing Garden Po Lam $4.2 or below $0.5 Adult 10/2002 to

Present

17M Po Lam Station ↔ Tsui Lam Po Lam $3.7 $0.5 Adult 10/2002 to

Present

112M

LOHAS Park Station Public Transport

Interchange ↔ Tseung Kwan O

Industrial Estate (Chun Cheong Street)

LOHAS Park $4.5 or below $0.5 Adult 5/2015 to

Present


Route


Designated

station for

interchange

(MTR Station)

Fare

applicable for

discount*

Discount

per trip*

Applicable

Octopus

card

Effective

periods

810 Sha Tin Central ↔ Villa Athena, Ma

On Shan (Circular)

Sha Tin/

Tai Shui Hang $5.9 or below $0.5 All

12/2004 to

Present

804 Kwong Yuen ↔ Hin Keng City One $5.2 or below $0.5 All 12/2004 to

Present

808P Heng On Estate ↔ Prince of Wales

Hospital City One $6.0 or below $0.5 All

12/2004 to

4/2012

808 Kam Ying Court ↔ Prince of Wales

Hospital

City One/

Ma On Shan $6.0 or below $0.5 All

12/2004 to

4/2012

803 Hin Keng ↔ Lee On Ma On Shan $7.2 or below $0.5 All 12/2004 to

Present

807B University Station ↔ Wong Chuk Wan

(Circular)

Ma On Shan/

Wu Kai Sha $8.0 or below $0.5 All

12/2004 to

Present

807K University Station ↔ Tseng Tau Ma On Shan/

Wu Kai Sha $7.5 or below $0.5 All

12/2004 to

Present

78

Lok Ma Chau (San Tin) Public

Transport Interchange ↔ Tai Lam

Tunnel Bus Interchange

Kam Sheung

Road $8.0 or below

$2.5 Adult#

10/2004 to

Present $1.5

Child/

Senior

Citizen

78A

Pat Heung Road (near Tai Lam

Bus-bus Interchange) ↔ Kam Sheung

Road Station

Kam Sheung

Road $5.5

$2.5 Adult#

10/2004 to

Present $1.5

Child/

Senior

Citizen

77 Lok Ma Chau (San Tin) Public

Transport Interchange ↔ Tin Shui Wai Yuen Long $9.3 $1.0 All

12/2003 to

Present

611 Shan Pui Road ↔ Fau Tsoi Street

(Circular) Yuen Long $3.6 $0.3 Adult

10/2009 to

Present

611A Yuen Long Station ↔ Shan Pui Road


10/2009 to

Present

611B Kwan Lok Lane ↔ Yuen Long Station


10/2009 to

Present

33 Tai Fung Street, Yuen Long ↔ Ha Pak

Nai Tin Shui Wai $11.0 or below $0.5 All

12/2003 to

Present

34 Tai Fung Street, Yuen Long ↔ Lau

Fau Shan Tin Shui Wai $6.3 or below $0.5 All

12/2003 to

Present


5867

Route


Designated

station for

interchange

(MTR Station)

Fare

applicable for

discount*

Discount

per trip*

Applicable

Octopus

card

Effective

periods

34A Ha Tsuen, Yuen Long ↔ Lau Fau

Shan Tin Shui Wai $6.3 or below $0.5 All

7/2007 to

Present

35 Tai Fung Street, Yuen Long ↔ Tsim

Bei Tsui, Sha Kiu Tin Shui Wai $8.8 or below $0.5 All

12/2003 to

Present

46 Tuen Mun Fu Tai Estate ↔ Tuen Mun

Town Centre (Circular) Siu Hong $4.7 $1.0 All

12/2003 to

Present

45 Tai Hing Garden ↔ Tuen Mun Town

Centre (Circular) Tuen Mun $3.2 $0.3 All

12/2003 to

Present

501A Luen Wo Hui ↔ Yung Shing Court

(Circular) Fanling $4.5 $0.5 All

6/2006 to

Present

501K Fanling Station ↔ Yan Shing Court

(Circular) Fanling $4.5 $0.5 All

5/2005 to

Present Notes: * Since section fares apply to some GMB routes, there may be more than one fare category that is applicable

for interchange discount for the same GMB route and the discount may therefore be different. # Adult Octopus card also includes Personalized Octopus card encoded with "Student Status".

Safety Use of Household Cleaners 10. DR CHIANG LAI-WAN (in Chinese): President, according to the Indoor Air Quality objectives (Good Class) for offices and public places drawn up by the Environmental Protection Department, the 8-hour average concentrations of Total Volatile Organic Compounds (TVOC) and Formaldehyde (HCHO) in air should be no more than 261 parts per billion by volume (ppbv) and 81 ppbv respectively. It has recently been reported in the press that, according to the results of a test, the concentrations of TVOC and HCHO in the gases emitted indoor from various household cleaners (cleaners) sold in Hong Kong exceeded the aforesaid objectives. The TVOC concentrations in the gases emitted by some cleaners exceeded the relevant objective by more than 50% to 75 times, while those of HCHO exceeded the relevant objective by nearly twofold to 12 times. As pointed out by a medical specialist, prolonged exposure to high


concentrations of TVOC and HCHO may cause rhinitis or sore throat, and may even increase the risk of cancer. In this connection, will the Government inform this Council:

(1) whether it will set, with reference to the relevant international standards, upper limits on the concentrations of TVOC and HCHO in cleaning products sold in Hong Kong; if it will, of the details; if not, the reasons for that;

(2) given that information on the product ingredients and place of origin

is not included in the labels on some cleaning products sold in Hong Kong, whether the authorities currently monitor the label contents of such products; if so, of the details; if not, the reasons for that and whether the authorities will review the labelling requirements;

(3) whether it has stipulated safety standards for the composition of

cleaning products; if it has, of the penalty for selling products in breach of the standards, and whether it has regularly conducted sample checks on the cleaners sold in Hong Kong to see if they comply with the standards; if it has, of the details; if not, the reasons for that; and

(4) whether it has put in place measures to enhance the public's

understanding of the proper ways to use various kinds of cleaners, so as to mitigate the effect of improper use of cleaners on indoor air quality; if it has; of the details; if not, the reasons for that?

SECRETARY FOR THE ENVIRONMENT (in Chinese): President, to improve indoor air quality (IAQ) for safeguarding public health, the Environmental Protection Department (EPD) has implemented the Indoor Air Quality Certification Scheme for Offices and Public Places (the IAQ Certification Scheme) since 2003 and set IAQ objectives for the relevant air pollutants, including total volatile organic compounds (TVOC) and formaldehyde. Under the IAQ Certification Scheme, there are two classes of IAQ, namely "Excellent Class" and "Good Class". According to the IAQ objectives for "Good Class", the 8-hour average concentrations of indoor TVOC and formaldehyde should be less than 261 parts per billion by volume (ppbv) and 81 ppbv, respectively.


5869

Regarding the test results reported in the press as mentioned in the question, we cannot evaluate whether the test results can be compared with the IAQ objectives directly as we do not have information on the test method, measurement duration and detailed data. Normally, the use of household cleaners would not take a long time and the volatile organic compounds (VOC) released during their use would disperse rapidly. Accumulation of indoor air pollutants can be effectively prevented if adequate ventilation is maintained.

(1) In order to improve air quality and reduce VOC emissions (including formaldehyde) from products, the government introduced the Air Pollution Control (Volatile Organic Compounds) Regulation in 2007 which set limits on the VOC contents of 170 products in phases. The regulated products cover those with relatively high VOC content, including paints/coatings, printing inks, adhesives, sealants, and six categories of consumer products (that is, air fresheners, floor wax strippers, hairsprays, insect repellents, insecticides and multi-purpose lubricants). VOC emissions from these regulated products accounted for over 80% of the emissions from all the relevant products at that time. We had sought the stakeholders' views on the proposed scope and methods of control in the course of preparing the regulation. There was feedback that cleaning products and certain consumer products were important for maintaining public hygiene and household cleanliness. Hence, controlling these products might reduce the choice of these products. Having considered the relevant views and the relatively small amount of VOC emissions from these products, we did not include household cleaning products and certain consumer products in the VOC control regime.

(2) and (3) The Commerce and Economic Development Bureau has advised

that, under the Consumer Goods Safety Ordinance (the Ordinance), in general, consumer goods which are ordinarily supplied for private use in Hong Kong (including household cleaning products) must comply with the general safety requirement specified in the Ordinance, which requires the goods to be reasonably safe. To determine whether consumer goods comply with the general safety


requirement, all the circumstances must be considered, including whether the consumer goods meet reasonable safety standards applicable to those consumer goods published by a standards institute. Generally speaking, whether the product label includes the place of origin or the ingredients of the product may not necessarily affect the safety of the product. At present, there are international standards applicable to cleaning products, but these safety standards may vary for different types of cleaning products. Under the Ordinance, failing to comply with the general safety requirement is an offence. The maximum penalty is a fine of $100,000 and imprisonment for one year on first conviction, and $500,000 and imprisonment for two years on subsequent convictions. The Customs and Excise Department (C&ED) is the key department responsible for enforcing the Ordinance. In addition to investigating into complaints concerning product safety, the C&ED would monitor the safety of various consumer products supplied in the market. According to the risk profile of consumer products, the C&ED will accord priority to sampling of products with higher risks for safety tests.

(4) Maintaining good ventilation is an effective means to prevent the

accumulation of indoor air pollutants released from cleaning products and other sources and minimize their impact on IAQ. To enhance public awareness of IAQ and the related pollution sources, the EPD has been providing relevant information on IAQ and conducting publicity and educational activities for the public, including the implementation of the IAQ Certification Scheme, setting up an IAQ Information Centre and website, conducting exhibitions and seminars, broadcasting promotional videos on television, mass transit trains and buses, displaying posters in train and bus compartments, arranging talks for primary and secondary school students on the importance of IAQ on health and ways to achieve good IAQ, and so on. The EPD will continue to conduct publicity and educational activities to promote the good practices to improve IAQ, such as maintaining good ventilation, avoiding the use of cleaning products or other VOC containing products in confined spaces without ventilation system.


5871

Measures to Improve Operating Environment of Public Markets 11. MR WU CHI-WAI (in Chinese): President, the Food and Health Bureau made public in May 2015 a report of a consultancy study on ways to improve the operating environment of public markets, which was submitted by a consultant commissioned by the Bureau. The consultant selected six markets for the purpose of drawing up physical improvement proposals for further study on potential improvements. Furthermore, the consultant proposed the implementation of a number of non-physical improvement measures (including strengthening of routine management and enforcement work, enabling octopus payment, provision of short-term leasing of promotional areas, etc.) in those six markets. At the meeting of the Subcommittee on Issues Relating to Public Markets (the Subcommittee) of this Council held in June last year, the authorities advised that they would conduct consultations on the proposals put forward by the consultant, and planned to select in 2016 at least one or two markets among the six markets and propose tailor-made improvement plans for it/them. In addition, the Subcommittee requested the Food and Environmental Hygiene Department (FEHD) to consult relevant tenants on whether to retrofit air-conditioning facilities in public markets (including cooked food centres) not yet provided with such facilities. In this connection, will the Government inform this Council:

(1) of the latest progress of the consultation conducted by the authorities in respect of the aforesaid market improvement proposals, and the views of the tenants; if such consultation has not completed, of the expected completion time; whether they have already selected one or two markets and formulated improvement plans for it/them; if they have, of the details; if not, the expected time for selecting the market(s) and formulating the relevant plans;

(2) given that the authorities have indicated that they would be willing

to explore the implementation of improvement plans if the stakeholders in markets other than the six selected markets indicate such a wish, whether the authorities have so far taken forward any non-physical improvement measures for other markets; if they have, of the progress, as well as the details, progress and expected implementation dates of such improvement measures, broken down by name of market;


(3) regarding the consultation conducted by FEHD on the retrofitting of air-conditioning facilities in markets, of the respective numbers of markets in respect of which the consultation has completed, is underway and has yet to be conducted; among the markets in respect of which the consultation has completed, of the number of markets in which the percentage of tenants in support of the retrofitting proposal has reached the threshold set by the authorities; and

(4) of the latest progress of the consultation launched by FEHD in the

middle of last year on the retrofitting of air-conditioning facilities in Ngau Tau Kok Market and Cooked Food Centre?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, the consultant commissioned earlier by the Food and Health Bureau has submitted a report and put forward recommendations on the functions and positioning of public markets, ways to improve their operating environment and the modes of management of public markets. In this connection, the Government briefed the Subcommittee on Issues Relating to Public Markets under the Legislative Council Panel on Food Safety and Environmental Hygiene in June 2015 on the follow-up actions that are to be taken in relation to the recommendations made by the consultant. My reply to the question is as follows:

(1) The consultant selected six representative markets for detailed study and put forward specific improvement plans. The markets are Tsuen Wan Market, Yau Ma Tei Market, Ngau Chi Wan Market, Sheung Fung Street Market, Lockhart Road Market and Wing Fong Street Market. We will follow up the specific improvement proposals for these markets in phases. The experience gained and the improvement plans taken forward will serve as reference for pursuing improvements to other markets in future. Specifically, the Food and Environmental Hygiene Department (FEHD) consulted the Market Management Consultative Committees (MMCCs) of Sheung Fung Street Market and Lockhart Road Market in the fourth quarter of 2015 on the proposed improvement works. The MMCCs expressed support for some of the proposals that do not require temporary closure of stalls or suspension of business. We are


5873

carefully considering their views and will conduct feasibility studies and seek funding according to the established procedures for taking forward the improvement works at those two markets.

(2) The consultant also suggested implementing some non-physical

improvement measures relating to the management of public markets, hygiene, as well as marketing and promotion. As pointed out by the consultant, the pursuit of these non-physical measures will incur additional costs and require additional resources for management. Priority has to be set for their implementation. On the management of public markets, we agree with the consultant that priority should be given to tackling inactive stalls and keeping markets clean and hygienic in general. We plan to increase the FEHD's manpower to enhance daily management work. On marketing and promotion, the FEHD has been organizing various promotional activities in public markets, including festive promotions, games booths, cooking demonstrations and distribution of souvenirs, and so on. The department will sustain its promotional efforts with a view to increasing customer flows in public markets and improving business viability.

(3) The Government lowered the threshold of tenants' support for the

installation of air-conditioning facilities in public markets from 85% to 80% on 1 July 2015. The Aberdeen Market is a beneficiary under the new threshold by virtue of its having obtained a support rate of 80.36%. Recently, the Ngau Tau Kok Market Cooked Food Centre has also obtained a support rate of 90%. In addition, the FEHD completed in December 2015 the consultation with the MMCCs of all 74 markets without air-conditioning facilities(1) and 27 of them supported conducting a questionnaire survey. We are following up the surveys to collect tenants' views on the installation of air-conditioning facilities.

(4) The FEHD has consulted the MMCC of Ngau Tau Kok Market on

the proposal to install air-conditioning facilities in the market. The MMCC considered that the questionnaire survey should only cover

(1) Including markets where air-conditioning facilities have been installed in their cooked food centres but not

in dry and wet goods stalls.


tenants of the Cooked Food Centre but not those of dry and wet goods stalls. The result of the survey shows that more than 80% of the tenants supported the installation of air-conditioning facilities. The FEHD has commenced the preliminary feasibility study on this proposal and will follow up the project in accordance with the established procedures.

Play Equipment in Children's Playgrounds 12. MR FREDERICK FUNG (in Chinese): President, earlier on, an organization released the findings of its study, which revealed that the play equipment in children's playgrounds for public use in Hong Kong (children's playgrounds) lagged behind in various aspects when compared with those in children's playgrounds overseas. According to the findings of the study, the play equipment at children's playgrounds in Hong Kong lacks space for promotion of children's social interaction, and fails to offer physical challenges to children (e.g. swings, merry-go-rounds and climbing structures are not available, as well as the slipways of the slides are not slippery enough and too short); as for sensory experience, the excessive emphasis on safety of the design of children's playgrounds in Hong Kong has rendered the play equipment monotonous and boring. In this connection, will the Government inform this Council:

(1) of the number of complaints about the play equipment in children's playgrounds received by the authorities in each of the past three years, with a breakdown by the content of the complaints (e.g. play equipment posing danger and showing signs of damage);

(2) given that there are views that, for the purpose of reducing costs, the

authorities have all along been using a "cookie-cutter" approach in constructing children's playgrounds with homogeneous design, of the considerations and procedure based on which the authorities design children's playgrounds and provide the relevant play equipment at present;

(3) whether the authorities will conduct in-depth exploration with

relevant stakeholders and experts in the light of the philosophies and factors behind the design of children's playgrounds (i.e. catering to


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children's needs for social interaction, physical challenges and sensory experience), so as to formulate a comprehensive plan for renovating the play equipment in children's playgrounds; and

(4) whether the authorities will draw up criteria for the provision of play

equipment in children's playgrounds, and adopt a site-specific design approach to provide suitable play equipment catering to children's play needs; if they will, of the details; if not, the reasons for that?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, the Leisure and Cultural Services Department (LCSD) manages over 700 outdoor children's playgrounds and is committed to providing various types of play equipment for children of different ages in these venues to help promote the balanced development of children through giving them opportunities to play together and acquire different skills. My reply to the four parts of the question is as follows:

(1) The numbers of complaints about the play equipment received by the LCSD in the past three years (that is, 2013 to 2015) are 53, 30 and 60 respectively. The details are as follows:

Year Nature of Complaint

Safety Damage to Facilities

Others (for example, inadequate facilities)

Total

2013 8 41 4 53 2014 3 24 3 30 2015 8 34 18* 60*

Note: * Fourteen of which are repeated complaints about the removal of a

damaged slide at the children's playground of Hong Kong Park

(2) When planning for, designing or replacing playground facilities, the LCSD and the relevant works department will provide different types of play equipment and movable parts, such as swings, slides, seesaws, climbing frames, large multi-play equipment and movable


parts that produce sounds when knocked after taking account of factors such as the topographic features, site areas and physical environments of individual venues, the safety standard required, the needs of different users and the views of the District Councils concerned. Meanwhile, additional play equipment with various new elements is also provided in order to keep pace with the times. For example, the children's playground in Kwun Tong Promenade offers facilities which help promote the sensory development of children, and Mui Wo River Silver Garden is an inclusive playground providing slides and climbing frames of different designs and levels of difficulty which make the play equipment more interesting and challenging.

(3) The LCSD has kept in contact with concern groups of children's play

equipment, and consulted the organizations and District Councils concerned on the designs of children's playgrounds and the play equipment provided there. Last year, with the support of the LCSD, the concern groups held the Inclusive Play Space Design Ideas Competition, using Tuen Mun Park as the competition site. The LCSD is now actively exploring the ways to incorporate the feasible and applicable elements in the ideas of the winners into the design of the selected site in Tuen Mun Park on a pilot basis in consultation with the organizations and works department concerned with a view to further improving the play equipment in children's playgrounds managed by the LCSD.

(4) The LCSD has laid down criteria for the provision of play equipment

in children's playgrounds. As mentioned in part (2) above, when planning for, designing or replacing playground facilities, both the LCSD and the relevant works department will take into account various factors such as the physical environments of individual venues and the views of users and the District Councils concerned. The LCSD will also continue to keep in contact with concern groups of children's play equipment with a view to providing suitable children's play equipment in its venues.


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Hong Kong Planning Standards and Guidelines Relating to Social Welfare Facilities, Open Space and Recreation Facilities 13. DR KWOK KA-KI (in Chinese): President, some members of the public have relayed to me that the Hong Kong Planning Standards and Guidelines (HKPSG) merely prescribe in broad terms that the planning of social welfare facilities such as district elderly community centres and day care centres for the elderly should be "determined taking into account the elderly population, demographic characteristics, geographical factor, existing service provision and service demand", and do not require the authorities to conduct planning in accordance with objective criteria (e.g. the estimated number of users of such facilities). Moreover, HKPSG simply take population as the planning standard for the provision of open space and recreation facilities in various districts, without taking into account the demographic characteristics which may vary from district to district. The aforesaid situations have resulted in mismatches between the supply and demand of such facilities in quite a number of districts, and people in need having to travel across districts for using such facilities or obtaining such services. In this connection, will the Government inform this Council:

(1) of the following statistics in respect of each District Council (DC) district at present: (i) a breakdown of the number of Comprehensive Social Security Assistance recipients by category of the cases, (ii) the elderly (i.e. persons aged 65 or above) population, (iii) the youth (i.e. persons aged between 10 and 20) population, and (iv) the ethnic minority (EM) population (set out in a table);

(2) regarding the social welfare services provided by the authorities

respectively for various categories of residents (including (i) the elderly, (ii) youths, (iii) EMs, and (iv) the chronically ill) in each DC district, of the expenditure incurred last year, the current number of service quotas, and the area of the facilities currently used for providing such services (set out in a table);

(3) of (i) the area and (ii) the number of open space and recreation

facilities in each DC district at present (set out in a table);


(4) whether the Planning Standards Sub-Committee (PSSC) has regularly reviewed HKPSG; if PSSC has, of the details; if not, how the authorities ensure that social welfare facilities, open space and recreation facilities planned for various districts in accordance with HKPSG are sufficient to meet the demand of local residents; and

(5) whether the authorities will formulate a set of objective criteria

based on demographic characteristics for assessing the demand for social welfare facilities in various districts; if they will, of the details; if not, how the authorities ensure that there are sufficient social welfare facilities and service quotas in each district, so that people in need do not have to travel across districts to use such facilities or obtain such services?

SECRETARY FOR DEVELOPMENT (in Chinese): President, the Hong Kong Planning Standards and Guidelines (HKPSG) is co-ordinated by the Planning Department (PlanD). The HKPSG aims to provide guidance on land use planning and development processes, so that land can be made available for different planned uses and facilities in new towns, new development areas and other land development projects. Land requirements for various planned uses and facilities are enacted, reviewed and updated by relevant bureaux and departments (B/Ds) according to their service planning and other relevant factors. Various parts of the question raised by Dr KWOK Ka-ki concern a number of community and welfare uses and facilities which are under the purview of different B/Ds. Having consulted the relevant B/Ds including the Labour and Welfare Bureau, the Home Affairs Bureau, the Constitutional and Mainland Affairs Bureau, the Census and Statistics Department, the Leisure and Cultural Services Department, the PlanD, the Social Welfare Department (SWD) and the Home Affairs Department, my reply is as follows:

(1) The number of recipients of the Comprehensive Social Security

Assistance (CSSA) Scheme broken down by District Councils districts and case nature, as well as the breakdown of the population of elderly, teenagers and ethnic minorities (non-Chinese) by District Council districts, are at Annex A and Annex B respectively.


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(2) In 2014-2015, the revised estimates for elderly services, youth welfare services and Community Rehabilitation Networks (CRNs) services for patients with chronic illness are $6.1 billion, $1.8 billion and $29 million respectively. The SWD does not have available information on the annual expenditure and floor areas of these facilities broken down by District Council districts.

No service quota is set for services of district elderly community

centres and neighbourhood elderly centres which are open to all members of the public aged 60 or above, youth welfare services serving children and youth aged from six to 24 in the community, as well as CRNs services. Service quotas (as at 31 December 2015) for day care centres/units for the elderly, Integrated Home Care Services, Enhanced Home and Community Care Services and subsidized residential care services for the elderly are set out at Annex C.

As regards ethnic minorities, all the consulted B/Ds have indicated

that currently the targets of the relevant social welfare services or facilities are not differentiated by ethnic groups. Hence, the Government does not have the information on the annual expenditure and floor areas of social welfare services in relation to ethnic minorities broken down by District Council districts.

(3) The area and number of leisure and recreation facilities by districts

are at Annex D. (4) HKPSG stipulates general guidelines for determining the scale,

location and site requirements of various land uses, community facilities and infrastructures according to the population and other factors. The relevant guidelines aim to serve as general reference to ensure that, during the planning process, the Government will reserve adequate land to facilitate social and economic development and provide appropriate public facilities to meet the needs of the community. The implementation of an individual public facility depends on the priority of the Government public works projects. In general, factors for the Government to determine the priority include population intake, provision and utilization of existing facilities, as well as policies and resources allocation of each individual B/D, and so on.


When planning recreation and leisure facilities, apart from making reference to the guidance provided in the HKPSG, the Government will also take into account the policy objectives for sports development, utilization rates of existing facilities, public preferences for different types of sports as indicated by studies and surveys, views of District Councils, "national sports associations" and schools sports organizations, as well as the extent of provision of such facilities by the Government and non-governmental organizations, with a view to meeting the demand of the community.

As regards welfare facilities, the Government consults service

operators and stakeholders in reviewing the service needs periodically and, in collaboration with relevant government departments, reserves/identifies suitable sites or premises (for example, public housing estates, government properties, school premises that have ceased operation, and so on) in different districts for the provision of welfare facilities, with a view to providing appropriate welfare facilities for the service users in different districts.

Relevant B/Ds will formulate and review planning standards under

their purview in a timely manner, in accordance with their policies on relevant services and the development needs. As an established practice, when relevant B/Ds decide that certain planning standards need to be updated or formulated according to their policies, relevant proposals will be submitted to the Planning Standards Sub-Committee, which is co-ordinated by the PlanD, for deliberation.

(5) As set out in Chapter 3 of the HKPSG, the planning standards for

some welfare facilities are population-based, where others involve the consideration of a number of factors, including the population of users of relevant facilities, demographic characteristics, geographical factors, existing service provision and service demand, and the availability of suitable sites or premises, and so on. The Government exercises flexibility in planning welfare facilities in order to meet the demand of people in need in different districts.


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Annex A

Recipients of the CSSA Scheme by District Council Districts (as at 31 December 2015)

(Provided by the Labour and Welfare Bureau)

District

Recipients of the CSSA Scheme

Case Nature

Total Old age

Permanent

disability

Ill

health

Single

parent

Low-

earnings Unemployment Others

Central and

Western 2 076 255 338 480 216 233 46 3 644

Wan Chai 989 61 128 201 37 208 94 1 718

Eastern 9 179 1 585 1 393 2 807 908 958 244 17 074

Southern 5 388 1 406 989 1 285 569 404 179 10 220

Yau Tsim Mong 5 291 457 1 196 2 710 564 1 598 237 12 053

Sham Shui Po 16 162 1 669 3 454 6 436 1 690 2 839 456 32 706

Kowloon City 9 413 1 277 1 659 4 065 965 1 505 244 19 128

Wong Tai Sin 14 884 1 592 2 785 5 051 1 615 1 862 394 28 183

Kwun Tong 27 821 2 048 5 063 9 346 2 934 3 617 728 51 557

Kwai Tsing 18 389 2 970 3 303 5 978 2 894 2 560 554 36 648

Tsuen Wan 5 483 685 875 2 047 648 564 165 10 467

Tuen Mun 14 018 2 473 2 937 4 181 1 165 1 759 466 26 999

Yuen Long 15 657 2 201 4 580 8 496 2 361 4 130 787 38 212

North 9 001 1 427 1 912 4 097 813 1 336 457 19 043

Tai Po 6 105 766 1 542 2 168 365 685 328 11 959

Sha Tin 11 423 1 852 3 387 5 078 1 247 1 125 663 24 775

Sai Kung 5 331 1 000 1 589 1 953 839 862 318 11 892

Islands 2 145 321 792 1 556 807 1 038 203 6 862

Total 178 755 24 045 37 922 67 935 20 637 27 283 6 563 363 140 Note: Excluding recipients of the Portable CSSA Scheme.


Annex B

Population of the Elderly, Teenagers and Ethnic Minorities (non-Chinese) by District Council Districts

(According to 2011 Population Census) (Provided by the Census and Statistics Department)

District Population

Elderly(1) Teenagers(2) Ethnic Minorities(3) Central and Western 35 026 24 074 24 997 Wan Chai 23 834 12 763 15 442 Eastern 91 882 62 903 13 860 Southern 38 869 31 634 14 991 Yau Tsim Mong 44 690 30 700 25 039 Sham Shui Po 64 849 43 794 6 567 Kowloon City 60 415 42 309 12 517 Wong Tai Sin 74 036 50 874 3 942 Kwun Tong 101 463 75 411 7 177 Kwai Tsing 74 927 61 491 7 005 Tsuen Wan 39 392 35 368 4 361 Tuen Mun 47 220 60 378 7 202 Yuen Long 54 783 87 001 12 962 North 32 576 40 920 2 261 Tai Po 31 860 35 415 3 750 Sha Tin 72 285 73 557 6 776 Sai Kung 39 342 55 185 10 787 Islands 13 756 19 240 16 777 Land Total 941 205 843 017 196 413 Notes: Persons living on board vessels are not included. (1) Refer to persons aged 65 and above including ethnic minorities (2) Refer to persons aged 10-20 including ethnic minorities (3) Refer to persons of non-Chinese ethnicity excluding foreign domestic helpers


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Annex C Number of Service Places of Day Care Centres/Units for the Elderly (DEs/DCUs), Integrated Home Care Services (IHCS), Enhanced Home and Community Care

Services and Subsidized Residential Care Services for the Elderly by District Council Districts (as at 31 December 2015)

(Provided by the Labour and Welfare Bureau)

District

Number of places by service type

DE/DCU places

IHCS places (Ordinary Cases and

Frail Cases)

EHCCS places Subsidized residential care places

By district By cluster

Central and Western 129 635 171

347

966 Wan Chai 72 548 154 516 Eastern 246 1 571 206 895 Southern 108 1 092 158 1 917 Islands 40 268 89 452 Kwun Tong 407 2 089 918 2 148 Wong Tai Sin 290 1 577 577

598 1 701

Sai Kung 205 428 228 1 276 Kowloon City 158 1 321 290

236 156

2 183 Yau Tsim Mong 152 956 188 1 110 Sham Shui Po 280 1 765 398 1 366 Sha Tin 313 1 539 192

394 1 327

Tai Po 64 715 129 1 298 North 44 1 157 141 1 516 Yuen Long 115 1 382 178

256 150

1 675 Tuen Mun 110 1 300 160 1 656 Tsuen Wan 84 418 235

360 1 797

Kwai Tsing 194 1 187 336 2 964 Total 3 011 19 948 7 245 26 763


Annex D

Leisure and Recreation Facilities by District Council Districts (As at 30 September 2015)

(Provided by the Home Affairs Bureau)

District Leisure and Recreation Facilities

Area (Hectare)# Number* Central and Western 71.4 126 Wan Chai 51 84 Eastern 146 122 Southern 151 94 Yau Tsim Mong 95.1 72 Sham Shui Po 77.2 107 Kowloon City 104.4 92 Wong Tai Sin 76.7 64 Kwun Tong 108.6 123 Islands 166.2 97 Tuen Mun 191.5 90 Yuen Long 180.2 123 Kwai Tsing 111.4 95 Tsuen Wan 140 81 North 132.7 148 Tai Po 112.5 82 Sha Tin 182.6 101 Sai Kung 175.9 73 Total 2 274.4 1 774 Notes: # Including areas of indoor and outdoor leisure facilities and roadside amenity areas

maintained by the Leisure and Cultural Services Department. * Including sports centres, stadia, sports grounds, major parks, small

parks/gardens/sitting-out areas, beaches, swimming pools, water sports centres and holiday camps.


5885

Donations to Local Universities Made by Commercial Sector 14. MR ALBERT HO (in Chinese): President, it has been reported in the press that on different occasions in recent months, the Chief Executive (CE) claimed that local universities were rather abundantly resourced and were even faced with the problem of surplus staff, and he therefore appealed to members of the commercial sector not to make further donations to local universities and to give donations to scientific research projects or primary and secondary schools instead. In response to the relevant press report, the Office of the Chief Executive (CEO) neither confirmed nor denied that CE had made such an appeal. In this connection, will the Executive Authorities inform this Council:

(1) whether CEO sought, right after the publication of the aforesaid press report, confirmation from CE if the contents of the report were true; if CEO did, of the details, and why CEO neither confirmed nor denied that CE had made the aforesaid appeal; if not, the reasons for that;

(2) of the following information concerning each of the institutions

funded by the University Grants Committee (UGC-funded institutions) in each of the years from 2013-2014 to 2015-2016:

(i) the rates of changes in the recurrent grants and the amounts

involved, (ii) the amounts of funding provision for home financing and

other benefits and the rates of changes involved, (iii) the amounts of expenditure on salaries and benefits and their

percentages in the overall funding provision, (iv) the rates of changes in other various funding provisions and

the amounts involved, and


(v) the ratio between the total amount of donations made by the commercial sector or individuals and the total amount of funding provided by the Government in the same year; and

(3) whether they have assessed if the commercial sector would respond

to CE's appeal and reduce its donations to local universities; if they have assessed and the outcome is in the affirmative, whether the Government will adjust upwards the ratio between the matching grant disbursed to UGC-funded institutions by the Government and the donations secured by such institutions when the next round of "Matching Grant Scheme" is launched; if it will, of the details; if not, the reasons for that?

SECRETARY FOR EDUCATION (in Chinese): President, the Government has been supporting the quality and sustainable development of institutions funded by the University Grants Committee (UGC) through provision of funding for these institutions to carry out teaching and research activities. The Government allocates recurrent grants to the eight UGC-funded institutions in the form of a block grant, usually on a triennial basis, to tie in with the academic planning cycle of the UGC-funded sector. The level of funding is determined according to the established mechanism, taking into account, amongst others, the student number targets for the funding period concerned as well as necessary price and pay adjustments. For example, regarding the 2016-2017 to 2018-2019 triennium, the Chief Executive in Council has fully accepted the UGC's recommendation to set the Cash Limit at $53.6 billion, or $17.9 billion each year, which represents an increase of 4.7% over the $17.1 billion for the 2015-2016 academic year. On the other hand, the Government also supports the institutions' efforts to diversify their funding sources and foster a philanthropic culture in the community through the development of a systemic fund-raising mechanism. The UGC-funded institutions are independent statutory bodies which have a high degree of autonomy in the management of internal affairs, personnel and remuneration systems, deployment of internal resources, and so on. They can


5887

also determine on their own the best use of grants and of funding provision from other sources. However, in view of the significant funding the institutions receive in the form of Government subvention and private contributions, as well as the importance of higher education to the development of society, it is incumbent upon the Government and the community at large to have a legitimate interest in the operation of the institutions. Therefore, while the Government and the UGC attach great importance to safeguarding academic freedom and institutional autonomy, institutions are expected to remain committed to transparency and accountability in their operation, to ensure that funding is put to appropriate uses that serve the best interests of the community and students. Our reply to Mr HO's question is as follows:

(1) and (3) The Chief Executive has been encouraging members of the

community to support education by way of donation to target recipients which include universities and secondary schools. As a matter of fact, the Chief Executive attended the donation ceremonies of the University of Hong Kong, The Chinese University of Hong Kong, The Hong Kong Polytechnic University and City University of Hong Kong respectively last year, during which he appealed to different sectors of the community for continued donations to universities. Furthermore, the Chief Executive will continue to attend the fund-raising activities of different universities in order to show his support to their development.

The Matching Grant Scheme (MGS) is a non-recurrent exercise.

The sixth MGS was completed in late July 2014. The Government currently has no plan to launch a new round of MGS in the pipeline. If the Government decides to launch another round of MGS in future, it will then consider a suitable matching ratio.

(2) The information requested is at Annex.


Annex Relevant data of institutions funded by the UGC from 2013-2014 to 2015-2016 is tabulated below: (i) Grants allocated to UGC-funded institutions and the year-on-year changes

of the amount

Institution

Financial year (as at 31 March) 2013-2014

Actual Amount $'000

2014-2015 Actual Amount $'000

Year-on-year Change $'000

Percentage Change

2015-2016 Revised estimate

$'000


Percentage Change

CityU 1,691,335 1,878,777 187,442 11.08% 2,151,862 273,085 14.54% HKBU 868,116 952,883 84,767 9.76% 1,069,193 116,310 12.21% LU 355,750 373,017 17,267 4.85% 403,936 30,919 8.29% CUHK 3,482,907 3,675,189 192,282 5.52% 3,951,774 276,585 7.53% HKIEd 637,367 683,535 46,168 7.24% 724,246 40,711 5.96% PolyU 2,335,667 2,468,260 132,593 5.68% 2,685,526 217,266 8.80% HKUST 1,825,993 1,947,445 121,453 6.65% 2,060,857 113,412 5.82% HKU 3,447,159 3,618,391 171,231 4.97% 4,036,805 418,414 11.56% Total 14,644,293 15,597,496 953,204 6.51% 17,084,200 1,486,704 9.53%

Notes: (1) Figures may not add up due to rounding. (2) The amount of grants is based on the actual expenditure for subventions under the Estimates of UGC for

the 2013-2014 and 2014-2015 financial years and the revised estimated expenditure for subventions for the 2015-2016 financial year.

(3) The year-on-year increase in the grants is mainly due to the corresponding adjustments made to cater for

the increase in senior year intake places for undergraduate programmes and the changes in price and pay levels.

(ii) Other subventions (including subventions for the Home Financing Scheme

and refund of Rates and Government Rent) to UGC-funded institutions and the year-on-year changes of the amount

Institution


Actual Amount $'000



Percentage Change


$'000


Percentage Change

CityU 65,352 60,159 (5,193) -7.95% 56,394 (3,765) -6.26% HKBU 28,720 39,050 10,330 35.97% 32,750 (6,300) -16.13%


5889

Institution


Actual Amount $'000



Percentage Change


$'000


Percentage Change

LU 7,516 6,226 (1,290) -17.17% 7,445 1,219 19.59% CUHK 67,660 76,757 9,097 13.44% 74,781 (1,976) -2.57% HKIEd 17,723 17,334 (389) -2.20% 17,254 (80) -0.46% PolyU 43,892 68,161 24,269 55.29% 59,653 (8,508) -12.48% HKUST 39,024 41,439 2,414 6.19% 49,116 7,677 18.53% HKU 74,935 76,345 1,410 1.88% 75,107 (1,238) -1.62% Total 344,822 385,470 40,648 11.79% 372,500 (12,970) -3.36%

Notes: (1) Figures may not add up due to rounding. (2) Other subventions only account for about 2% of the total amount of subventions. The significant

year-on-year fluctuations for other subventions are mainly due to variance in the amount of Rates and Government Rent refunded each year.

(iii) Expenditure on remuneration and UGC funding of UGC-funded

institutions The amount of expenditure of institutions (including expenditure on remuneration) is not solely covered by UGC funding. Apart from UGC funding, other sources of income of the institutions include other funding provision from the Government (please refer to table (iv)), tuition fees and other charges, interest and investment return, donations and endowments, auxiliary service and other income. Therefore, expenditure on remuneration cannot be directly compared with UGC funding and we have not provided the ratio of the former to the latter.

Institution

2013-2014 (as at 30 June 2014) 2014-2015 (as at 30 June 2015) Expenditure on remuneration

$'000

UGC funding $'000

Expenditure on remuneration

$'000

UGC funding $'000

CityU 2,471,953 1,969,352 2,571,635 2,206,889 HKBU 1,546,255 1,055,734 1,676,809 1,146,229 LU 514,942 408,006 513,162 441,568 CUHK 4,102,534 3,985,504 4,394,444 4,198,292 HKIEd 854,409 753,659 929,381 830,593 PolyU 2,842,025 2,753,763 3,086,773 2,784,641 HKUST 2,018,000 2,204,000 2,223,000 2,343,000


Institution

2013-2014 (as at 30 June 2014) 2014-2015 (as at 30 June 2015) Expenditure on remuneration

$'000

UGC funding $'000

Expenditure on remuneration

$'000

UGC funding $'000

HKU 4,366,680 3,926,325 4,699,286 4,223,295 Total 18,716,798 17,056,343 20,094,490 18,174,507 Notes: (1) Information on expenditure on remuneration and UGC funding provision is based on the

audited financial reports of the institutions concerned for 2013-2014 and 2014-2015. Figures for 2015-2016 is not available yet.

(2) UGC funding provision comprises mainly block grants and matching grants. (iv) Other funding provision available to UGC-funded institutions and the

year-on-year changes of the amount

Institution

2013-2014 (as at 30 June 2014)

Other Funding Provision

$'000

2014-2015 (as at 30 June 2015)

Other Funding Provision

$'000


Percentage Change

CityU 76,957 86,646 9,689 12.59% HKBU 34,793 39,669 4,876 14.01% LU 12,423 12,046 (377) -3.03% CUHK 214,933 257,408 42,475 19.76% HKIEd 56,564 60,341 3,777 6.68% PolyU 123,932 168,486 44,554 35.95% HKUST 52,000 78,000 26,000 50.00% HKU 158,487 182,390 23,903 15.08% Total 730,089 884,986 154,897 21.22% Notes: (1) Other funding provision available to UGC-funded institutions includes mainly

subventions from Government bureaux and departments, such as the Food and Health Bureau, Innovation and Technology Commission and Environmental Protection Department.

(2) Information on other funding provision is based on the audited financial reports of the

institutions concerned for 2013-2014 and 2014-2015. Figures for 2015-2016 is not available yet.


5891

(v) Donations from the commercial sector or individuals and Government funding to UGC-funded institutions

Generally speaking, there is no direct relationship between donations from the commercial sector or individuals and the funding provided by the Government. Therefore, we have not provided the ratio of the former to the latter.

Institution

2013-2014 (as at 30 June 2014) 2014-2015 (as at 30 June 2015)

Donations from commercial

sector or individuals

$'000

Government funding

(Funding from UGC and other

government departments)

$'000

Donations from commercial

sector or individuals

$'000

Government funding

(Funding from UGC and other

government departments)

$'000 CityU 105,962 2,046,309 165,940 2,293,535 HKBU 109,370 1,090,527 106,885 1,185,898 LU 19,430 420,429 25,998 453,614 CUHK 463,719 4,200,437 479,726 4,455,700 HKIEd 39,789 810,223 26,623 890,934 PolyU 208,268 2,877,695 266,534 2,953,127 HKUST 84,000 2,256,000 86,000 2,421,000 HKU 1,508,588 4,084,812 679,600 4,405,685 Total 2,539,126 17,786,432 1,837,306 19,059,493 Note: Information on donations from the commercial sector or individuals and Government funding is based on the audited financial reports of the institutions concerned for 2013-2014 and 2014-2015. Figures for 2015-2016 is not available yet. Legend: City U: City University of Hong Kong HKBU: Hong Kong Baptist University LU: Lingnan University CUHK: Chinese University of Hong Kong HKIED: Hong Kong Institute of Education PolyU: Hong Kong Polytechnic University HKUST: Hong Kong University of Science and Technology HKU: Unversity of Hong Kong


Provision of Cooling-off Periods for Consumer Contracts Involving Pre-payment for Services 15. MR TANG KA-PIU (in Chinese): President, since last year, I have received a total of nine complaints from members of the public alleging that they were misled, deceived or even coerced by staff members of fitness centres into signing contracts for the purchase of services, which involved amounts ranging from $7,000 to $300,000. In addition, the Consumer Council received 220-odd complaints about the sales practices of fitness centres in the first seven months of last year, showing that the problem is serious. There are views that the aforesaid situation reflects that the Trade Descriptions Ordinance (Cap. 362) cannot adequately protect the rights and interests of consumers and the Government should therefore implement a mandatory cooling-off period arrangement for consumer contracts involving pre-payment for services, under which consumers may unconditionally cancel the contracts during the cooling-off period and receive a full refund of the paid fees, with a view to enhancing the protection of consumers' rights and interests. In this connection, will the Government inform this Council:

(1) whether it has honoured the pledge, made to this Council by the Secretary for Commerce and Economic Development in July 2012, i.e. to "explore and study … the arrangement of a cooling-off period, with various stakeholders in greater detail and focus"; if it has, of the details and specific progress of such exploration and study; if not, the reasons for that, and whether it will honour such a pledge expeditiously, including conducting public consultations on the issues concerned;

(2) of the industries in Hong Kong the operators of which currently

implement self-regulatory cooling-off period arrangements, and the details and effectiveness of such arrangements;

(3) whether it knows which countries/regions have made provisions on

cooling-off periods in respect of certain categories of consumer contracts; if it knows, of the details; and

(4) whether it will, by making reference to the experience of the relevant

countries/regions, consider amending Cap. 362 expeditiously to


5893

require that consumer contracts involving pre-payment for services should contain cooling-off period provisions; if it will, of the details; if not, the reasons for that?

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, my reply to the four parts of the question is as follows:

(1) The Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 (the Amendment Ordinance) was enacted by the Legislative Council in July 2012. The Trade Descriptions Ordinance (Cap. 362), as amended by the Amendment Ordinance, prohibits some commonly seen unfair trade practices, including false trade descriptions of services, misleading omissions, aggressive commercial practices, bait-and-switch, bait advertising and wrongly accepting payment. Convicted traders may be liable to a maximum penalty of imprisonment for five years and a fine of $500,000.

Generally speaking, the calls for imposition of mandatory

cooling-off periods primarily target unfair trade practices deployed by certain traders in the context of accepting pre-payments. Since the Amendment Ordinance has come into operation in July 2013, the Customs and Excise Department has been sparing no effort in law enforcement. It has taken prosecution action against unscrupulous traders engaging in aggressive commercial practices and wrongly accepting payment in the course of accepting pre-payment, thereby combatting unfair trade practices at source.

The issue of imposing a mandatory cooling-off period was widely

discussed in the community during our public consultation on the legislative proposals to combat unfair trade practices in 2010 to 2011, and we had communicated with different stakeholders on the topic. On the one hand, consumers generally have aspirations for a cooling-off period. On the other hand, certain fundamental issues that should be considered in relation to implementing a cooling-off period are not simple and are controversial, such as whether a mandatory cooling-off period should generally apply to all goods and services, how small-value transactions should be handled, whether consumers can enjoy the goods and services concerned


during the cooling-off period, and whether consumers having enjoyed part of the goods and services concerned during the cooling-off period should be required to pay for the enjoyed part if they request to cancel the transaction, and how the payment should be computed, and so on. Some practical issues also cannot be disregarded, including how consumers should exercise the contract cancellation right and how refund should be made, and so on. Some trades consider that a mandatory cooling-off period would only increase the costs for honest traders but would have little effect on unscrupulous traders. Following discussion with stakeholders and careful consideration, the Government considers that imposing a mandatory cooling-off period will change the course of transactions and have significant implications on both traders and consumers. It is necessary to consider the matter carefully.

The Government will continue to keep a close watch on the

community's views on imposing a mandatory cooling-off period, and monitor the effectiveness of the new offences under the Amendment Ordinance in tackling unfair trade practices. With the enforcement agencies' continued efforts in combating unfair trade practices, the establishment of successful enforcement cases, as well as measures in publicity and public education, we believe that a deterrent effect will be achieved against unscrupulous traders and consumer awareness of self-protection will be heightened.

(2) We note that certain trades in Hong Kong provide for cooling-off

periods. Relevant information is set out in the Annex. The Consumer Council published a Report on Unfair Terms in Standard Form Consumer Contract in 2012, which includes a sample consumer contract that provides for a cooling-off period and can serve as a reference to traders.

(3) and (4)

We understand that some jurisdictions impose cooling-off periods on

certain selected types of transactions. For example, according to the People's Republic of China Law on Protection of the Rights and Interests of Consumers, which has come into effect on the Mainland since March 2014, under prescribed circumstances, consumers who


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purchase goods using the Internet, television, telephone or by mail order have the right to return the goods within seven days of receipt without giving any reason. Separately, according to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which has come into effect in the United Kingdom since June 2014, under prescribed circumstances, consumers who enter into off-premises and distance contracts with traders may cancel the contracts within 14 days without giving any reason.

We will continue to study issues that pertain to consumer interest as

appropriate.

Annex

Some of the trades in Hong Kong that provide for cooling-off periods

- Since 1996, the Hong Kong Federation of Insurers has initiated the cooling-off period, a self-regulatory measure which is applicable to new life insurance products. Currently, the cooling-off period is 21 days and a policyholder can exercise the right to cancel the policy within the period.

- In 2006, the Consumer Council and the beauty trade promulgated a Beauty

Industry Code of Practice. Six trade associations, including the Cosmetic and Perfumery Association of Hong Kong, have drawn reference from the Code and launched a scheme that provides for a voluntary cooling-off period of no less than 24 working hours.

- In 2010, the Communications Association of Hong Kong promulgated the

Industry Code of Practice for Telecommunications Service Contracts, which is a self-regulatory initiative of the telecommunications industry aimed at drawing up contracts that are balanced, fair and reasonable for both the consumers and the industry. The code stipulates that a cooling-off period of no less than seven days shall apply in telecommunications service contracts concluded during an unsolicited visit to a customer's home. From July 2011, the major fixed and mobile network operators have implemented the code.


- Since 2011, the Hong Kong Monetary Authority has required retail banks to provide a pre-investment cooling-off period of at least two days when selling unlisted derivative products to certain retail customers, so that they have sufficient time to understand the product and consider the appropriateness of the investment before subscription. Also, since the inception of the Code on Unlisted Structured Investment Products in 2010, issuers of any unlisted structured investment products authorized by the Securities and Futures Commission with a scheduled tenor of more than one year shall confer on investors a cooling-off or unwind right of at least five business days after the investor places an order for the relevant product.

Enhancing Quality of Coastal Waters of Victoria Harbour 16. MR CHAN HAK-KAN (in Chinese): President, the Government has advised that it has all along been taking actions and allocating resources to improve and enhance the quality of the coastal waters of Victoria Harbour. However, the coastal waters of Victoria Harbour still give off stenches from time to time, which has caused great nuisance to members of the public. On 26 June last year, the Finance Committee of this Council approved a funding application for commissioning a consultancy study on how to reduce near shore pollution and enhance the quality of the coastal waters of Victoria Harbour, but the two-year consultancy study will only commence early this year. In this connection, will the Government inform this Council:

(1) given that between 2013 and September 2015, the Environmental

Protection Department uncovered a total of 157 cases in which the foul water pipes of private buildings were misconnected to the stormwater drainage system within the Victoria Harbour Water Control Zone, but the authorities instituted only 16 relevant prosecutions between 2012 and 2014, of the reasons why the authorities did not prosecute the relevant parties of the remaining cases; whether they will consider stepping up their law enforcement efforts; if they will, of the details;

(2) given that problems such as inappropriate handling of minor works

or drainage works by minority property owners and contractors, the lack of expertise of the workers making pipe connections, and the


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complicated pipe alignments of old buildings may result in foul water pipe misconnections, whether the authorities will step up the regulation of implementation procedures for those works, so as to prevent the misconnection of foul water pipes; if they will, of the details; if not, the reasons for that;

(3) given that roadside activities and phenomena (e.g. discharge of

sewage generated by eateries' dishwashing activities at rear lanes into stormwater drains, and the flow of street litter into stormwater drains) are some of the sources of coastal shore water pollution, whether the authorities have formulated measures to reduce the pollution caused by such activities to the quality of coastal shore waters; if they have, of the details; if not, the reasons for that;

(4) of the respective rates of compliance with the Water Quality

Objectives (i.e. Dissolved Oxygen, Total Inorganic Nitrogen, Unionized Ammonia Nitrogen and E. coli bacteria) of the various Water Control Zones in Hong Kong in the past three years; and

(5) whether the authorities have set performance indicators for the plans

on improving the harbour water quality, so as to assess the effectiveness of the works of Stage 1 and Stage 2 of the Harbour Area Treatment Scheme, which costed more than $8.4 billion and $17.3 billion respectively; if they have, of the details; if not, the reasons for that?

SECRETARY FOR THE ENVIRONMENT (in Chinese): President, the Government is committed to improving the water quality of Victoria Harbour. Over the past two decades, we have progressively implemented the Harbour Area Treatment Scheme (HATS) to collect and treat sewage generated around Victoria Harbour. With full commissioning of HATS Stage 2A in December 2015, all sewage around the harbour has been intercepted and diverted to the Stonecutters Island Sewage Treatment Works for centralized treatment. Compared with the monitoring data in the first quarter of 2015, the levels of E. coli and organic pollutants in terms of biochemical oxygen demand have significantly reduced by 74% and 20% respectively. The reductions for the above parameters were 88% and 50% respectively as compared with the year 2000-2001 before HATS Stage 1 was implemented.


However, there are still residual pollution discharges to some coastal waters of Victoria Harbour, even causing odour problems. The Environmental Protection Department (EPD), in collaboration with other relevant departments, have been taking various actions including law-enforcement, publicity and education and engineering measures, to reduce the residual pollution discharges entering Victoria Harbour. However, many of the residual pollution discharges originate from various activities in old districts and the causes would differ among different areas. While efforts among the departments can mitigate the problem caused by residual pollution discharges, it is not adequate to keep the problem totally under control. Hence, the Government has commissioned a consultancy study (hereinafter referred as "the Study") in January 2016 to identify the specific causes of near shore pollution through evidence-based reviews and various analyses, based on which targeted solutions and measures through pollution control and prevention at source would be identified. In parallel to the Study, we would take immediate measures to deal with any pollution problem identified, instead of waiting for completion of the Study. On the other hand, we are actively preparing for the construction of dry weather flow interceptors (DWFI) and rehabilitation of trunk sewers in Kowloon and Tsuen Wan, including a DWFI at the Cherry Street Box Culvert to intercept polluted flow from entering the New Yau Ma Tei Typhoon Shelter; four new DWFIs in Tsuen Wan and four new DWFIs in West Kowloon at critical locations; the upgrading of 43 existing DWFIs in West Kowloon; and the rehabilitation of two trunk sewers in To Kwa Wan and Kwun Tong. These engineering measures could help reduce residual pollution discharges entering Victoria Harbour and improve the quality of the coastal waters of Victoria Harbour. Regarding the questions raised by Mr CHAN Hak-kan:

(1) There are many causes for sewer misconnections in buildings. For example, renovation or alteration works of buildings and repair of broken sewer pipes may result in the misconnection of sewer pipes to the storm drain systems. Misconnections may also involve sewer pipes of individual units as well as sewerage installation on external walls and common areas of buildings; these contraventions are usually not intended by the owners or occupants. Hence, we would focus on facilitating owners or occupants in resolving the sewage disposal problems of their buildings. If there is sufficient evidence


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of illegal discharge, we will also initiate prosecution actions. During 2013 to 2015, the EPD had identified 177 misconnection cases in the Victoria Harbour Water Control Zone (VHWCZ). Through the EPD's efforts in liaising and following up with the owners' corporations, individual owners or occupants, and property management offices, 137 cases have been rectified. As for the remaining cases, the EPD are following up with the Buildings Department (BD) and other relevant government departments to urge the concerned property owners and responsible parties to actively and quickly rectify the problems.

Furthermore, the EPD will inspect potential sources of illegal discharge in the VHWCZ, including construction sites, various industrial and commercial premises, restaurants and food premises, and so on. In the past three years (2013 to 2015), the EPD conducted over 7 000 inspections and successfully prosecuted 22 cases for violation of the Water Pollution Control Ordinance. The EPD will continue its enforcement efforts to improve the quality of the coastal waters of Victoria Harbour.

(2) Under the current Minor Works Control System (MWCS) of the BD,

designated minor works involving the erection, repair, alteration or removal of any drain shall be carried out by a qualified and experienced Prescribed Building Professional and Prescribed Registered Contractor in accordance with the Buildings Ordinance and Building (Minor Works) Regulation. The BD has issued the "Technical Guidelines on MWCS", which provides detailed references for different types of minor works items including drainage works to assist the professionals and contractors in carrying out the works. The BD will carry out audit checks on a random basis to ensure the minor works comply with the requirements of the legislation and achieve the required quality and standard. Non-compliance cases are subject to disciplinary action and prosecution.

(3) At present, should illegal discharge of wastewater into the storm

drains be found, the EPD will conduct follow-up investigation and take enforcement actions against any violation of the Water Pollution Control Ordinance, and initiate inter-departmental enforcement


actions if necessary. The Food and Environmental Hygiene Department (FEHD) would also arrange inspections at restaurants and take enforcement actions to stop the malpractice of scullery activities at rear lanes. Over the past three years (2013 to 2015), apart from the prosecutions taken by the EPD (see part (1) above), the FEHD has also taken enforcement actions and successfully prosecuted 97 cases against illegal discharge of wastewater from restaurants.

(4) The compliance rates with the four Water Quality Objectives

(WQOs) parameters for marine waters (that is, Dissolved Oxygen (DO), Total Inorganic Nitrogen (TIN), Unionized Ammonia Nitrogen (UIA) and E. coli) in the 10 Water Control Zones during the past three years (2012 to 2014) are listed in the Annex. In 2014, the overall DO level was lower than that in 2012 and 2013. According to the Hong Kong Observatory (HKO), the weather was extraordinarily hot from June to September in 2014, with June, July and September the hottest months in the HKO's record since 1884. As high temperatures can significantly reduce the solubility of oxygen in water, the EPD's assessment indicates that the lower DO level in 2014 was likely related to the hot weather that year, and was not due to increased pollution. The EPD will continue to closely monitor the changes in DO levels in the marine waters.

(5) The Government established the WQO for Victoria Harbour in 1994

based on its primary beneficial use of navigation and anchorage. The key parameters include DO, UIA and TIN. The commissioning of HATS Stage 1 in 2001 has brought significant improvement in water quality of Victoria Harbour, leading to an increase of 10% in DO, and a decrease of 31% and 16% in UIA and TIN respectively. The progressive commissioning of HATS Stage 2A since September 2015 leads to further improvement in the water quality of Victoria Harbour. We expect that there will be a further increase of 3% in DO, and a further decrease of 12% and 7% in UIA and TIN respectively. Although E. coli is not a WQO parameter for Victoria Harbour, the levels of E. coli and organic pollutants in terms of biochemical oxygen demand, as mentioned in the beginning, have significantly reduced by 74% and 20% respectively as compared with the monitoring data in the first quarter


5901

of 2015. When compared with the pre-HATS Stage 1 data in 2000-2001, the reductions for the above parameters are 88% and 50% respectively. HATS has also helped improve the water quality of beaches outside Victoria Harbour. Since 2010, the water quality of all beaches in the territory has met the bacteriological WQO for bathing beaches. The Government will continue to closely monitor the relevant parameters to confirm the effectiveness of the various improvement measures.

Annex

2012 to 2014 WQOs Compliance Rates WQOs Compliance Rates for the main marine water body of VHWCZ (%)

DO TIN UIA E. coli* 2012 100.0 30.0 100.0 Not applicable 2013 90.0 60.0 100.0 Not applicable 2014 40.0 90.0 100.0 Not applicable

WQOs Compliance Rates for the main marine water body of Eastern Buffer Water Control Zone (%)


WQOs Compliance Rates for the main marine water body of Western Buffer Water Control Zone (%)


WQOs Compliance Rates for the main marine water body of Junk Bay Water Control Zone (%)



WQOs Compliance Rates for the main marine water body of Deep Bay Water Control Zone (%)


WQOs Compliance Rates for the main marine water body of Mirs Bay Water Control Zone (%)

DO TIN UIA E. coli* 2012 100.0 100.0 100.0 100.0 2013 100.0 100.0 100.0 100.0 2014 92.9 100.0 100.0 100.0

WQOs Compliance Rates for the main marine water body of North Western Water Control Zone (%)


WQOs Compliance Rates for the main marine water body of Tolo Harbour and Channel Water Control Zone (%)

DO TIN UIA E. coli* 2012 42.9 Not applicable Not applicable 100.0 2013 42.9 Not applicable Not applicable 100.0 2014 14.3 Not applicable Not applicable 100.0

WQOs Compliance Rates for the main marine water body of Port Shelter Water Control Zone (%)

DO TIN UIA E. coli* 2012 100.0 0.0 100.0 100.0 2013 100.0 100.0 100.0 100.0 2014 33.3 100.0 100.0 100.0

WQOs Compliance Rates for the main marine water body of Southern Water Control Zone (%)

DO TIN UIA E. coli* 2012 100.0 0.0 100.0 100.0 2013 100.0 0.0 100.0 100.0 2014 93.8 12.5 100.0 100.0

Note: * The E. coli WQO only applies to Secondary Contact Recreation Subzones


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Negotiations with Macao Government for Agreements on Surrender of Fugitive Offenders and Mutual Legal Assistance in Criminal Matters 17. MS EMILY LAU: President, it has been reported that the Secretary for Justice visited Macao in July and December 2014 to negotiate with his counterpart in the Macao Government for the agreements on the surrender of fugitive offenders and mutual legal assistance in criminal matters, which have yet to be finalized. On 20 July 2015, the Secretary for Administration and Justice of the Macao Government told the Macao media that as the agreement on mutual legal assistance in criminal matters was being negotiated by the two Governments on the basis of "one country, two systems", the principles concerning mutual legal assistance in criminal matters to be observed in the agreement might not be fully compatible with those provided for in the relevant agreements entered into by the Macao Government with the governments of foreign countries. In this connection, will the Executive Authorities inform this Council:

(1) of the draft provisions of the aforesaid agreements under negotiation;

(2) whether they intend to enter with the Macao Government into an

agreement observing all of the principles concerning mutual legal assistance in criminal matters provided for in those agreements already entered into by the Executive Authorities with the governments of foreign countries ; and

(3) whether the agreement on the surrender of fugitive offenders to be

entered into will empower the extradition of the relevant persons from Hong Kong to Macao to stand trial for offences that do not have equivalents in the Hong Kong law, namely treason, subversion, sedition and theft of state secrets?

SECRETARY FOR SECURITY: President, our consolidated reply to the various parts of the question is as follows: The discussion between the Hong Kong Special Administrative Region (HKSAR) Government and the Macao Special Administrative Region Government on the arrangements for the surrender of fugitive offenders and


mutual legal assistance in criminal matters is underway. Given the differences in the legal systems between the two places, the two Governments are still working to formulate texts of the arrangements which will be acceptable to both sides and can be implemented. The HKSAR Government will ensure that the arrangements will on the one hand achieve juridical co-operation between the two places, and on the other hand, be consistent with the provisions of the Basic Law of Hong Kong (including those concerning human rights) and such other legal obligations as may be relevant. In Hong Kong, the arrangements, after being signed, will have to go through a legislative process before they can be implemented. Public Expenditure Relating to Handling of Torture and Non-refoulement Claims 18. DR ELIZABETH QUAT (in Chinese): President, according to a paper submitted to the Panel on Security of this Council by the Security Bureau on 2 February this year, the public expenditure on the handling of torture claims/non-refoulement claims and related work has been increasing continuously in the past few years from $287 million in 2010-2011 to an estimated $644 million for 2015-2016, representing a rate of increase of over 124%. However, such expenditure has not yet included the relevant costs in relation to the legal aid granted to claimants for lodging judicial reviews, the provision of public healthcare services for them, and the institution of prosecutions by the Department of Justice against claimants suspected of having committed crimes. In this connection, will the Government inform this Council:

(1) of the number of claimants who were granted leave by the court in each of the past 10 years to lodge judicial reviews in respect of their claims, and the amount of legal aid expenditure incurred in such cases (set out in a table);

(2) of the number of claimants' attendances for public healthcare

services in each of the past 10 years, and the amount of public expenditure incurred for providing such services (set out in a table);

(3) of (i) the number of claimants who were prosecuted for offences

allegedly committed by them in each of the past 10 years, and (ii) the amount of public expenditure incurred by the Department of Justice


5905

and the Judiciary in handling such cases (with a breakdown of the figures in (i) and (ii) by District Council district to which the place where the offence was committed belonged); and

(4) of the estimated expenditure in 2016-2017 for handling torture and

non-refoulement claims? SECRETARY FOR SECURITY (in Chinese): President, since the commencement of the Unified Screening Mechanism in 2014, there has been an influx of persons lodging non-refoulement claims in Hong Kong. Their abuse of our screening system and the worsening crime situation have caused considerable public concerns over the social and public order issues brought about by the prolonged presence of a large and growing number of claimants in Hong Kong. Injecting further resources alone is unable to contain and reverse the situation; the Government needs to launch a comprehensive review of the strategy of handling non-refoulement claims in the following four dimensions: pre-arrival control, screening procedures, detention, and removal and enforcement, to effectively tackle the problem of illegal immigration and overstaying. My reply to the various parts of Dr QUAT's question is as follows.

(1) According to the Legal Aid Department's (LAD) record, from 2009-2010 to 2015-2016 (up to January 2016), the total legal costs for cases (with accounts finalized) where legal aid was granted to torture/non-refoulement claimants to apply for judicial reviews against the decisions made in relation to their claims are tabulated as follows:

Financial Year Total legal cost incurred (Including costs

paid to the Department of Justice (as book entry)) ($Million)

2009-2010 0.27 2010-2011 2.61 2011-2012 0.23 2012-2013 6.58 2013-2014 7.68 2014-2015 7.00 2015-2016

(up to January 2016) 11.28


According to the LAD, the files of some of the claim-related proceedings/cases concluded before 2009 have been disposed of in compliance with the established procedures. The LAD do not maintain the complete statistics or records concerned.

According to the Immigration Department (ImmD)'s record, since

2009, the total number of cases where leave is granted by the Court to lodge judicial reviews against the decisions made in relation to their claims are tabulated below:

Year Number of Cases 2009 0 2010 1 2011 1 2012 15 2013 9 2014 42 2015 24

(2) According to the Hospital Authority (HA)'s record, the number of

out-patient cases and in-patient attendances in public hospitals with fee waiver granted to claimants and the amount so waived between 2008 and 2015 are tabulated below:

2008 2009 2010 2011 2012 2013 2014 2015 Number of in-patient cases with fee waiver

182 265 606 815 610 367 954 1 421

Number of out-patient attendances with fee waiver

2 911 6 109 8 477 8 728 8 096 6 386 10 792 15 685

Total Number of Cases 3 093 6 374 9 083 9 543 8 706 6 753 11 746 17 106

2008 2009 2010 2011 2012 2013 2014 2015 Amount waived for in-patient services ($Million)

3.9 4.1 8.1 19.5 14.7 13.8 18.6 29.5


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2008 2009 2010 2011 2012 2013 2014 2015 Amount waived for out-patient services ($Million)

1.5 2.8 4.1 4.3 4.0 4.6 8.8 13.5

Total Amount ($Million)

5.4 6.9 12.2 23.8 18.7 18.4 27.4 43.0

The HA do not maintain the above statistics before 2008.

(3) The Judiciary do not maintain statistical breakdown on the public

expenditure incurred in handling criminal cases. According to the Police's record, since 2013, the number of non-ethnic Chinese illegal immigrants (NECII) (including Vietnamese) on recognizance (mostly non-refoulement claimants) arrested for criminal offences are tabulated below:

Offences 2013 2014 2015

Shop Theft 78 147 277 Serious Drugs Offences 79 79 159 Miscellaneous Theft 80 86 110 Wounding and Serious Assault 100 67 100 Serious Immigration Offences 30 34 85 Forgery and Coinage 31 40 80 Disorder/Fighting in Public Place 35 43 64 Other offences 175 169 238 Total 608 665 1 113

The Police do not maintain the above breakdown statistics before

2013. According to records, between 2009 and 2012, the numbers of NECIIs on recognizance arrested for criminal offences are 473, 506, 476 and 493 respectively (these figures do not include Vietnamese). Nevertheless, during that period there were very few Vietnamese non-refoulement claimants.

The Police do not maintain the crime figures by district.


Separately, the Immigration (Amendment) Ordinance 2009 came into effect in November 2009, adding a new section 38AA to the Ordinance to prohibit illegal immigrants and persons who are subject to removal or deportation orders from taking any employment or establishing/joining in any business. According to the ImmD's records, from the commencement of the Ordinance to end 2015, the number of NECII (including Vietnamese) on recognizance arrested for breach of section 38AA are tabulated below:

Year Number of persons arrested

2009 (since November) 36 2010 172 2011 156 2012 190 2013 165 2014 166 2015 232

(4) In 2015-2016, the estimated expenditure relating to the handling of

non-refoulement claims amounts to $644 million, including $207 million for screening claims and processing appeals, $108 million for the provision of legal assistance, and $329 million for humanitarian assistance to cover claimants' basic needs whilst they are here. The estimated expenditure for 2016-2017 will be reflected in the 2016-2017 Estimates.

Housing Needs and Home Ownership Aspirations of Young People 19. MR KWOK WAI-KEUNG (in Chinese): President, the Chief Executive (CE) announced in July 2012 that the Government planned to support non-governmental organizations (NGOs) with the full capital costs of building youth hostels. The Government also indicated that it would actively assist interested NGOs in rolling out youth hostel projects (YHPs) as soon as possible. Nevertheless, it has already been three and a half years since CE made the aforesaid announcement, but so far no construction works for YHP have commenced, and some YHPs have been postponed or even shelved due to various reasons. Regarding the housing needs and home ownership aspirations of young people, will the Government inform this Council:


5909

(1) of the number of hostel units involved, the latest progress and the anticipated completion date of each YHP implemented by the Government in collaboration with NGOs and private land owners; the number of projects postponed and the details concerned; the number of projects shelved and the reasons concerned; the respective numbers of units involved in the projects which have been postponed, scaled down and shelved; whether the total number of units that can be provided by the various projects at present can meet the target of providing 3 000 units in the first round; if the target cannot be met, how the authorities will increase the supply of youth hostels;

(2) whether it has formulated standardized arrangements (e.g. the

number of people living in each unit, the eligibility criteria and the maximum tenancy period) for youth hostels; if it has, of the details; given that the authorities indicated in February 2013 that the aggregate tenancy for youth hostel units should not exceed five years, how the authorities will respond to young people's aspirations to continue to rent and stay in youth hostel units after living there for five years;

(3) as it has been reported that some operating organizations of youth

hostels intend to stipulate that if tenants give birth to children during their stay at the youth hostels, their tenancies will not be renewed and they will be required to move out from the hostels after a transitional period, whether the authorities have provided guidelines to the operating organizations on the handling of such kind of situations; if they have, of the details, including whether they have established a mechanism for exercising discretion to allow the aforesaid tenants with urgent housing needs to apply for extending their tenancies; if they have, of the details; if not, the reasons for that; and

(4) apart from providing youth hostels, whether it has formulated new

policies to help address the housing needs and home ownership aspirations of young people by enhancing the existing housing ladder; if it has not, of the reasons for that?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, to optimize the development potential of sites held by non-governmental organizations (NGOs) and to fulfil the aspiration of some working youths in having their own living


space, the Chief Executive announced the Youth Hostel Scheme (YHS) in the 2011-2012 Policy Address. Under the YHS, NGOs are fully funded by the Government to construct youth hostels on sites in their hands. Subvented NGOs will then rent hostel units to working youths aged 18 to 30 at a rate not exceeding 60% of market rental. Upon completion, these youth hostels will be operated on a self-financing basis. The Home Affairs Bureau has been actively taking forward the YHS and has been in close liaison with relevant NGOs and providing them with necessary assistance. Regarding the various parts of the question raised by Mr KWOK Wai-keung, upon consultation with the Transport and Housing Bureau, our consolidated reply is as follows:

(1) We are actively pursuing five projects under the YHS, which are being taken up by the Tung Wah Group of Hospitals (TWGHs), the Hong Kong Federation of Youth Groups (HKFYG), the Hong Kong Association of Youth Development (HKAYD), the Hong Kong Girl Guides Association (HKGGA) and Po Leung Kuk (PLK). The expected completion date and estimated number of hostel places of each project are tabulated at Annex.

Among these projects, the HKFYG project in Tai Po, the PLK

project in Yuen Long and the TWGHs project in Sheung Wan have completed their respective technical feasibility studies. Various statutory procedures, such as lease modification and submission of town planning application, are underway. For the PLK project, we have consulted the Legislative Council Panel on Home Affairs on the funding application for the pre-construction works, and will soon submit the application to the Public Works Subcommittee for consideration. For the HKAYD project in Mong Kok and the HKGGA project in Jordan, the technical feasibility studies are in the final stage. We will consult the relevant District Council on the basic details of the projects.

Given the differences in scale, technical requirements and necessary

planning and land procedures among various YHS projects, the Home Affairs Bureau has been actively assisting NGOs in discussing with relevant departments to solve the technical problems encountered. All YHS projects are being gradually implemented, and none of them has to be shelved.


5911

The five projects currently in progress are expected to provide a total of about 2 700 hostel places. We also continue to explore with other interested NGOs the possibility of implementing more potential YHS projects. We will announce the details when the projects are mature. We are confident that the target of providing 3 000 hostel places can be reached.

(2) Under the YHS, all hostel units are either single rooms or double

rooms. On eligibility criteria, the income level of a one-person household applicant should not exceed the 75th percentile of the monthly earnings of employed persons aged 18 to 30 ($17,000 in 2014), and that of a two-person household applicant should not exceed twice the level of a one-person household. The total net asset limit of a one-person household and a two-person household should not exceed $300,000 and $600,000 respectively. An applicant should neither, solely or jointly, own any residential property in Hong Kong, nor hold any residential property in Hong Kong through a company.

Since youth hostels are to be operated on a self-financing basis, we

will give the operating NGOs a certain degree of freedom to select tenants as long as they meet the above criteria. Generally speaking, we are of the view that operators should take into account the personal and family background of applicants, such as the district of residence, current living condition, family status and affordability.

Housing is a precious resource to our society. To ensure fairness

and sufficient circulation of hostel units to benefit more young people, we stipulate that the first tenancy should be at least two years, which can be renewed for an aggregate of no more than five years. We hope that during the five-year tenancy, young people can benefit from the affordable rental of youth hostels and can accumulate certain savings for future development.

(3) Youth development is diversified. To benefit more young people

under the youth hostel policy, we will allow NGOs to have certain discretion to assist applicants with special needs. For applicants not meeting some eligibility criteria, if NGOs consider that residence in youth hostels can benefit their personal development, NGOs may flexibly allocate 5% of their hostel places to accommodate these partially eligible cases. Such discretion is also applicable to cases


of pregnancy during residence. We will maintain close liaison with NGOs to ensure that their youth hostels are operated in accordance to the policy objectives of youth development.

(4) It was generally agreed during public consultation of the Long Term

Housing Strategy (LTHS) that establishing an effective housing ladder will address the long-term housing need of young people. The Government announced the LTHS in December 2014 and adopted the "supply-led" strategy to rebuild the housing ladder. Apart from increasing the supply of public rental housing (PRH), the Government will provide more subsidized sale flats (SSFs), expand the forms of subsidized home ownership and facilitate the market circulation of existing SSFs, as well as stabilize the residential property market through steady land supply and appropriate demand-side management measures, in order to gradually avert the housing supply-demand imbalance.

Based on the latest projection, the total housing supply target for the

10-year period from 2016-2017 to 2025-2026 is 460 000 units, with the split between public and private housing supply remaining at 60:40. Accordingly, the public housing supply target is 280 000 units, including 200 000 PRH units and 80 000 SSFs; while the private housing supply target is 180 000 units. The housing demand projection has taking into account the housing needs of different sectors of the society, including the housing needs of young people who form new households when they get married or seek independent living.

The Government will continue to spare no effort in identifying

suitable land. It will also collaborate with the Hong Kong Housing Authority and other relevant organizations with a view to achieving the public housing supply target in order to address the long-term housing demand of, amongst others, young people. As for private housing, as at end December 2015, the projected supply in the first-hand private residential property market for the coming three to four years is approximately 87 000 units. Steady land supply and appropriate demand-side management measures will help stabilize property price and rental level, which in turn benefit people who intend to buy or rent private residential flats from all walks of life, including young people.


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Annex

Details of Existing YHS Projects

Name of NGO Site

Estimated number of

units

Estimated number of

hostel places

Estimated completion

date* 1 Tung Wah Group

of Hospitals No. 122A-130 Hollywood Road, Sheung Wan/IL 338

210 302 mid-2020

2 Hong Kong Federation of Youth Groups

No. 2 Po Heung Street, Tai Po Market/Lot 1944 in DD 6

78 80 mid-2018

3 Hong Kong Association of Youth Development

No. 9 Arran Street, Mong Kok/KIL 6223

72 90 end 2019

4 Hong Kong Girl Guides Association

Junction of Ferry Street and Jordan Road, West Kowloon/Proposed KIL 11128

534 534 end 2020

5 Po Leung Kuk Junction of Shap Pat Heung Road and Tai Shu Ha Road West in Ma Tin Pok, Yuen Long

1 248 1 680 mid-2020

Total 2 142 2 686 Note: * The project completion dates are subject to various factors, such as the progresses of

statutory procedures, public consultations and discussion at meetings of the Legislative Council Finance Committee. The dates are therefore the best estimates currently available.


Measures to Nurture Talents for Information Technology Industry 20. MR CHARLES PETER MOK (in Chinese): President, some members of the information technology (IT) industry have relayed to me that at present, the lack of recognition of the professional status of IT practitioners and the absence of a clear career advancement path in the industry have resulted in persistent shortage and mismatch of talents in the industry. In addition, the quality of IT education in primary and secondary schools varies greatly due to differences in school resources available, and the contents of the IT courses concerned are outdated, thus failing to nurture quality talents required for the development of the IT industry. All these, coupled with the steep decline in the number of students taking the Information and Communication Technology Examination of the Hong Kong Diploma of Secondary Education Examination in recent years, have caused such members of the IT industry to worry about the long-term supply of IT manpower. In this connection, will the Government inform this Council:

(1) given that the Task Force on Information and Communications

Technology (ICT) Professional Development and Recognition set up under the Digital 21 Strategy Advisory Committee already submitted, in August 2015, its final report on examination of the case of establishing a unified framework for ICT professional recognition (unified framework), of the work progress of the authorities in implementing the relevant recommendations; whether they have drawn up a timetable for establishing the unified framework; if they have, of the details; if not, the reasons for that;

(2) of the details (including the number of training places offered and

the average hours of training received by each teacher each year) of the professional training provided in the past three years by the authorities for teachers teaching the subjects of science, technology, engineering and mathematics in secondary schools; the details of the authorities' plans to provide professional training for such teachers in the coming three years (including the timetable);

(3) as currently there are only eight partner schools participating in the

Enriched IT Programme in Secondary Schools (the Programme) implemented by the authorities, whether the authorities will expand the scale of the Programme; if they will, of the details (including the timetable, the number of partner schools to be added and the additional resources to be provided); if not, the reasons for that; and


5915

(4) whether the authorities will increase the subsidy provided under the Continuing Education Fund for people taking ICT courses, so as to encourage training bodies to provide more courses in this field and to encourage more people to take such courses?

SECRETARY FOR INNOVATION AND TECHNOLOGY (in Chinese): President, having consulted the relevant Policy Bureaux, our reply to the four parts of the question is as follows:

(1) The Government established the Task Force on Information and Communications Technology (ICT) Professional Development and Recognition in November 2012 under the Digital 21 Strategy Advisory Committee to examine the case of establishing a unified framework for ICT professional recognition in Hong Kong. The Task Force completed a report in mid-2015 to recommend the way forward. The report was also published on the website of the Office of the Government Chief Information Officer (OGCIO) in September 2015. The report pointed out that as the industry and the public have not yet reached a general consensus on some implementation details of the unified framework for ICT professional recognition, it would be difficult to implement the framework. Therefore, at present, the Government does not have a timetable for establishing a unified framework for ICT professional recognition. Nonetheless, with reference to the recommendations in the report, the Government will continue to facilitate local ICT professional development through various measures including:

(i) implementing the "Enriched IT Programme in Secondary

Schools" to cultivate ICT talents;

(ii) providing funding support to ICT professional development initiatives through various existing funding schemes;

(iii) encouraging government information technology (IT) staff to

attain relevant ICT professional qualifications;

(iv) collaborating with other stakeholders to develop and update the Specification of Competency Standards for the ICT industry under the Qualifications Framework; and


(v) encouraging qualifications awarding bodies to continue to explore cross recognition of professional qualification schemes between Hong Kong and the Mainland and other jurisdictions.

(2) In the past three years, the Education Bureau continuously provided

professional development programmes to secondary teachers teaching science, technology, engineering and mathematics (STEM) related subjects in secondary schools. Please refer to Annex 1 for relevant numbers of training places and programme types. The modes of the training activities include symposia/seminars, workshops, experience sharing sessions, and so on. Teachers could apply for the programmes according to their personal needs or the needs of their schools. Regarding the average hours of training received by each teacher every year, we do not have relevant figures in hand.

In the next three years, the Education Bureau will organize professional development programmes on STEM education for school principals, middle managers and relevant teachers. These programmes will focus on developing students' ability in integration and application of knowledge and skills to facilitate the development of STEM education. Please refer to Annex 2 for numbers of participants and programme types. The modes of the activities will also include symposia/seminars, workshops, experience sharing sessions, and so on.

(3) The Government has allocated $75 million to launch the "Enriched

IT Programme in Secondary Schools" which would last for eight years starting from the 2015-2016 school year. Under collaboration among Government, schools, tertiary institutions and the industry, eight partner schools would run Enriched IT Classes to provide in-depth IT training for students with interest and talents in IT. Apart from partner schools, every year the Programme invites all local secondary schools to submit proposals for organizing different IT learning activities outside the school curriculum, so as to provide more opportunities for students to apply IT knowledge as well as to nurture their creativity through IT or related activities. Each selected proposal will be provided with a maximum funding support of $50,000.


5917

The OGCIO will conduct a mid-term review in 2017-2018 (that is, two years after implementation of the Programme), and consider the way forward of the Programme in 2020-2021. The OGCIO will report on the progress of the Programme to the Panel on Information Technology and Broadcasting regularly.

(4) Eligible applicants under the Continuing Education Fund (CEF) may

apply for reimbursement of 80% of the fees of the courses upon successful completion, up to a ceiling of $10,000 for each applicant. At present, the tuition fees of most of the ICT and related courses under CEF are at or below $10,000. The current level of subsidy is generally sufficient.

Annex 1

Professional Development Programmes related to Science Education, Technology Education and Mathematics Education Key Learning Areas (KLA) for secondary teachers from 2012-2013 to 2014-2015 school years:

Programmes (Half-day course)

School Year 2012-2013 2013-2014 2014-2015 Number of

Places Number of

Places Number of

Places Principals and Middle Managers (KLA Co-ordinators/Panel Heads) (1) Symposium

824 190 680

Middle Managers and Teachers (2) Understanding and Interpreting the

Curriculum 5 294 5 129 3 210

(3) Curriculum Planning (4) Learning, Teaching and Assessment

14 347 14 223 13 488 (5) Enriching Knowledge


Annex 2

Promotion of STEM Education Plan for Professional Development Programmes

Professional Development Programmes for primary and secdonary schools for 2015-2016 to 2017-2018 school years:

Programmes (Half-day Course)

School Year 2015-2016 2016-2017 2017-2018 Number of

Places Number of

Places Number of

Places Principals and Middle Managers (KLA Co-ordinators/Panel Heads/Primary School Master/Mistress (Curriculum Development)) (1) Symposium

800 800 800

Middle Managers and Teachers (2) Understanding and Interpreting the

Curriculum 1 500 1 500 1 500

(3) Curriculum Planning (4) Learning, Teaching and Assessment

1 500 1 500 1 500 (5) Enriching Knowledge (6) Networking Activities (by district) 1 600 1 600 1 600 Regulation of Sale of Air Tickets by Airlines 21. MR KENNETH LEUNG (in Chinese): President, recently, some members of the public have relayed to me that some airlines openly sold on their official web sites air tickets for flights not yet approved by the Civil Aviation Department, and put a remark on their reservation systems that the flights were "subject to government approval". The airlines concerned subsequently changed the departure time of those flights unilaterally, without making any compensation to customers who had bought the tickets. In this connection, will the Government inform this Council:


5919

(1) whether it knows the meaning of the words "subject to government approval" displayed on the ticketing web sites of these airlines; whether the existing legislation prohibits airlines from openly selling air tickets for flights which are subject to approval by the authorities; if not, of the reasons for that; if so, whether the Government has studied if the airlines concerned have breached the law;

(2) of the number of complaints received by the authorities in the past

five years about the arrangements for the sale of air tickets by airlines and, among them, the number of those which were accepted by the authorities; and

(3) whether it knows if the airlines had, when selling air tickets for

flights which were subject to government approval, clearly informed their customers that the airlines had the right to change the departure time of flights unilaterally without making compensation; if the airlines concerned had not, whether it has studied if they have violated the provisions relating to "false trade descriptions" and "misleading omissions" in the Trade Descriptions Ordinance (Cap. 362); if it has studied, of the results?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, at present, airlines are required to apply to the Civil Aviation Department (CAD) of the HKSAR and the relevant foreign aeronautical authorities for approval for the operation of flight services. In general, the strategy and arrangement of the sale of tickets for these services are not regulated under the bilateral Air Services Agreement (ASA) or local legislation concerning air transport. Similar to other commercial organizations in the service industry, airlines will set out the sales conditions in relation to its provision of services. Airlines would set out the relevant conditions in accordance with the Conditions of Carriage. These conditions would include fares, taxes, fees and charges, details concerning refusal of and limitation on carriage, schedules, arrangement for cancellation of flights as well as details for refunds. Upon the purchase of an air ticket by the customer, these conditions will form part of the commercial contract between the airline and the customer. The commercial contract is not subject to the Government's regulation but the details of the contract must comply with


relevant legislations. Customer should check with the airline concerned or travel agents on the meaning and applicability of these conditions when purchasing an air ticket. Irrespective of the reasons, should an airline fail to provide services after the air ticket is sold, the airline concerned must make necessary arrangement in accordance with the Conditions of Carriage or its performance pledge (for example, arrange for another flight for its passengers or provide refunds), so as to minimize the inconvenience caused. Issues concerning compensations should be resolved and negotiated between the airline and the customer concerned in accordance with the Conditions of Carriage and conditions set out in the air ticket. Should the parties fail to reach a consensus, the case could be followed up with in accordance with the legislations on the protection of consumer interests in general. My reply to the specific parts of Mr Kenneth LEUNG's question is as follows:

(1) As aforementioned, airlines are required to apply to the CAD and the relevant foreign aeronautical authorities for approval for the operation of flight services. These services could only be provided with the approval of both aeronautical authorities. The strategy and arrangement of the sale of tickets for these scheduled services in general are not regulated under the ASA or local legislation concerning air transport. At present, while the Government has no legislation prohibiting airlines from selling tickets for services that are pending approval, the Government has reminded airlines that they should set out clearly the Conditions of Carriage so that customers could make an informed decision, including any possible risk.

(2) In the past five years, the number of complaint cases concerning

airlines' services received by the Transport and Housing Bureau, the CAD, the Consumer Council (CC) and the Customs and Excise Department (C&ED) is tabulated as follows. However, there is no further breakdown on the nature of these cases (for example, whether they are related to the arrangement for the sale of air tickets by airlines).


5921

2011 2012 2013 2014 2015 Number of cases received by the Transport and Housing Bureau

2 1 2 3 7

Number of cases received by the CAD

25 65 128 213 147

Number of Complaints received by the CC in relation to airline services

124 118 374 677 918

Reports received by the C&ED in relation to airlines* N/A N/A 29 101 84

Note: * Since 19 July 2013 when the amended Trade Description Ordinance came

into effect.

In general, if the Transport and Housing Bureau and the CAD received complaints that are between an airline and its customers concerning tickets or services, depending on the respective circumstances, the Transport and Housing Bureau and the CAD would relay the case to the airline concerned and urge the airline to follow up accordingly or advise the customers to contact the CC for further assistance.

The CC and the C&ED will, upon receipt of complaints or reports,

consider the nature of the case (for example, whether the complainant only wishes to put the matter on record and requires no follow-up action) and whether there is sufficient information for follow-up action.

(3) As aforementioned, conditions including fares, taxes, fees and

charges, details concerning refusal of and limitation on carriage, schedules, arrangement for cancellation of flights as well as details for refunds are set out in accordance with the Conditions of Carriage. These Conditions will form part of the commercial contract between the airline and the consumer. Customer should check with the airline concerned or travel agents on the meaning and applicability of these conditions when purchasing an air ticket.


The Trade Descriptions Ordinance (TDO) prohibits certain unfair trade practices deployed by traders against consumers, such as "false trade descriptions" and "misleading omissions". Every case is unique. Whether an offence under the TDO is committed should be determined according to the facts (including the act or omission by relevant persons) and evidence of each case. A generalized conclusion cannot be drawn readily. If consumers suspect traders (including airlines) of infringing the TDO, they may file a report with the C&ED. The C&ED will take appropriate follow-up action. If consumers consider the terms in individual consumer contracts to be unconscionable or to be affecting their consumer rights, and the dispute cannot be resolved by negotiation with the trader, they may consider lodging complaints with the CC, pursuing mediation or obtaining legal advice for deciding whether to take legal action, which are existing ways for dealing with such matters.

Transfer Exercises for Sitting PRH Tenants 22. MR JAMES TO (in Chinese): President, to improve the living environment of public rental housing (PRH) tenants, the Hong Kong Housing Authority (HA) implements the "Territory-wide Overcrowding Relief transfer exercises" twice a year and the "Living Space Improvement Transfer Scheme" once a year. PRH tenants with a living space below 5.5 m2 and 7 m2 (calculated on the basis of internal floor area) per person may apply for transfer to larger flats under the two aforesaid transfer schemes respectively. In this connection, will the Government inform this Council:

(1) of the respective numbers of applications received and approved by HA under the two aforesaid transfer schemes in the past three years; and the average magnitude of increase in the living space of the transferred tenants;

(2) whether HA will concurrently handle applications for transfer to

larger flats submitted by overcrowded households and their applications for splitting tenancies; if HA will, of the number of such applications from tenants handled last year; if not, the reasons for that;


5923

(3) of the respective numbers of PRH flats set aside by HA for transfer in various districts for flat allocation (i.e. Urban, Extended Urban and the Islands, as well as the New Territories) in each of the past three years; and

(4) whether HA will carry out appropriate conversion works for the

relevant units before the tenants move in, so as to facilitate tenants with special needs, such as pregnant women, people with disabilities or patients with mental illnesses, in adapting to the new environment more readily?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, subject to availability of housing resources, the Hong Kong Housing Authority (HA) currently conducts one Territory-wide Overcrowding Relief Transfer Scheme (TWOR) and one Living Space Improvement Transfer Scheme (LSITS) Exercise every year so that public rental housing (PRH) tenants with an internal floor area (IFA) below 5.5 sq m per person and IFA below 7 sq m per person respectively will have chance to improve their living conditions. Eligible applicants under the two schemes will be invited for flat selection. Housing Department (HD) will determine the order of priority for flat selection according to the living density of the applicants. Household with the highest density will come first. If the living density of two households is the same, the household of a larger size will have priority. If both conditions are the same, the length of residence in the existing tenancy will determine the priority. If all conditions are the same, the order of priority will be determined by random generation of the computer. Currently, the number of overcrowded households (that is, IFA below 5.5 sq m per person) has decreased from about 18 000 (about 3.1% of the total PRH households) in 2001 to around 3 400 (about 0.46% of total PRH households) as at end September 2015. This figure is lower than the prevailing Key Performance Indicator of the HA, which was set at 0.55%. My reply to the various parts of the question raised by Mr James TO is as follows:

(1) In the past three years, that is, from 2012-2013 to 2014-2015, the number of eligible applicants and the number of successful transfer cases under the TWOR and the LSITS are as follows:


Statistics Year of Launching the exercise

TWOR Exercise LSITS Exercise

Number of eligible

applications#

Number of successful transfer

cases

Number of eligible

applications#

Number of successful transfer

cases

2012-2013 2 284@ 708 4 602 1 055 2013-2014 1 182 589 4 543 1 170 2014-2015 1 539 625 4 660 850*

Notes: # Some applicants are not eligible under the schemes. For example, those

applicants who contravene the conditions of the tenancy agreement will have their applications cancelled.

@ Two TWOR exercises were conducted in 2012-2013. * Another 316 tenants have chosen newly completed flats of which intake

has not yet commenced and tenancy agreements have not been signed. Hence, they are not included in the above figures.

As at end March 2015, the average living area of PRH tenants is

13.1 sq m per person. Since successful tenants under the two transfer schemes selected their flats according to their number of authorized persons in the tenancy and the allocation standard, the HD has not kept statistics regarding the average increase in living area for successful tenants under the two transfer schemes.

(2) The objective of the two transfer schemes is to improve the living

condition of PRH tenants. Each eligible applicant will have only one chance to select one flat in the flat selection exercise. For those PRH tenants who apply for household splitting on grounds of serious and deep-rooted disharmony among family members or other compassionate reasons, the relevant estate office will consider their applications on a case by case basis and, where necessary, refer them to relevant departments/organizations for assessment and recommendation. If the application for household splitting is approved, the HD will arrange flat allocation to the tenant concerned according to the splitting policy rather than through the annual TWOR or LSITS exercise.


5925

(3) In launching the above two transfer schemes, the HD will strive to reserve flats of various sizes in each district for applicants' selection according to available resources at that time, the number of eligible applications, their household sizes and districts. For 2012-2013 to 2014-2015, the number of reserved flats in different districts for these two transfer schemes are as follows:

Statistics Year of Launching the exercise

TWOR Exercise LSITS Exercise

Urb

an

New

Ter

rito

ries

(N.T

.)

Exte

nded

Urb

an#

Isla

nd

Tota

l

Urb

an

New

Ter

rito

ries

(N.T

.)

Exte

nded

Urb

an#

Isla

nd

Tota

l

2012-2013 739 258 362 4 1 363 876 162 323 4 1 365 2013-2014 606 135 459 0 1 200 604 104 677 3 1 388 2014-2015 332 440 528 0 1 300 186 568 629 4 1 387

Note: # Extended Urban District includes Tung Chung, Sha Tin, Ma On Shan,

Tseung Kwan O, Tsuen Wan, Kwai Chung and Tsing Yi.

(4) Information regarding the environment of the flats available for selection under the two transfer schemes will be provided for applicants' reference. For elderly and disabled applicants who have special needs and are recommended by the relevant organizations (such as the Social Welfare Department and the Hospital Authority), the HD will provide flat conversion works according to their needs and bear the costs so incurred after they have selected their flats. If the request for flat conversion works is raised before or at the time of intake, the HD will handle the works as soon as possible to facilitate the tenant to move in the flat. If necessary, the date of commencement of the tenancy will be postponed until the completion of conversion works. In addition, upon production of medical certificate, if the applicant or an authorized member of the tenancy has an expected child of at least 16 weeks gestation as at the date of application; require non-temporary indoor use of wheelchair;


is a tetraplegic patient; a renal patient in need of continuous ambulatory peritoneal dialysis at home or a hyperactive patient, he/she will have one-grade-up in the calculation of household size and living density.

BILLS First Reading of Bill PRESIDENT (in Cantonese): Bill: First Reading. APPROPRIATION BILL 2016 CLERK (in Cantonese): Appropriation Bill 2016. Bill 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 Bill PRESIDENT (in Cantonese): Bill: Second Reading. APPROPRIATION BILL 2016 FINANCIAL SECRETARY (in Cantonese): President, I move that the Appropriation Bill 2016 be read the Second time. Introduction This is my ninth year as Financial Secretary. Over the past years, the people of Hong Kong and I together have witnessed the incessant ups and downs in the global economy. I feel blessed that Hong Kong has managed to ride out the storms. We have secured decent economic growth. We have maintained low unemployment and we have managed healthy public finances. I am deeply


5927

indebted to the previous generations for the solid foundations that they have built. I am profoundly impressed too by the tenacity of the Hong Kong people. Openness, diversity, freedom and the rule of law, which have all along been the core values of the people of Hong Kong, have guided our way. Even though the development path of Hong Kong has not been an easy one, our direction is clear and, step by step, we have been charting our course, a course that we call our own. I think we, the Hong Kong people, are proud of our ability to persevere through these turbulent years. It is only two months since the start of 2016, but the occurrence of incidents in Hong Kong has given rise to grave concerns. Two weeks ago, in the early hours of the second day of the Lunar New Year, a serious unlawful incident broke out in Mong Kok. A handful of people lost their rationality and attacked the police officers and reporters that were present, provoking a large-scale riot and causing dozens of injuries. I believe many people share my feelings towards the incident. Distressed and angry, I was perplexed as to why violence had flared in Hong Kong. I was shocked that our city could have turned overnight into such a strange and alien place that I hardly recognized. I was troubled why the core values that we long cherished had been devoured by violence and hatred. Acute social conflicts will add uncertainties to the already adverse economic environment. 2016 is an election year. Apart from the Legislative Council By-election to be held four days from today, a Legislative Council General Election is scheduled to be held in six months' time. We anticipate that political disputes will only intensify over the coming months. Politics and economics are closely intertwined. Political volatility will unavoidably impact on our economy. It is the duty of the Government to take on challenges in our society. As Financial Secretary, it is my duty to mobilize resources effectively to maintain Hong Kong's economic development and fiscal health; to support local enterprises, in particular the small and medium enterprises (SMEs), to cope with economic volatilities; and to safeguard the jobs of workers.


The Government should also continue to fortify the economic foundation of Hong Kong, promote diversity, and channel public resources towards improving people's livelihood and supporting the disadvantaged. All sectors should have a fair chance in sharing the fruits of our economic success, and everyone in Hong Kong, regardless of age, gender and race, should be able to unleash their potential and lead a better life through hard work. Economic Performance in 2015 Export performance of the Asian region was hit by the global economic setback and highly volatile financial markets in 2015. Our exports of goods recorded the first annual decline since 2009, down by 1.7% in real terms. Exports of services dropped by 0.6%, the first annual decrease since 1998. Inbound tourism was weak and visitor arrivals dropped by 8% in the fourth quarter, down by 2.5% for the whole year. Retail sales slackened, recording the first annual decrease since 2009. Domestic demand was the key driving force of economic growth last year. Although the investment atmosphere turned more cautious, local consumption as well as expenditures on infrastructure and private construction projects remained resilient. These, together with the stimulus effect of the relief measures introduced in last year's Budget, led to an overall economic growth of 2.4%. This is the fourth consecutive year that our economic growth was lower than the annual average of 3.4% over the past 10 years. The economy saw significant downward pressure in the latter half of the year, further slowing down to a 1.9% growth in the fourth quarter. The unemployment rate averaged at a low level of 3.3% for the year as a whole. Wages and income improved generally. Employment earnings for the lowest three income decile groups of full-time employees rose by 5% to 6% as compared with the year before. But the recent decline in labour demand in the sectors related to inbound tourism is giving us cause for concern. Given the slowdown of the local economy and the mild imported inflation, inflation has dropped for four consecutive years. The headline inflation rate in 2015 was 3%. Netting out the effects of the Government's one-off measures, the underlying inflation rate, at 2.5%, was down by 1% from 2014.


5929

Economic Outlook for 2016 Since the start of 2016, the global economic climate has continued to be unsteady, marked by increasing risks, amid the modest and patchy economic growth of advanced economies, downward pressures on emerging markets and heightened geopolitical tension. The United States Federal Reserve Board started an interest rate increase last year, but the central banks of the Eurozone and Japan have maintained their quantitative easing policies and adopted negative interest rate measures. The divergent monetary policies are causing volatility in the international financial markets and capital flows. Emerging economies will be under the dual pressure of falling commodity prices and suppressed financial markets. The Mainland's economy will also face downward pressure. As for Hong Kong, local consumption and investor sentiment have been dented by concerns over the uncertainties associated with the United States interest rate increases and the dimmer global economic outlook, the lull in external trade and the slowdown in inbound tourism. The pressure may spill over into the job market and business operation of enterprises. The value of total exports of goods and the number of visitor arrivals in Hong Kong have both recorded a year-on-year decline since mid-2015, and the fall is likely to be more severe in 2016. I forecast Gross Domestic Product (GDP) growth in real terms at 1% to 2% in 2016, lower than last year's growth. Given the subdued global commodity prices, imported inflation is expected to be relatively mild. Slower economic growth and the adjustment in the property market will reduce rental pressure. I forecast that the headline inflation rate for 2016 will be 2.3%, with the underlying inflation rate at 2%. Support Measures The local economy is laden with risks in the year ahead; the outlook is far from promising. We need to take timely and appropriate measures to stimulate the economy, support local enterprises and safeguard employment.


Helping Small and Medium Enterprises There are 320 000 SMEs in Hong Kong, employing 50% of the private sector workforce. This underscores the role of SMEs as the mainstay of our economy. To gear up for the adversities ahead, I shall provide SMEs with appropriate support measures to stabilize the employment market. To help SMEs tide over their liquidity needs, I shall introduce three measures:

(a) extend the application period for the "special concessionary measures" under the "SME Financing Guarantee Scheme" to 28 February 2017;

(b) reduce the annual guarantee fee rate for the measures by 10%; and

(c) remove the minimum guarantee fee for the measures.

To ease the burden on enterprises, I shall reduce profits tax for 2015-2016 by 75%, subject to a ceiling of $20,000. This proposal will benefit 130 000 taxpayers and reduce government revenue by $1.9 billion. I shall waive the business registration fees for 2016-2017 to benefit 1.3 million business operators. This proposal will reduce government revenue by $2.5 billion. To enhance the long-term competitiveness of SMEs, I shall launch a Pilot Technology Voucher Programme under the Innovation and Technology Fund (ITF) to subsidize their use of technological services and solutions to improve productivity and upgrade or transform business processes. The three-year pilot programme will provide, on a matching basis, a maximum subsidy of $200,000 for each eligible SME. The estimated expenditure of this programme is $500 million. Supporting Tourism Tourism contributes 5% to our GDP and employs 270 000 people. It provides plenty of job opportunities. For some 10 years, tourism and other related industries have experienced rapid growth through the support of the


5931

Mainland's Individual Visit Scheme and its related policies. The number of inbound visitors has increased to 60 million, four times that of 2003. The local tourism industry is facing keen competition as a result of a weakening external economy, devaluation of currencies of neighbouring places and their relaxation of visa requirements for Mainland tourists since last year. This, coupled with the "one trip per week" measure for Shenzhen residents, has caused a drop in visitor arrivals. Apart from external factors, some recent incidents in Hong Kong are causing concern. These include a handful of people choosing to express their views and political demands using irrational and uncivilized tactics, such as hurling abuses at visitors and kicking their suitcases. Furthermore, problems arising from coerced shopping have been plaguing the tourism sector. These destructive acts have not only damaged the economy, but have also severely tarnished Hong Kong's reputation as a hospitality city internationally. While some have claimed that the acts were committed out of concern for "local" interests, their actions are in fact not the kind of behaviour that reflects love for Hong Kong. If they truly care about the development of Hong Kong, they should by no means exercise their right to freedom of expression at the expense of peace in our society and livelihood of innocent citizens. The tourism industry has entered a period of consolidation. In view of the changing mix and spending pattern of visitors, we need to review the development strategy of our tourism industry. Other than seeking growth in visitor numbers, we should move towards diversified and quality-driven high value-added services, with a view to attracting more high-spending overnight visitors to Hong Kong. In light of this new situation, I shall launch short, medium and long-term measures to reduce the industry's costs of operation and enhance Hong Kong's attractiveness and competitiveness. I shall introduce three short-term measures, costing a total of $140 million, for related trades and industries:

(a) waive the licence fees for 1 800 travel agents for one year; (b) waive the licence fees for 2 000 hotels and guesthouses for one year;

and


(c) waive the licence fees for restaurants and hawkers and fees for restricted food permits for one year, benefiting 27 000 restaurants and operators.

In the medium term, I shall allocate $240 million for the Government and the industry to jointly launch five measures:

(a) expand the scale of major events to be held this year, including holding the Formula E Championship for the first time, expanding the venue for the Hong Kong Wine and Dine Festival with more featured themes, extending the race of the Hong Kong Cyclothon to 50 km to attract more overseas cyclists, staging additional Pulse 3D Light Shows at the Hong Kong Cultural Centre, and stepping up publicity for international sports events such as the Rugby Sevens, the tennis open tournament and the golf open tournament;

(b) through the Hong Kong Tourism Board (HKTB), re-package Hong

Kong's tourism image with new promotional videos, launch a new round of publicity for short-haul markets, and step up publicity in the Mainland for quality and honest tours;

(c) through the HKTB, assist the industry to open up new visitor sources

through various means, including implementation of the matching fund for promoting tourist attractions, promotion of shopping and spending, promotion of MICE (Meetings, Incentive Travels, Conventions and Exhibitions) tourism and "fly-cruise" tours, as well as waiving of local traders' participation fees for overseas promotion fairs;

(d) through the Travel Industry Council of Hong Kong, subsidize small

and medium-sized travel agents, on a matching basis, to make use of information technology (IT) so as to enhance the competitiveness of the industry; and

(e) continue to promote Hong Kong's natural scenery as well as our

unique history and culture, including enriching the contents of the Dr Sun Yat-sen Historical Trail with the theme of "Art across Time", in tune with PMQ and the former Central Police Station Compound which will open this year.


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In the long run, we shall upgrade our tourism infrastructure. Hong Kong Disneyland will open in 2016 and 2017 respectively a new themed area based on Marvel's Iron Man franchise and a new hotel with a theme dedicated to the spirit of exploration. The Government will continue to discuss with the Walt Disney Company the overall development of the theme park. The first hotel in Ocean Park and the Water World in Tai Shue Wan are also scheduled for completion in 2017 and 2018 respectively. The Government will continue preparatory work for the tourism projects in Kai Tak and Lantau. The design work for the conference facilities above the proposed Exhibition Station of the Shatin to Central Link is underway. We shall embark on a pilot scheme on food trucks this year. The concept has attracted wide interest from the community. I shall increase the number of designated spaces for the food trucks to 16. The initiative will enhance the appeal of our tourist attractions and enrich the local food culture. Easing Financial Pressure Local consumption has been a key driver for Hong Kong's economic growth in recent years. Easing the burden of citizens will have a stimulus effect. Taking into account the current macro environment, the Government's fiscal capacity and the need to boost the economy in the short term, I shall introduce three relief measures:

(a) reduce salaries tax and tax under personal assessment for 2015-2016 by 75%, subject to a ceiling of $20,000. This proposal will benefit 1.96 million taxpayers and reduce government revenue by $17 billion;

(b) waive rates for four quarters of 2016-2017, subject to a ceiling of

$1,000 per quarter for each rateable property. This will benefit 3.17 million properties and reduce government revenue by $11 billion; and

(c) provide an extra allowance to social security recipients, equal to one

month of the standard rate Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance. This will involve an additional expenditure of $2.8 billion.


As regards recurrent measures, I shall adjust two categories of allowances under salaries tax and personal assessment from 2016-2017. First, the basic allowance and the single parent allowance will be raised from $120,000 to $132,000 and the married person's allowance from $240,000 to $264,000. These proposals will benefit 1.93 million taxpayers and reduce tax revenue by $2.9 billion a year. Second, I shall increase the allowances for maintaining a dependent parent or grandparent. Benefiting 600 000 taxpayers and reducing tax revenue by $860 million a year, the adjustments include:

(a) increasing the allowance for maintaining a dependent parent or grandparent aged 60 or above from $40,000 to $46,000. The same increase applies to the additional allowance for taxpayers residing with these parents or grandparents continuously throughout the year;

(b) increasing the allowance for maintaining a dependent parent or

grandparent aged between 55 and 59 from $20,000 to $23,000. The same increase applies to the additional allowance for taxpayers residing with these parents or grandparents continuously throughout the year; and

(c) raising the deduction ceiling for elderly residential care expenses

from $80,000 to $92,000 for taxpayers whose parents or grandparents are admitted to residential care homes.

This set of tax and short-term relief measures will cost $38.8 billion in total. Together with other spending initiatives in the Budget, they will have a fiscal stimulus effect of boosting the GDP for 2016 by 1.1%. I have to emphasize that relief measures are different from recurrent expenditure. Relief measures aim to help citizens cope with the current financial pressure and serve as a counter-cyclical measure to preserve economic stability and safeguard employment. These are subject to adjustments in light of the economic and financial position of the year. Recurrent expenditure is deployed for new policies, new services or enhancement of existing services.


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New Economic Order Since the 2008 financial tsunami, the global economy has undergone sweeping changes. With the global economic gravity shifting towards the East, emerging markets are playing a much more important and influential role. Breakthroughs in IT development have also brought about paradigm shifts in different economic and social spheres, changing our daily lives and business modalities. These two new forces have changed the global economic landscape, gradually shaping a "new economic order" globally, offering new directions and providing room for developments for both traditional and emerging industries. They have also lowered the threshold for start-ups and created a more open market ecosystem. These ground-breaking paradigm shifts have disrupted the conventional modalities, and unavoidably impacted on existing market players. We should not shy away from challenges in today's ever-changing world. Instead, we should rise to the challenges by taking a longer perspective and keeping an open mind. We should weigh the impact of these changes on the society and solve problems with an innovative mindset. The Government will uphold the long-held principles of technology-neutrality and protection of consumer rights in promoting the application of technology, ensuring the healthy development of the market with appropriate regulatory control. Over the years, Hong Kong has sustained its competitive edge because our trade network is highly internationalized, our market is transparent and open, and our society is clean and law-abiding. Under the "new economic order", we must act swiftly, get prepared, identify development opportunities and position Hong Kong as a key player in the competition. Building on our strengths, together with Hong Kong people's flexibility, resourcefulness and market acumen, we shall, as always, be able to stand out in the face of stiff global competition. Nurturing Innovation The application of many epoch-making innovative technologies such as cloud computing, big data, robotics, artificial intelligence and biotechnology is growing fast, bringing us many revolutionary business models and services.


More trading is being done virtually, and is no longer constrained by geographical boundaries. The highly-efficient global supply chains have connected markets in every corner of the world and presented different industries with a wider range of possibilities. Application of Research and Development Results Hong Kong has world-class IT facilities, research and development (R&D) institutes and personnel, financing platforms, and above all a well-developed system to safeguard intellectual property (IP) rights. The neighbouring Pearl River Delta Region, and Shenzhen in particular, has developed into a manufacturing hub of advanced technology products in recent years. The immense synergy effects so generated will provide powerful support for Hong Kong's internationalized corporations in material application, prototyping and production. Having regard to Hong Kong's practical circumstances, comparative advantages and the direction of our urban development, we can widely apply and commercialize R&D results in the three areas of robotics, healthy ageing and smart city to boost economic development and enhance the quality of life. With an ageing population and a shrinking work force, the application of smart production technologies, in particular robotics, is vital. Robotics can enhance production efficiency and quality. The manpower spared can be devoted to high value-added processes to increase the value of output. The Hong Kong Science and Technology Parks Corporation (HKSTPC) is considering promoting smart production and research at the Tseung Kwan O Industrial Estate. Advanced manufacturing industries using robotics and IT will be brought together to drive the development of the entire value chain, covering product R&D, design, production, testing, as well as marketing and branding. It is estimated that this project will cost $8.2 billion and will be completed in 2021-2022. The use of intelligent home care equipment, Internet of Things and medical rehabilitation devices helps improve the elderly's quality of life, alleviate burden on the healthcare system and promote healthy ageing, thereby enabling the


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elderly to lead an enjoyable life in the community. Many innovative technologies such as electronic wheelchair, medical image scanning system and medical equipment for stroke rehabilitation developed by local manufacturers and supported by the Science Park have come on stream. Biotechnology, healthcare and medicine will remain the key R&D focuses of the Science Park. The Government has earmarked $500 million to set up an Innovation and Technology Fund for Better Living to encourage different sectors to apply innovation and technology to improve the quality of living. In respect of the development of smart city, a locally-developed optical sensing system, which has won numerous international awards, has been in use in many countries and regions to monitor the conditions of tracks, cables and ducts to guard against system irregularities, and reduce the maintenance and operating costs of infrastructural facilities. The Government will implement the Water Intelligent Network project in phases by installing sensors in water supply networks to continuously monitor their conditions and reduce the risks of water main bursts and leakages, thereby ensuring the efficient use of freshwater resources. A new desalination plant using the latest reverse osmosis technology will be constructed at Tseung Kwan O. The design work for the first stage of the plant commenced at the end of 2015. The output of the plant, with a water production capacity of 130 000 cu m per day, which can be further expanded to 270 000 cu m per day, will account for 5% to 10% of Hong Kong's total freshwater consumption. Since last year, the Government has released 5 000 datasets in digital formats free of charge through the Public Sector Information portal data.gov.hk. This is to facilitate the industry to develop more mobile applications. To foster IT application and development, we shall refine the existing geographic information systems and explore ways to align and integrate the spatial data in Hong Kong, including the location and relevant information of facilities that are above, on and under ground level. I shall allocate an additional $200 million to install traffic detectors along some strategic routes to provide the public with more real-time traffic information and enhance transport efficiency.


The Government is committed to promoting the use of electric vehicles. We are actively installing more and better charging facilities and promoting the use of electric vehicles in the public transport sector. With the growing popularity of electric vehicles, there will be more retired batteries which can still be reused for energy storage. We shall organize an international competition this year to encourage the sector to explore ways to make good use of retired batteries. According to the Global Information Technology Report 2015 published by the World Economic Forum, Hong Kong's mobile network coverage ranks first in the world. Hong Kong is also among the world leaders in terms of the speed of broadband services and the number of Wi-Fi hotspots. The Government has earmarked $500 million to further increase the number of Wi-Fi.HK hotspots to over 30 000, bringing greater convenience to our citizens and tourists. The Government will introduce and enhance various funding schemes to encourage more private enterprises to invest in R&D and applied technology, and to translate outstanding local R&D achievement into products and services with commercial value. Other than injecting a sum of $5 billion into the ITF as intended, we shall introduce five measures:

(a) inject $2 billion to launch a Midstream Research Programme for Universities to provide funding support for universities to carry out more midstream and applied research projects in key technology areas;

(b) increase the level of cash rebate under the R&D Cash Rebate

Scheme to 40% to encourage private enterprises, SMEs in particular, to put more resources into R&D works;

(c) extend the Public Sector Trial Scheme to cover the incubatees of the

Cyberport and the Science Park for funding their production of prototypes or samples and conduct trials of their R&D results in the public sector, with a view to facilitating commercialization of R&D results;

(d) extend the scheme that provides funding support for the technology

transfer work of six universities by three years to 2018-2019; and


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(e) continue with the Technology Start-up Support Scheme for Universities to assist technology start-ups established by university teams in commercializing research results.

Fintech Taking advantage of technologies such as mobile communications technology and artificial intelligence, financial technologies (Fintech) offer consumers novel experiences in managing their finances and provide financial institutions with tools to improve their operational efficiency. Provision of financial services is no longer confined to traditional financial institutions such as banks and insurance companies. By leveraging the Internet and mobile technologies, telecommunication companies, e-commerce enterprises and start-ups are now able to provide financial services to individuals and enterprises. Fintech can be applied to a wide range of areas such as electronic payments, robo-advisors, distribution of financial products, big data analytics, cyber security, equity crowdfunding and peer-to-peer (P2P) lending. Some studies predicted that global investments in Fintech will surge from US$12 billion in 2014 to over US$46 billion in 2020. The Steering Group on Financial Technologies which I set up last year has examined the direction for Hong Kong's Fintech development jointly with the industry, R&D institutions and relevant regulatory authorities. It has recommended a number of measures for creating a conducive environment and encouraging financial institutions and professionals from around the world to drive the development and application of Fintech in Hong Kong. We shall actively follow up. In recent years, a number of international financial institutions and professional services firms, including Accenture, the Commonwealth Bank of Australia, KPMG, Nest and Tuspark, have chosen to establish laboratories and incubation programmes in Hong Kong. This underlines our edge in developing Fintech. The Government will set up a dedicated team under the Invest Hong Kong (InvestHK) to organize international events and facilitate start-ups, investors and R&D institutions to establish their presence in Hong Kong.


The Enterprise Support Scheme under ITF will provide financial support to Fintech start-ups and financial institutions. The Cyberport will set aside a dedicated space of 3 000 sq m in its co-working space Smart-Space, and roll out a designated programme to provide support to 150 Fintech start-ups over the next five years. In addition, it will arrange for 300 university students to join Fintech training camps in overseas universities to gain more in-depth understanding of the career prospects in the sector. The Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC) and the Office of the Commissioner of Insurance will set up Fintech dedicated platforms to liaise with the industry to ensure that the market will balance between market demand and investors' understanding and tolerance of risk when introducing innovative financial products and services. Consumer protection is an important consideration in Fintech development. The Payment Systems and Stored Value Facilities Ordinance, which came into effect last year, has enhanced consumer protection. The HKMA is working with the Hong Kong Applied Science and Technology Research Institute, the Hong Kong Institute of Bankers and the Hong Kong Association of Banks to set up a cyber security programme, including the establishment of a cyber intelligence-sharing platform, and the conduct of risk assessment and professional certification. The Government will encourage the industry and relevant organizations to explore the application of "Blockchain" technology in the financial services industry, with a view to developing its potential to reduce suspicious transactions and bring down transaction costs. The Cyberport will provide training to the industry through its incubation programme to promote relevant technologies for developing more services and products. Start-ups Hong Kong is one of the most popular start-up hubs in the world. Last year, I introduced a series of measures to improve the ecosystem for start-ups to enable local industries to further diversify. According to InvestHK, there are now 1 600 local start-ups, representing an increase of 50% over 2014. Entrepreneurship is not exclusive to the young. Older people with societal experience and professional expertise can join the ranks of entrepreneurs to bring forth new possibilities by applying creativity and technology.


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I shall continue to offer comprehensive support to start-ups in various areas such as business incubation, financing, business expansion and office space. The new measures include the following:

(a) The Government will set up a $2 billion Innovation and Technology Venture Fund to co-invest with private venture capital funds on a matching basis in local technology start-ups;

(b) the Science Park will expand in stages to provide additional floor

area of 70 000 sq m for start-ups and other technology companies by 2020, with the project estimate amounting to $4.4 billion to be borne jointly by the Government and the HKSTPC; and

(c) the Cyberport will earmark $200 million to invest in its start-ups. The HKSTPC will continue to support start-ups through its Corporate Venture Fund and incubation programmes.

Creative Industries Hong Kong's creative industries are well-established, blessed with immense development potential and a wealth of talents. The Government will continue to support their healthy growth in line with market principles. The CreateSmart Initiative (CSI) was set up in 2009 to assist the trade in organizing projects for the development of creative industries. The Government will inject $400 million into CSI this year, with priority given to supporting start-ups and nurturing talents. Fashion and Design I announced last year that $500 million would be allocated to further the development of the fashion industry. I shall implement the three proposals made by the Advisory Group on Implementation of Fashion Initiatives, including:

(a) strengthening the promotion of local fashion designers and emerging fashion brands in Hong Kong and overseas;


(b) establishing an incubation programme for fashion designers, drawing on the experience of other fashion capitals like London, New York and Seoul; and

(c) setting up a resource centre to provide technical training and support

for young designers. I shall launch the third phase of the Design Incubation Programme in the coming financial year to help design start-ups build their business networks, publicize their products and conduct market promotions. The overall admission quota will be increased to 90 design start-ups. I shall also subsidize through CSI designers of 10 emerging local fashion brands to participate in the Paris Fashion Week, while the Hong Kong Trade Development Council (HKTDC) will organize fashion shows for Hong Kong designers in the New York Fashion Week, to showcase their brands, raise their profiles and attract overseas buyers. We shall launch a series of activities in the latter half of this year. Among them are the first CENTRESTAGE, an annual international fashion trade fair hosted by the HKTDC, and fashion shows and forums organized for Hong Kong and Asian brands during the Business of Design Week. Film Industry Last year, I injected $200 million into the Film Development Fund (FDF) and implemented a series of measures to promote local filmmaking and encourage young people aspiring to a film career to join the industry. The First Feature Film Initiative (FFFI) was relaunched last year to provide funding to budding directors. The award winners of the first FFFI have completed their works, and I look forward to the screening of these three films. As for the two pieces of winning work of the second FFFI, their production is under preparation. Locally-produced Cantonese films, a key component of the local culture, have all along been well-received by audiences in the Mainland and Southeast Asia. Cantonese is a common dialect shared by Guangdong and Hong Kong. The Guangdong Province has a population of over 100 million with box office receipts exceeding Renminbi (RMB) 4 billion yuan in 2014, offering an extensive market for our locally-produced Cantonese films. I shall inject an additional $20 million into the FDF to subsidize the expenses incurred by locally-produced


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Cantonese films for distribution and publicity conducted in the Mainland. The funding is proposed to be increased from the current $250,000 to $500,000 per film. This will assist the film industry in leveraging the enhanced measures under CEPA to promote Cantonese films to the Mainland. The Hong Kong Film Development Council will announce the details in due course. Arts and Sports To build a supportive atmosphere for arts and culture in the community and promote the development of local professional arts, the Art Development Matching Grants Pilot Scheme, funded in last year's Budget, will be launched this year. The pilot scheme will help the more established arts groups and organizations enhance their ability in raising private donations and sponsorships through matching grants, thereby widening their funding sources and promoting a culture of donation. The Government established the $7 billion Elite Athletes Development Fund in 2012 to provide financial resources for the Hong Kong Sports Institute and offer greater support to athletes, and at the same time identify and nurture young athletes with potential. Since the establishment of the fund, the number of full-time athletes has increased by 60%. The outstanding performance of Hong Kong athletes in international competitions in recent years is well-recognized and can foster the development of sports and attract more international competitions to take place in Hong Kong. Hosting international events not only provides more opportunities for athletes to demonstrate their strengths, but also brings economic benefits, enhances our international profile and develops the potential of the sports industry. Finding New Markets Under the "new economic order", emerging markets are of growing importance in the global economy. In view of this trend, we need to expand our trading ties with the rest of the world and develop more markets for Hong Kong enterprises. The Proposal on Formulating the National 13th Five-Year Plan promulgated by the Central Authorities in November last year suggested that the Mainland would step up efforts to further open up its markets to Hong Kong and


Macao. Moreover, it expressed support for Hong Kong to continue to consolidate our competitive industries, to participate in our nation's two-way opening up and the Belt and Road Initiative, and to strengthen our status as the global offshore RMB business hub. Hong Kong enjoys unique advantages under "one country, two systems". We have not only a free and open market, but also efficient and transparent regulatory regimes well aligned with international standards. We are well placed to endure any threat that comes with the volatilities in external markets. Looking ahead, we should further leverage these advantages and provide appropriate support for our nation in the deepening of reforms, development of the economy in the process of opening up. Belt and Road Initiative Our nation is taking forward the Belt and Road Initiative, a strategy for long-term development. The outcomes will not emerge overnight. Yet, what is certain is that the emerging markets along the routes are likely to become the new impetus for the future development of Hong Kong. The Government will continue the promotion efforts to deepen the understanding of the business sector and the community of these new markets. The HKTDC has launched a series of measures, including the creation of websites, to provide information on relevant business environment to assist the sector in their business expansion. In addition, the Government and the HKTDC will jointly organize the inaugural Belt and Road Summit in May this year. We shall invite key officials from the markets along the routes, representatives of international organizations and business sectors as well as experts in related trades to engage in in-depth exploration of co-operation opportunities and the unique role that Hong Kong can play. I led the first Belt and Road Initiative business mission of the Hong Kong Special Administrative Region Government to visit Hungary, Poland and Germany last September. I plan to lead another business mission to Central Asia this year. The visit will enable participants from the business sectors to gain first-hand knowledge about the development potential and business opportunities in the region.


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Financial services will be in growing demand in emerging markets. Hong Kong is well-equipped to serve as a platform for financing and fund management for these markets. I have asked the HKMA to establish an office to facilitate the financing of infrastructure projects and provide a platform for pooling the efforts of investors, banks and the financial sector to offer comprehensive financial services for various infrastructure projects. The Asian Infrastructure Investment Bank (AIIB) was officially launched last month. We shall continue our active discussion with the AIIB and the Central Government on Hong Kong's participation in the AIIB as a non-sovereign territory. We shall also continue to support the work of the AIIB, and seek to leverage our expertise to service the AIIB in capital markets financing, asset management and dispute resolution. The success of the two sukuk issuances by the Government in the past two years has demonstrated the ability of our financial market to support the launch of Islamic financial products and meet their financing needs. We shall seize the opportunity to issue the third sukuk in a timely manner. Commerce and Logistics Trade Agreements The Government will strive to pursue trade and investment agreements to expand our commercial and trading networks, creating more favourable conditions for Hong Kong enterprises to access the Mainland and overseas markets. We have conducted five rounds of free trade agreement (FTA) negotiations with the Association of Southeast Asian Nations (ASEAN). We hope that the negotiations will be concluded this year. We shall also actively seek to participate in the FTAs that have been or will be concluded between the Mainland and other places. Last November, the Mainland and Hong Kong signed an Agreement on Trade in Services under the framework of CEPA. The agreement has basically achieved the full liberalization of trade in services between the two places, facilitating our services industry's access to the Mainland market. We shall also seek to conclude discussions on a closer economic partnership arrangement with Macao this year.


Commercial Connectivity We have an advanced and efficient transportation network. The cargo handled by the Hong Kong International Airport makes up 40% of our exports in value terms. The eastward shift of the global economic balance has fuelled the rapid rise of spending power and growing demand for high-end consumer goods in the Asian region. This is conducive to the positioning of Hong Kong as an aviation and maritime centre and the development of our high value-added logistics services. The capacity of our airport remains a problem that must be addressed. The existing two-runway system will reach maximum capacity within two years. To cater for long-term air traffic demand and sustain Hong Kong's competitiveness as an aviation hub, the Airport Authority Hong Kong (AA) is pressing ahead with the implementation of the three-runway system (3RS) project, which is expected to complete in eight years. Upon full operation of the 3RS, the airport will be able to handle 100 million passengers and 9 million tonnes of cargo annually in 2030. The increasing demand for international air transport services will spur the rapid growth of the aviation business in Hong Kong and Asia. Hong Kong has well-developed transportation and financial services. We shall examine the use of tax concession to boost aircraft leasing business and explore business opportunities in aerospace financing. E-commerce is booming in Hong Kong, with sales doubling from $140 billion in 2008 to $280 billion in 2012. To meet the demand for logistics services brought by electronic trading, Hongkong Post will capitalize on its network to enhance the counter collection service for online purchases. In the first half of this year, Hongkong Post will install self-service collection lockers in the community to make it more convenient for members of the public to collect their online purchases. Hongkong Post will promote the wider use of online postal portals, such as EC-Ship and My Speedpost, among their clients to facilitate the delivery of goods by internet shops. It will also continue to provide e-commerce support services to local SMEs in collaboration with the HKTDC and the Hong Kong Productivity Council.


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Shortage of land for the logistics industry has always been a matter of concern. The Government will provide land for logistics use. We have reserved 10 hectares of land in Tuen Mun West for logistics purpose. One of the reserved sites has gained the support of the District Council and will be released for use by the industry as soon as possible. "Single Window" At present, the import and export trade has to submit various trade documents to the Government through different platforms. To further facilitate trade in goods, we shall establish a "single window" for "one-stop" lodging of all the 50-plus trade documents and submissions with the Government for trade declaration and customs clearance purpose. The "single window" will connect with other governments' systems as well as trade information platforms run by the private sector. The Government will set up a dedicated office to co-ordinate with the relevant departments, engage the industries and prepare the detailed design and implementation programme for the "single window". It is expected that the first phase of the initiative will be launched in 2018. Intellectual Property IP trading is vital to the growth of a knowledge-based economy. To encourage enterprises to engage in the development of related business, and to promote Hong Kong as an IP trading hub in the region, we shall expand the scope of tax deduction for capital expenditure incurred for the purchase of IP rights from the existing five categories to eight. The additions are layout-design of integrated circuits, plant varieties and rights in performance. Financial Services Cross-boundary Services Hong Kong is the world's largest offshore RMB business hub, with the world's largest pool of RMB liquidity. In 2015, RMB trade settlement conducted through Hong Kong banks totalled RMB 6.8 trillion yuan, representing a 9% increase over 2014. RMB lending business also continued to grow. Outstanding loans amounted to RMB 300 billion yuan at end-2015, representing an increase of 58% as compared with 2014.


With the wide use of RMB internationally, there will be growing demand for RMB trade settlement, RMB assets and related financial services which will drive various types of transactions in our offshore RMB market. We shall continue to explore with the Mainland authorities ways to open up more channels for the two-way cross-boundary RMB fund flows, including the possibility of increasing the investment quota for us under the RMB Qualified Foreign Institutional Investors (RQFII) Scheme. The successful implementation of the Shanghai-Hong Kong Stock Connect and the Mutual Recognition of Funds Arrangement is a key milestone for the mutual capital market access between Hong Kong and the Mainland. We have discussed with relevant authorities of the Central Government the launch of the Shenzhen-Hong Kong Stock Connect and the enhancement of the Shanghai-Hong Kong Stock Connect. We are all set with preparatory work and, subject to the announcement of the Central Government, shall implement the programme as soon as possible. Asset Management Hong Kong is a major asset management centre and investment platform in the Asia-Pacific region. The business is burgeoning. As at the end of 2014, the combined fund management business amounted to $18 trillion, representing a year-on-year growth of 10.5%. Funds from overseas investors continued to increase and recorded growth of 9% in 2014, accounting for over 70% of the fund management business. In 2014, I proposed to waive the stamp duty for the transfer of all exchange traded funds (ETF) to promote the development of the ETF market in Hong Kong. The relevant legislation was passed by the Legislative Council and became effective last year. The average daily turnover of ETFs in 2015 rose to $8.8 billion, an increase of 86% over 2014. Hong Kong ranked second in Asia in terms of the total capital under management in private equity funds, which amounted to US$120 billion as at September 2015. We are currently home to 410 private equity firms, of which 350 have their regional headquarters in our city. To promote further the development of the private equity industry, we have allowed private equity funds to enjoy profits tax exemption available to offshore


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funds. The aim is to attract more offshore private equity fund managers to set up business in Hong Kong, which will in turn drive the demand for other related professional services. To attract more multinational and Mainland enterprises to establish corporate treasury centres in Hong Kong, we have introduced a bill into the Legislative Council to allow, under specified conditions, interest deductions under profits tax for intra-group financing business of corporations and reduce profits tax of qualifying corporate treasury centres by 50%. We submitted a bill into the Legislative Council in January this year to provide a legal framework for introducing an open-ended fund company structure to further diversify the fund domiciliation platform in Hong Kong. Green Finance Green financial business investing in environmental projects is gaining attention in the global market. The development of green finance is also proposed in the Proposal on Formulating the National 13th Five-Year Plan. The Mainland's financial institutions are actively promoting relevant financing products such as green bonds to raise capital for environmental projects with a long payback period, such as renewable energy technology, waste treatment and sewage treatment. To encourage the participation of the financial sector, we shall strengthen our efforts to publicize our competitive capital market and highlight our edge in developing green financial products. The AA will also explore the feasibility of financing through green bonds. Securities Market Last year, Hong Kong ranked first globally in terms of funds raised through initial public offerings, which amounted to $260 billion, representing an increase of 12% over 2014. Given the size and complexity of the securities market, we need to constantly review the relevant regulatory regimes, streamline procedures and enhance market efficiency and quality to reinforce Hong Kong's status as the premier capital formation centre. The SFC and the Hong Kong Exchanges and Clearing Limited are planning to conduct shortly a joint public consultation exercise on enhancing the regulatory structure in respect of listing matters.


Retail Bonds We have launched five issuances of inflation-linked retail bonds (iBond) since 2011 under the Government Bond Programme. The issuances have all been well received and have enhanced people's understanding of and interest in retail bonds. I shall launch another iBond issue of up to $10 billion with a maturity period of three years following the existing practice. The HKMA will announce the details in due course. Fostering Talent There is keen competition among economies under the "new economic order". For Hong Kong to stay competitive, we need to have a pool of talents familiar with innovation and technology and equipped with professional skills. The talents must have broad horizons and a solid grasp of international affairs, so that they can contribute towards the diversified development of Hong Kong as a knowledge-based economy and help open up new markets. Education has long been a major area of recurrent government expenditure. Expenditure on education for 2016-2017 is $75 billion, accounting for 21.5% of recurrent government expenditure. It represents an increase of 70% over 10 years. With good basic education in general, the generations born in the 1980s and the 1990s have become the lifeblood of different sectors. The Government will continue to invest heavily in nurturing talents. Apart from our ongoing efforts to enhance the quality of education, we shall also offer more internship and exchange opportunities to students and encourage the workforce to pursue continuing education, developing a good mix of generalists and professionals in Hong Kong. This will help our new generations maintain their competitive edge and realize their potential under the "new economic order". Internship and Exchange In October last year, I launched the Enriched IT Programme in Secondary Schools, which offers intensive training to students with potential. We have set up a steering committee to co-ordinate and promote the programme. Members of the steering committee include IBM, Google, Microsoft and Huawei. In the


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next two years, we shall continue to collaborate with the industry to organize activities and internship programmes, with a view to nurturing IT professionals for the development of Hong Kong. We shall increase the monthly allowances of the Internship Programme under ITF and extend the programme to cover the incubatees and SME tenants of the Cyberport and the Science Park, as well as the start-ups to be funded by the Innovation and Technology Venture Fund, in a bid to encourage more university graduates to enter the field of innovation and technology. Last year, the Hong Kong United Youth Association and Y Society organized the first Future Leaders in Finance Internship Programme, a summer internship, supporting 20 local university students to work as interns at financial institutions in Beijing to broaden their networks and horizons. The Government will provide subsidies and increase the internship places to 40 this year. Partners to the programme include the China Investment Corporation and the Silk Road Fund. The Scheme for Cross-boundary Study Tour for Post-secondary Financial Talents, which we jointly launched with Shanghai in 2012, enables Hong Kong students to understand the prospects and dynamics of the financial markets in the Mainland. The Government will subsidize 30 local university students to join the scheme this year. The ASEAN Internship Scheme launched by the Hong Kong Economic and Trade Office in Singapore in 2014 has so far provided internship opportunities for about 300 students. Through this scheme, students can gain first-hand knowledge about the economic and socio-cultural environments of the ASEAN countries. From 2016 onwards, the scheme will be extended to cover the Hong Kong Academy for Performing Arts, Hong Kong Shue Yan University and Hang Seng Management College, bringing the total number of participating tertiary institutions to 11. Professional Training The Government is committed to nurturing professionals to meet our needs. Since this academic year, we have launched a subsidy scheme of $960 million for students pursuing self-financing undergraduate programmes in selected disciplines, including healthcare, architecture and engineering, testing and certification, creative industries, logistics as well as tourism and hospitality.


To further encourage continuing education, I shall implement a pilot scheme to provide tuition fee subsidy for three cohorts of students admitted to designated professional part-time programmes offered by the Vocational Training Council starting from the next academic year. Programmes in the disciplines of construction, engineering and technology will be covered. The total commitment will be $200 million, benefiting 5 600 people. As for the construction industry, we have allocated a total of $420 million over the past six years to support the Construction Industry Council in enhancing its training and promotion efforts to attract more new entrants to the industry. As at 2015, 18 000 semi-skilled workers have completed their training. The Government will continue to collaborate with the industry in upgrading practitioners' skills, putting in place a clear career ladder, improving the working environment, and ultimately increasing the manpower for the industry. The Earn and Learn Pilot Scheme for the Retail Industry has been implemented since 2014 to subsidize practitioners to enrol in diploma programmes and receive on-the-job training at the same time. Joined by 50 retail brands, the scheme has been well-received by the industry. It is expected that 1 500 practitioners will be trained. With recognition under the Qualifications Framework, the scheme will raise professional standards and show a clear career path for participants, contributing to the sustainable development of the retail industry. Manpower shortage in the financial services industry is particularly pronounced in the insurance sector and the asset and wealth management sector. Last year, I proposed to allocate $100 million to take forward a three-year pilot programme. Starting from the latter half of this year, we shall provide financial subsidies to practitioners to attend training courses to enhance their professional knowledge and competency. To attract more new blood to the financial services industry, we shall also offer university students internship opportunities to enhance their understanding of the job nature and career prospects of the sectors. Land Resources Land is an indispensable element for sustainable economic and social development. The Government will continue to increase land supply to meet Hong Kong's needs in terms of housing, economic and social development for maintaining our long-term competitiveness.


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Residential Land For public housing, based on the latest projection, the Government has adopted the public housing supply target of 280 000 units for the 10-year period from 2016-2017 to 2025-2026. The Hong Kong Housing Authority (HKHA) requires substantial resources to implement the 10-year public housing construction programme. It is estimated that HKHA's cash and investment balance will drop to $16 billion by the end of March 2020. I have set aside the investment returns of $45 billion in 2015 as an injection into the Housing Reserve. Taking this injection together with the 2014 allocation and accumulated investment returns, the balance of the Housing Reserve now stands at $74 billion. When the Government and the HKHA have reached consensus on the necessary government financial support arrangements, we shall seek approval from the Finance Committee for funding to be drawn from the Housing Reserve to support the long-term public housing development. As for private housing, the Government estimates that private housing land supply in 2015-2016 has a capacity to produce over 20 000 units. The 2016-2017 Land Sale Programme comprises 29 residential sites, including 14 new sites, capable of providing about 19 000 units. Taking into account railway property development projects, the Urban Renewal Authority's projects and private redevelopment and development projects, we estimate that the potential land supply for private housing in 2016-2017 will have a capacity to produce 29 000 units. The Secretary for Development will announce tomorrow the Land Sale Programme for the next financial year. Amid the increase in land supply over the recent past and the market expectation of US interest rate hikes, the property market has showed signs of correction since the middle of last year. Trading in the residential property market has turned quieter, and property prices have been falling for four consecutive months since last October, with a cumulative drop of 9% as at January 2016. There will be successive rises in interest rates, and the medium-term supply of local residential flats will increase. All these factors, coupled with various uncertainties overshadowing the economic outlook, could add pressure to further property market correction. The public should carefully assess the potential risks, in particular the impact of interest rate hikes on their home mortgages, and their own financial position when making a home purchase decision.


Commercial Land In 2015-2016, the Government put up for sale a total of three business sites, capable of providing 68 000 sq m of floor area. The Land Sale Programme for the coming financial year includes eight commercial/business sites and three hotel sites, capable of providing 540 000 sq m of floor area and 2 100 hotel rooms respectively. The Government will continue to increase the supply of commercial floor area through various channels. Apart from putting on sale the Trade and Industry Department Tower in Mong Kok and implementing the relocation plan of the three government office buildings in Wan Chai by phases, we shall also:

(a) reprovision government facilities in the two action areas in Kwun Tong and Kowloon Bay, and the land released is expected to provide 560 000 sq m of commercial and office floor area;

(b) convert the Murray Road multi-storey car park to commercial use,

which is estimated to provide 42 000 sq m of floor area; and (c) redevelop the Queensway Plaza site, which is capable of providing

93 000 sq m of floor area. Caring for People's Livelihood The Government has devoted substantial resources to improving people's livelihood. Apart from education, healthcare services and social welfare are also the main areas of government spending. The estimated recurrent expenditure on these three areas for 2016-2017 is $198 billion, accounting for 60% of recurrent government expenditure. This represents an increase of over 80% when compared with 10 years ago. Investing in Healthcare Recurrent expenditure on medical and health in 2016-2017 is $57 billion, accounting for 16.5% of recurrent government expenditure. This represents an increase of more than 90% when compared with a decade ago. To cope with an


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ageing population, the Government has set aside a dedicated provision of $200 billion for a 10-year hospital development plan to enable the Hospital Authority (HA) to expand and upgrade healthcare facilities in a more flexible and long-term manner. The development plan is a vast investment. It will provide 5 000 additional hospital beds, representing an increase of 18%. Operating theatres will increase by 40% to 320. Specialist out-patient service capacity will increase substantially by 40% from 6.8 million to 10 million attendances a year. At the district level, community health centres will be set up in Mong Kok, Shek Kip Mei and North District. Additional services for 410 000 attendances will be provided at the general out-patient clinics each year. The development plan will cover the redevelopment and expansion of a number of hospitals including Kwong Wah Hospital, United Christian Hospital, Queen Mary Hospital, Kwai Chung Hospital, Prince of Wales Hospital, Haven of Hope Hospital, Our Lady of Maryknoll Hospital, Operating Theatre Block of Tuen Mun Hospital, North District Hospital, Lai King Building of Princess Margaret Hospital and Grantham Hospital. As for new hospital projects, an acute general hospital will be built in the Kai Tak Development Area. The two-phased project will be commissioned in 10 years and will provide 2 400 beds and facilities such as an oncology centre and the first neuroscience centre in Hong Kong. The Government will allocate $10 billion to the HA to set up an endowment fund to generate investment returns for enhancing public-private partnership programmes. The Government will also provide a loan of $4 billion to Chinese University of Hong Kong for developing a non-profit making private hospital. Supporting the Underprivileged The Government has made proactive efforts to help those in need through social welfare measures. Recurrent expenditure on social welfare for 2016-2017 is estimated at $66 billion, accounting for 19% of recurrent government expenditure. This has doubled when compared with 10 years ago.


The Elderly Commission (EC) is pressing ahead with the formulation of the Elderly Services Programme Plan for Hong Kong. In the meantime, the Government is putting in place a series of forward-planning initiatives to meet the challenges brought about by the continuous growth in demand for elderly services due to an ageing population, including:

(a) strengthening and enhancing community care services to support "ageing in place", the cherished wish of elderly persons. Since 2015-2016, the Government has increased recurrent expenditure by $170 million to provide 1 600 additional places for the Enhanced Home and Community Care Services. Starting from 2016-2017, a recurrent provision of $17 million will be allocated to provide 160 additional day care places for the elderly;

(b) speeding up the provision and improving the quality of residential

care places for the elderly. We shall allocate a recurrent provision of $140 million from 2016-2017 onwards to provide more subsidized residential care places, enhance existing residential care services and progressively upgrade 1 200 places under the Enhanced Bought Place Scheme;

(c) providing more elderly facilities. We have reserved space in 15

development projects or vacant buildings for the provision and conversion of existing facilities into residential care homes and day care centres for the elderly. We are pressing ahead with the Special Scheme on Privately Owned Sites for Welfare Uses to provide additional places for elderly services through the redevelopment or expansion of existing service facilities; and

(d) piloting a new model of elderly services. Since September 2013,

the Government has launched, with $1 billion from the Lotteries Fund, the Pilot Scheme on Community Care Service Voucher for the Elderly which adopts the "money-following-the-user" and "co-payment" approaches. The pilot scheme will be extended to all 18 districts in the territory this year and the number of service vouchers will be increased to 3 000. The EC is also actively examining the implementation of the Pilot Scheme on Residential


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Care Service Voucher for the Elderly. The Government has earmarked $800 million for providing 3 000 service vouchers under the three-year pilot scheme.

Since the launch of the Reverse Mortgage Programme in 2011, the Hong Kong Mortgage Corporation Limited (HKMC) has received 1 000 applications. The number of applications in 2015 increased by 80% when compared with 2014. We shall step up promotion efforts to enable more eligible senior citizens to receive stable monthly income under the programme, with a view to improving the quality of life in their own home. To allow more elderly owners of subsidized housing units to join the programme, I propose that the HKMC should explore with relevant organizations the feasibility of extending the programme to cover subsidized sale flats with premium not yet paid. Many of our senior citizens are looking for investment products with steady returns. I encourage the sector to tap into the immense potential of this silver market by introducing a larger spectrum of appropriate products. The Government will launch a pilot scheme to issue Silver Bond this year and next year, targeting at Hong Kong residents aged 65 or above, with a maturity of three years for the first issuance. The HKMA will announce the details in due course. Our society is ageing. This has far-reaching implications for our future public finances. I have earmarked $50 billion to improve the retirement protection for the elderly in need. The Commission on Poverty is conducting a public engagement exercise on how retirement protection can be improved. Any retirement protection scheme must be financially sustainable to avoid shifting the significant retirement protection expenses to future generations. I hope that all sectors of the community will keep an open mind and work together to explore sustainable proposals that meet the needs of Hong Kong. In respect of children and family, the Government will allocate a recurrent provision of $2.9 billion to implement the Low-income Working Family Allowance Scheme starting this year. The scheme aims to alleviate intergenerational poverty through encouraging employment and assisting poor families with children.


The Government seeks to help women to manage family commitments alongside work. On top of the additional places of Extended Hours Service for eligible child care centres last year, an additional 3 800 places will be provided in phases. A pilot scheme will also be introduced in the first quarter of this year to provide child care training for grandparents. Starting from 2016-2017, we shall allocate a recurrent provision of $180 million to strengthen various residential care services, special transport services and community support services for persons with disabilities, and to provide support services for children with special needs and their families. Many people are concerned about how the Government will deal with the unused subsidies of the one-off electricity charges subsidy scheme. The validity period of this relief measure will last until the end of June 2016. Up till last October, 7% of households eligible for the subsidy still had unused credits in their accounts. I shall extend for the last time the validity period of the unused subsidies for two years to 30 June 2018. Public Finances As the Financial Secretary, I am obliged to ensure that our public finances are sustainable and can embrace the short, medium as well as long-term needs and development of Hong Kong. The Government expenditure will be directed where required in line with our policies. The Government revenue will be built around a simple and low tax regime, avoid over reliance on one or two types of tax and adhere strictly to the "user pays" principle. In drawing up the Budget, we must follow the principle of keeping expenditure within the limits of revenue, avoid deficits, and keep the budget commensurate with economic growth. Use of Resources The Government has to contain expenditure growth in the face of an ageing population, a shrinking labour force and the slowing economy. I initiated a three-year measure as from 2015-2016 to contain expenditure by requiring Policy Bureaux to achieve more efficient use of resources through re-engineering, phasing out dated procedures and re-prioritizing. We aim to reduce operating expenditure by 2% in three financial years. Resources saved have all been re-allocated to Policy Bureaux for new services.


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Recently the community has aired concerns about cost overruns of infrastructure projects. The progression of a project from planning and study, design and construction to commissioning takes years. It involves a host of uncertainties such as ground conditions, surges in prices of construction materials, wage hikes, economic fluctuations, as well as unforeseen circumstances in the course of construction. All these may lead to cost overruns. Large-scale infrastructure projects face even greater challenges. To strengthen cost control of public works, the task force I set up last year has examined the causes for the rising costs of works projects and formulated improvement measures. I have asked the Development Bureau to establish a multi-disciplinary office to conduct a comprehensive review of the guidelines on public works, reduce unnecessary design and contractual requirements, and scrutinize closely the cost estimates of 300 major new projects in the next three years. It will report progress to me on a regular basis with a view to controlling project costs. We shall introduce more competition, and seek to fine-tune the works procedures and enhance training to improve productivity. Subject to safeguarding priority employment of local workers and their wage levels, we shall rely on the enhanced Supplementary Labour Scheme to alleviate the delays and cost overruns caused by labour shortage. Recent fluctuations in construction costs have occasionally resulted in higher-than-expected tender prices. To avoid the need to seek additional funding for unexpectedly high tender prices, we have urged departments to invite tenders before submitting funding applications to the Legislative Council for less controversial projects, such as schools and hospitals, which are livelihood-related. We can then present more accurate project estimates to the Legislative Council. Preserving Revenue Base The Government has been committed to modernizing the tax legislation in recent years to ensure that Hong Kong maintains a fair tax environment, aligns our tax system with international standards, and enhances our competitiveness.


The Government just introduced a bill into the Legislative Council this January on the implementation of the international standard on Automatic Exchange of Financial Account Information in Tax Matters. I look forward to early completion of the legislative process to bring the first automatic exchange into effect in 2018 as pledged. Hong Kong is also obliged to implement the project of the Group of Twenty against base erosion and profit shifting. We shall conduct analysis, consult the trade and consider participating in an international framework being developed by the Organisation for Economic Co-operation and Development. Over the past three years, we have made strenuous efforts to remind all government departments to regularly review their fees and charges. Unless justified on policy ground, all fees and charges for government services have been set in accordance with the "cost-recovery" and "user pays" principles. The review mechanism has been re-activated in most of the departments. Relevant fees and charges have registered an average annual increase of $400 million in the three years since 2012-2013. Fiscal Reserves With a relatively sound fiscal position, the Government has recorded successive years of surpluses. Fiscal reserves are estimated to be $860 billion by the end of March 2016, equivalent to 24 months of government expenditure. The reserves are all that we have at our disposal. They have yet to take into account unavoidable commitments including $300 billion for ongoing works projects and $800 billion for statutory pension. Our fiscal reserves are the mainstay of our economy. It helps us ensure the stability of the Hong Kong dollar and withstand challenges posed by economic cycles and ageing population. As one may recall, Hong Kong was beset with severe economic doldrums from 1998 to 2004. During the period, we experienced five years of fiscal deficits which depleted 40% of our fiscal reserves. Prolonged depletion of the reserves to meet ever-increasing recurrent expenditure is not sustainable. Recurrent expenditure must be funded by sustainable revenue. To maintain the health of our public finances and enable us


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to cope with possible threats, we must exercise fiscal prudence and live within our means. To tackle the problems that come with an anticipated structural deficit, I have established the Future Fund to set aside part of our fiscal reserves for long-term investments when we can still afford to do so. I have instructed the HKMA to allocate $220 billion from the balance of the Land Fund, which is part of the fiscal reserves, as an initial endowment of the Future Fund, and to inject one third of the actual surplus in 2015-2016 into the Future Fund. The HKMA will deploy half of the Future Fund for incremental placement with the Exchange Fund's Long-Term Growth Portfolio to achieve greater returns. Forward Planning In preparing the Budget, I have been particularly mindful of the long-term needs of Hong Kong. I have set up the Housing Reserve in support of public housing development, set aside $200 billion for the 10-year hospital development plan and established the Future Fund as part of our long-term investment strategy. The Government will continue to make forward planning for major financial commitments to meet the needs of social development and people's livelihood. Revised Estimates for 2015-2016 The revised estimate for government revenue for 2015-2016 is $457 billion, 4.2% or $20 billion lower than the original estimate. It reflects mainly the provision of $45 billion for the Housing Reserve and changes in different incomes. Revenue from land sale is $8 billion, or 11.6% lower than the original estimate because some sites were unable to be disposed of as scheduled. Given the fluctuation of the Hong Kong stock market, with trading hectic in the first half of the year, stamp duty revenue for the whole year is $14 billion, or 28% higher than the original estimate. The total revenue from salaries tax and profits tax is $17 billion, or 8.9% higher than originally estimated. As for government expenditure, I forecast a revised estimate of $427 billion, 3.1% or $14 billion lower than the original estimate. This is mainly because the Finance Committee may not be able to complete as scheduled the deliberation on the proposed endowment of $10 billion to the HA for public-private partnership initiatives in 2015-2016.


All in all, for 2015-2016, I forecast a surplus of $30 billion. Fiscal reserves are expected to reach $860 billion by 31 March 2016, equivalent to 24 months of government expenditure. Estimates for 2016-2017 Last month, the Chief Executive delivered the Policy Address covering a spectrum of policy initiatives which involve $220 billion of expenditure. I shall ensure that financial resources are adequate to fully support the launch of these initiatives. Operating expenditure for 2016-2017 is estimated to be $380 billion, representing an increase of 11.1% or $38 billion over the revised estimate for 2015-2016. Recurrent expenditure, which accounts for over 90% of operating expenditure, will reach $350 billion, reflecting an increase of 6.7% or $22 billion over the revised estimate for 2015-2016. I forecast that capital expenditure will be $110 billion, including $79 billion on capital works. With a number of projects at their construction peaks, capital works expenditure is expected to remain at relatively high levels in the next few years. We are, however, concerned about the slow progress of deliberation in Legislative Council, resulting in a mounting backlog of funding proposals and delayed commencement of livelihood-related projects. The civil service establishment is expected to expand by 2 223 posts to 178 495 in 2016-2017, representing a year-on-year increase of 1.3%. This has to do with manpower increase in government departments for implementing new policies and improving existing services. Total government expenditure is estimated to reach $490 billion in the next financial year, 14% more than that of last year. Public expenditure will be equivalent to 21.2% of the GDP. Total government revenue for 2016-2017 is estimated to be $500 billion, of which earnings and profits tax is estimated at $206 billion. Land revenue is estimated to be $67 billion. Taking all these into account, I forecast a surplus of $11 billion in the Consolidated Account in the coming year. Fiscal reserves are estimated to be


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$870 billion by the end of March 2017, representing 35.2% of the GDP or equivalent to 21 months of government expenditure. Medium Range Forecast The global economy has seen rather low and unbalanced growth in recent years. Uncertainties in the external economic environment will linger on in the next few years. For the medium term, the average growth rate is forecast to be 3% per annum in real terms from 2017 to 2020, lower than the trend growth of 3.4% over the past 10 years; and the underlying inflation rate is expected to average 2.5% per annum. I forecast an annual surplus in the Operating Account and an annual deficit in the Capital Account in the four financial years from 2017-2018. There will be deficit in the Consolidated Account in 2018-2019 and 2019-2020, which mainly reflects the Government's financial allocation for the healthcare reform and retirement protection. On the whole, the financial position of the Government over the medium term remains sound. Fiscal reserves are estimated at $835 billion by end-March 2021, representing 28.3% of the GDP or equivalent to 18 months of government expenditure. Concluding Remarks President, I set up a Facebook account on the eve of the last Budget Speech, hoping that its contents could be presented to the wider community through a channel that was popular among young people in order to help broaden and rejuvenate my communication with the public. Social media enables me from another perspective to observe people's daily lives and to hear their voices, including messages that cannot be accessed through traditional media and views that have not been captured by the mainstream. In the past year, I have gained a much deeper appreciation for the current state of play. I believe that many of you would share my feeling that tension and turbulence are mounting in Hong Kong. Many of us feel suffocated by and, indeed, helpless with the tiresome confrontations day in and day out. This highly charged atmosphere has continued to deteriorate since the unlawful Occupy movement a year and a half ago, even after the defeat of the


constitutional reform package. Confrontations have not eased, and worse still, our society has become even more polarized. Political disputes are spreading both inside and outside the Council Chambers, setting off a spiral of intensifying struggle between rival factions. Calm and rational discussions no longer have a place in this Council. There is not even room for dialogue in our society. As a member of the Hong Kong community, I am deeply troubled by the current situation. What we are facing today is the result of a raft of intricately-related factors. We need to look squarely at these factors in resolving the differences and, more importantly, we need to have the determination to resolve these conflicts. If we should allow the situation to get worse, what lies in store for Hong Kong will be even greater chaos, and our future generations will grow up in the midst of hatred and malice. A statesman once said, "Our problems are man-made, therefore they can be solved by man". For the problems of Hong Kong, they cannot be solved by anyone else except ourselves. As long as everyone is willing to set aside short-term political considerations in favour of the long-term overall interests of Hong Kong, we shall have a chance to return to rationality. It is a long journey. We must be patient and persevere in helping our community to heal, one step at a time. The road trodden by the people of Hong Kong has been thorny and winding. Our journey has been fraught with wars, poverty, epidemics, economic recessions and financial crises. In spite of all these scourges and storms, we have always been able to find a way out; and the experience gained over the years has enabled our economy to progress, our system to become more refined, and our society more diverse. Looking back on the road that we have travelled, I believe we have both the ability and the wisdom to cope with the problems that we are facing today. I also believe that one day we can break the deadlock. When the storms are over, we shall cherish all the more the harmonious and cohesive society that we have restored. Last year, throughout their World Cup qualifying campaign, the Hong Kong team and their fans had never for a second lost hope in the face of strong competition. I remember clearly the evening match against Qatar. Although falling behind by three goals, our team and their fans remained united, and


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persisted to mount a comeback scoring two goals in the final five minutes. We lost the match, but the never-say-die spirit that they exhibited won the hearts of our city. To Hong Kong, this very match has taken on a significance beyond victory and defeat. It has led me to believe that, with our love for Hong Kong, we are able to overcome any challenge ahead of us, no matter how difficult it is. Thank you, President. PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Appropriation Bill 2016 be read the Second time. In accordance with the Rules of Procedure, the Second Reading debate on the Appropriation Bill 2016 is now adjourned, and the Estimates are referred to the Finance Committee for examination before the debate on the Bill resumes. I now suspend the Council until 3 pm this afternoon. 12.24 pm Meeting suspended. 3 pm Council then resumed.

PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members to the Chamber. (After the summoning bell had been rung, a number of Members entered the Chamber) Council went into Committee.


Committee Stage CHAIRMAN (in Cantonese): Bill: Committee stage. Council is now in Committee to continue to consider the Copyright (Amendment) Bill 2014. Committee continues the first debate: Mr CHAN Kam-lam's first group of amendments to amend clauses 18, 19, 24, 75, 76 and 78. The amendments aim to add sections relating to contract override provisions in respect of copyright exceptions. Mr LEE Cheuk-yan, please continue with your speech. COPYRIGHT (AMENDMENT) BILL 2014 MR LEE CHEUK-YAN (in Cantonese): Chairman, we have been debating on the amendments from the Year of the Ram to the Year of the Monkey. Chairman, today, Financial Secretary John TSANG said that since all problems are created by people, they can be solved by people. Certainly, the problem concerning the Copyright Ordinance before us is how the three amendments proposed by the pan-democratic Members should be handled, including the amendment to add sections relating to contract override provisions in respect of copyright exceptions which we are scrutinizing now. Earlier, Mr CHAN Kam-lam convened a four-party meeting, but does it mean anything? Does it mean that the problems have been solved? Since Financial Secretary John TSANG thinks that the problems are created by people, should he also attend the meeting to offer a helping hand in solving the problems? As I learnt from the four-party meeting, when discussing how to solve the problems concerning the amendments to the Copyright Ordinance, both the pro-establishment Members and the pan-democratic Members pointed out that the person responsible for breaking the current deadlock was Secretary Gregory SO, and they hoped that he could do something. The conclusion drawn at the meeting is very clear and everyone expects Secretary Gregory SO to do something, but we fail to see what he has done. If problems created by people should be solved by people, who should be responsible for solving the problems? If Secretary Gregory SO does nothing, who should take up his duties? Should Financial Secretary John TSANG take them up?


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Considering Secretary Gregory SO's remarks at that meeting, I think he implied that he would not take any action. According to him, if copyright owners and netizens could reach a consensus, the problems would be solved. This saying is obvious to all. If there is a consensus, certainly the problems will be solved. If a consensus could be made, the problems would naturally be solved without the involvement of Secretary Gregory SO. But, may I ask what the function of the Government is in society? The Government should perform the function of co-ordination when there are disputes and a consensus cannot be fostered. All Members, Members of the pro-democracy and pro-establishment camps alike, said at the four-party meeting that Secretary Gregory SO should be responsible for co-ordination. We are now in the Year of the Monkey, and monkeys should be clever. I want to know if Secretary Gregory SO can give us any clever ideas about the Copyright Ordinance, so as to narrow the differences and reach a consensus on one or more amendments of the Bill, leading to the settling of the problems without the need to continue with the debate here. Certainly, the truth will come out by holding more debates. The pro-establishment Members often say that we should debate more, listen more and speak more. But even if they listen more and speak more, they still do not change their voting decision. Such an approach will not be desirable. If the pro-establishment Members can think independently, pay heed to public views and make a decision accordingly, then the situation will be different as changes may be made after holding debates. However, as we all know, debates will not change the voting decisions of the pro-establishment Members. I believe if the Government can co-ordinate with netizens and copyright owners regarding the so-called problem of lacking a consensus, there will be a way out. But … CHAIRMAN (in Cantonese): Mr LEE Cheuk-yan, this is the second time that you speak. Please focus on whether sections relating to contract override provisions should be added. MR LEE CHEUK-YAN (in Cantonese): Yes, I understand. Chairman, I am actually delivering my speech in the direction of solving the problems. Concerning the amendment itself, the pro-establishment Members mentioned the freedom to enter into contracts several times at the last meeting. I would like to convince them with my arguments. It is true that we have the


freedom to enter into contracts, but the purpose of legislation enactment is to strike a balance between the interests of copyright owners and those of the general public. If the terms of a contract can override the law, such a balance will be completely lost. Chairman, I have read some information and am aware that the United Kingdom had also discussed this issue and published an independent review report in 2011, listing inter alia the views of an alliance of librarians and archivists. They opined that if a copyright owner could render the copyright exceptions given by the law invalid by means of a contract, it would be meaningless to enact legislation. The alliance demanded to include contract override provisions in the legislation. It cited an example of a library which I will simply call the Library of the British Empire. The Library signed with 100 copyright owners 100-plus contracts with different terms and conditions. Since there were no contract override provisions in the legislation, it had created a big problem for the Library because its staff members had to review each and every contract. Since there were 100-plus contracts, when would the review be completed? The librarians and archivists were baffled because some contracts were more restrictive than the others. In the end, the Library had to compile a guideline which was generally applicable and this could only be done if the contracts were written in very restrictive terms. Hence, if there are no contract override provisions in the legislation and the contracts are written in very restrictive terms, it will cause great inconvenience to the public. The law cannot be so unclear. Chairman, as we understand it, if no contract override provisions are included in the legislation, it is tantamount to allowing copyright owners to rewrite the law and that will cause great confusion to copyright users and members of the public. Frankly speaking, we are often unaware of the contents of the contract that we have signed. When we sign a contract, we are often requested to tick the box next to the sentence "I agree to the above terms and conditions" to indicate that we agree to all the terms and conditions therein. If we do so, we will be in great trouble because we agree to abide by the contract. Therefore, if no contract override provisions are included in the legislation, the entire legislation is actually very unclear. Chairman, when we legislate, should we follow the principles of certainty and clarity? If we think that the law should be certain and clear, why do we not support the proposal to include contract override provisions in the legislation? If


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copyright owners are restricted from rewriting the exceptions given by the law in their contracts, copyright users will know whether they will really be protected by the statutory exceptions. The Government says that exceptions can be granted for parody, copying copyright works for educational purposes, image capture or secondary creation, but many netizens are not sure if they may inadvertently break the law. Our argument all along is that if a copyright owner can draw up a contract to restrict netizens in their production of a parody or a secondary creation, the exceptions provided by the legislation may become invalid. If the statutory exceptions are invalid, will my online acts be legal or illegal? Initially, the law clearly provides that my acts are legal because they fall under the exceptions. Nonetheless, if the law does not include any contract override provisions, the contract will override the legislation, and acts committed by netizens or members of the public may become illegal. The situation will then be very confusing. Chairman, I think you also agree that every legislature has to follow the principles of accuracy, clarity and certainty in legislating, but these principles have not been observed on this occasion. The only reason put forward for non-compliance is the freedom to enter into contracts. If we speak only of the freedom to enter into contracts without considering the legislative intent of the entire Copyright Ordinance, we will be seriously inclining towards one side. In the end, we will be enacting a piece of legislation which is very unbalanced, very unclear and very uncertain. The protection for netizens will be nullified and social disputes or conflicts that have arisen cannot be resolved. Therefore, I hope that the Secretary can give some leeway to netizens and will not allow copyright owners to rewrite the entire piece of legislation with contracts. Thank you, Chairman. DR KWOK KA-KI (in Cantonese): Chairman, last week, we should have a chance to solve the incident when a four-party meeting was held. The purpose of the meeting is to seek the early passage of the Copyright (Amendment) Bill 2014 (the Bill) through consultation, mutual understanding and accommodation. Unfortunately, after the four-party meeting, the Government has not put forward new proposals, and I am particularly disappointed with Secretary Gregory SO. After the meeting, the Secretary said publicly that a consensus was not reached between copyright owners and netizens, and raising new proposals would be to no avail. He said that we should continue to discuss fair use, fair dealing, and so


on, but the parties could hardly reach a consensus. He also said that the only conclusion that could be drawn was that no other options were available and we should simply accept the Bill. Chairman, if so, he should really feel ashamed before Hong Kong people, netizens or otherwise, who have been following the development of the meetings on this subject for many days. In fact, it is difficult to tell who netizens are; nowadays is there anyone who does not go online? I believe most adults in Hong Kong go online to communicate with others from morning till night. We are most worried and disappointed that supposedly, there is a chance for the Secretary to seek a consensus to settle current disputes, including the contract override issue under discussion as well as two other amendments. Members who proposed the amendment on the contract override provision have pointed out, to solve the problem, it was not necessary to pass all three amendments at the same time; so long as the Government has the sincerity and political competence to convince various parties, the problem could be solved. But if the Secretary just sat idly at meetings and did nothing, he is certainly not doing what a politically appointed official should do. A politically appointed Secretary should have to exert influence at crucial moments. Since he has close contacts with copyright owners, that is, the Hong Kong Copyright Alliance, how come he is not the most suitable mediator to draw together copyright owners, netizens and Members who are so different in views, and solve the problem that has dragged on for so long? He now adopts an indifferent attitude, watching coldly how we would deal with the issue. He just wants us to take it or leave it. This gives people the impression that the Secretary simply does not have the intention or capability to solve the problem. He has also failed to propose a new direction as he said earlier so that the four parties could solve the problem. Chairman, I would like to respond to the comments made by Mr CHAN Kam-lam, Chairman of the Bills Committee. Of course, I appreciate that he attended the meeting and acted as the main convener of the meeting, but I cannot agree with him when he used having a meal as a metaphor. He said that if we eat one mouthful after another, the dishes will become cold and the food will not be palatable. Therefore, we should be discussing while eating. I do not wish to draw an analogy between food and the Bill because it will be miserable if we are eating poison but not food; even a small bite will be fatal, how can we be discussing while eating? As we will die after taking a bite, we do not need to have discussions anymore.


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Many members of the public who still have reservations about the Bill, especially netizens, have strong views on the idea of discussing while eating, as advocated by the Government and certain person such as the Hong Kong Copyright Alliance, as well as some Legislative Council Members. We have seen many incidents of the Government going back on its promises, such as … Chairman, I am sorry, I want to stray farther. An example is the Express Rail Link. The Secretary of the previous term of Government said that no cost overrun would occur and the co-location of boundary control facilities might not be necessary. However, things had changed swiftly and she was no longer a Director of Bureau. When something goes wrong after the commencement of the Ordinance, we will then realize that it is not a matter of having a meal, but we have to bear the bitter fruit. Yet, the incumbent Secretary might either leave the governing team or take up another post, and somebody has to clean up the mess. What is the point of this? Thus, the most responsible approach is actually not eating while working or discussing, but solving the problem on this basis … Chairman, next, I will … CHAIRMAN (in Cantonese): Dr KWOK, as I have reminded Mr LEE Cheuk-yan just now, this is the second time you speak, I have allowed you to speak for more than five minutes in response to the four-party meeting, please focus your speech on the relevant amendments. DR KWOK KA-KI (in Cantonese): Yes, Chairman, I will speak on the amendments. There are views that the abolition of the contract override provision is highly controversial. We have looked up the records of the House of Lords of the United Kingdom and some Members of this Council have also pointed out that the controversies at that time were not as serious as claimed by government officials. The provisions limiting the enforcement of the relevant contractual provisions actually help to clarify the law. In response to the remarks made by Members of the House of Lords, the then Parliamentary Under-Secretary of State for the Department for Business, Innovation and Skills, Mrs Lucy NEVILLE-ROLFE raised a point, when the law provided certain copyright exceptions, the contract overriding provisions would ensure that the public could act according to these exceptions and did not need to find out whether the contract might specify limitations that were totally different from these exceptions.


Chairman, in simple terms, in addition to a number of exceptions, the remaining provisions of the Bill are intended to specify comprehensively the powers or interests of copyright owners. The Chairman may also recall that, before the Legislative Council was relocated to this new building, it held meetings in the present Court of Final Appeal building. There is a statue of a blindfolded goddess on the roof of the building, with one hand holding a scale. The two sides of the scale are balanced, meaning that we must balance both sides. In this case, we have to balance the interests of copyright owners and netizens or the public; if we can achieve an appropriate balance, we should try our best to do so. Limiting the enforcement of the relevant contractual terms can precisely balance the interests of all parties. Why do I say so? Regardless of the comprehensive protection we believe the Bill can provide, when the public or netizens use online software, platforms, browsers or servers, very often they have to sign contracts. I believe most people will not use a magnifying glass to read all the contract terms. When someone without legal knowledge or other abilities indicate that they agree to such terms, it implies that they surrender the legal right of self-protection. Who would exercise these powers? Copyright owners will exercise these powers. By then, a copyright owner may say, although there are such legal provisions, he has the right to disagree and he can square accounts with netizens through affixing responsibilities, claiming compensations and even taking legal action. The consequences will be very serious. For example, some "copyright rascals" have recently appeared in the United States. What are "copyright rascals"? Some companies are commonly known as "copyright rascal companies". They have reached agreements with some copyright owners, especially newspapers, software owners, audio-visual companies, composers or lyricists. They will issue legal letters on their behalf to website bloggers and citizen journalists who have reproduced articles and photographs without authorization, and they will collect royalties and fines from them. Newspapers or copyright owners do not need to pay any fees, including lawyer fees. The problem is that these companies will recklessly issue legal letters or claim letters, without verifying whether the recipients have violated the copyright of the reproduced documents and photographs or without assessing whether online reproduction is given exception just like fair dealing. Though websites, netizens and citizen journalists can appeal, as they are not familiar with the law, they will be worried after they have received these letters.


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First, if netizens seek legal advice, the expenses will be huge and it is very difficult to estimate whether the arguments will incur more expenses. The local government has a security mechanism in place; for example, if netizens do not agree about the contract override exception, the fund set up by the Government may provide assistance. This includes the provision of information, free legal advice services or free or low-cost services to help netizens deal with "copyright rascals" who may appear. Without the limitation on contract override, this will only leave the door wide open, allowing copyright owners or "copyright rascals" who have already appeared in the United States to do anything they like. Chairman, limiting contract override is essential because something excessive or outrageous happened in Hong Kong in the past. Previously, some dry cleaning or laundry company would specify in the contracts that they would not be liable if the customers' clothes were torn or shrunk after washing. They even charged the customers storage fees if they failed to pick up their clothes after the deadline. These examples indicate that an unfair contract cannot help consumers, and it leaves the door wide open so that consumers (netizens or the public in the present case) will fall into a trap. Similarly, when we ask dry cleaners to wash our clothes, we will not use a magnifying glass to read the details the small prints on the bills before signing the contracts. Honestly, we do not even have to sign a contract when we take our clothes to the dry cleaner; all we need to do is to pay $20 or $30. If something goes wrong, the cleaner will show us the bill, claiming that we have agreed to the contract terms when we made payment. As we all know, the Consumer Council or the Government has subsequently formulated measures to deal with such unfair contracts to protect the public or consumers. In this connection, we hope the Government would adopt a responsible attitude and protect both parties. There are some wealthy and powerful organizations among copyright owners; for example, members of the Hong Kong Copyright Alliance include the Composers and Authors Society of Hong Kong and some software companies. It can be said that individual composers or lyricists are not rich but the organizations representing composers and lyricists are large commercial organizations with many legal personnel and full-time staff. They have asymmetric powers as copyright owners have resources worth tens of millions of dollars and many experts examining how to reap the maximum benefit.


With the protection of limiting contract override, netizens and members of the public would have a disadvantage in the disputes with copyright owners. How can they have so much money? How can they hire lawyers? How can so many experts defend them? They would have cold feet after they have received legal letters; they can give up secondary creation or give up writing and their creative rights, but this should not happen. Today, the Financial Secretary said that technological development should be encouraged in Hong Kong. So, I hope the Government would not only introduce piecemeal measures (the buzzer sounded) … CHAIRMAN (in Cantonese): Dr KWOK, your speaking time is up. DR KWOK KA-KI (in Cantonese): … but formulate comprehensive policies for the protection of all netizens. With these remarks, I support the amendment. Thank you, Chairman. MR CHEUNG KWOK-CHE (in Cantonese): Chairman, I support the amendment proposed by Mr Dennis KWOK to impose limitation on contract override. When we apply for a personal account on an Internet platform, we would know that there is no limitation on contract override if we have read all the terms and conditions of use. Even if the Legislative Council passes the six exceptions in the Copyright (Amendment) Bill 2014 (the Bill) today, when a netizen uses a copyright work for secondary creation, or distributes or communicates such creations, he will not be protected by the amended Copyright Ordinance. It is possible that he may violate the contract terms of the Internet platform anytime and be lightly punished by having his messages or works distributed or communicated on the Internet platform deleted, or in more serious cases, copyright owners may … (Mr CHAN Chi-chuen stood up) CHAIRMAN (in Cantonese): Mr CHEUNG Kwok-che, please hold on. Mr CHAN Chi-chuen, what is your point?


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MR CHAN CHI-CHUEN (in Cantonese): Chairman, I request a headcount. CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber. (After the summoning bell had been rung, a number of Members returned to the Chamber) CHAIRMAN (in Cantonese): Mr CHEUNG Kwok-che, please continue. MR CHEUNG KWOK-CHE (in Cantonese): Chairman, earlier on I was saying that without the protection from provisions that limit contract override, when a netizen engages in secondary creation, distributes or communicates his work in future, his messages posted and his secondary creations distributed or communicated may be deleted anytime, or he may even have to face the civil or criminal claims instituted by copyright owner. Hence, without the protection that limits the contract override provision, the Bill will not provide any protection for netizens who may inadvertently fall into a legal trap. The reasons cited by the Government for objecting the amendment concerning adding sections that limit contract override is that even if netizens' works uploaded onto the Internet are protected by the six exceptions in the Bill, whether the works are allowed to be uploaded, or whether the works uploaded will be deleted afterwards all depends on the commercial decision made by the Internet platform according to its operation mode and preference. The Government says that the copyright law should not mandatorily require Internet platforms to provide the same exceptions as those in the Bill; rather, it should be up to the Internet platforms to decide whether or not to allow works with certain contents to be uploaded. The Government considers that as commercial institutions, Internet platforms would not limit netizens' rights to upload their works without taking into consideration market factors. The Government assumes that if a company limits netizens' right to upload their work, the company will be eliminated in a free market. To put it simply, the Government assumes that commercial institutions will only make commercial decisions and so there is no need for an amendment to limit contract override. However, in reality many decisions that commercial institutions made are not purely based on


commercial considerations. That is to say, very often commercial institutions make decisions based on political considerations, through which they may gain commercial benefits. Chairman, if netizens read the contract terms of the Internet platforms carefully, they will find that most of the terms do not involve political decisions but are all based on commercial considerations. It seems that such terms are there to protect users' right to fair dealing but without the protection of the limitation to contract override, netizens' freedom of speech, expression and creation may be subject to restriction. Take for example the Internet social network Facebook. Concerning "safety" in its agreement for use, the following phrases have been stated, "You will not bully, intimidate, or harass any user;" and "You will not post content that: is hate speech, threatening, or pornographic; incites violence, or contains nudity or graphic or gratuitous violence", and the aim is to remind Facebook users to follow these principles. Facebook, however, has not defined what constitute "bullying", "intimidation" or "harassment", or even "hate speech" clearly. Besides, Facebook has a reporting function and by clicking "I don't want to see this" on Facebook, the following options are available for one to choose when reporting about an article or message that he does not want to see: "this is hate speech", "race or ethnicity", "religious affiliations", "gender or sexual orientation" or "disabled or sick". These options are attributed to "hate speech" defined by Facebook. If a netizen wishes to understand the definition of such terms as "race or ethnicity", "religious affiliations", "gender or sex orientation" or "disabled or sick", it may not be necessary for him to make reference to the law of the country where Facebook is based (that is, the United States), but rather the law of the place where he resides in. Hong Kong netizens should of course make reference to the relevant laws in Hong Kong, such as the Race Discrimination Ordinance, the Hong Kong Bill of Rights Ordinance, the Disability Discrimination Ordinance and the Defamation Ordinance, in order to gain a thorough understanding of the definition of those terms. But will netizens stop using Facebook after looking them up in those ordinances? I believe the possibility is very low. Hence, even though netizens may not agree to the terms of service of Facebook, if they want to use Facebook, they will have to comply with those terms, no matter how grudgingly. When a netizen violates Facebook's terms of service, Facebook can delete that netizen's account according to the contract. As a matter of fact, Facebook has more than once …


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CHAIRMAN (in Cantonese): Mr CHEUNG Kwok-che, how is your lengthy speech related to the addition of sections to limit contract override in respect of copyright exception? MR CHEUNG KWOK-CHE (in Cantonese): Chairman, the main points I wish to bring up is that without limitation on contract override, Facebook users have to comply with all the terms of service set by Facebook … CHAIRMAN (in Cantonese): Mr CHEUNG, please note that the contract override under discussion now concerns with the contract override relating to copyright exception in the Copyright (Amendment) Bill 2014. The provisions concerning sex discrimination, and so on that you were talking about have nothing to do with copyright exception. MR CHEUNG KWOK-CHE (in Cantonese): Yes, Chairman, perhaps you have treated the matter in a very simple manner. What I am saying is that to comply with the terms of service set by Facebook, one has to understand the wording used by Facebook. While interpreting the wording, should we also see if the definition of such terms in the local legislation is in line with that of Facebook? This is the way I think … CHAIRMAN (in Cantonese): Mr CHEUNG, how are these terms related to copyright exception? MR CHEUNG KWOK-CHE (in Cantonese): Chairman, it is most important that these … CHAIRMAN (in Cantonese): Mr CHEUNG, this is the second time that you speak. Please do not digress from the question, that is, whether sections to limit contract override in respect of copyright exception should be added to the Bill.


MR CHEUNG KWOK-CHE (in Cantonese): Chairman, I have just mentioned the terms used by Facebook such as "bully", "intimidate", "harass" and "hate speech" … CHAIRMAN (in Cantonese): How are they related to copyright exception? MR CHEUNG KWOK-CHE (in Cantonese): If we are to interpret the relevant contents, we will have to understand if the definition of those terms in the local legislation is different to that in Facebook. CHAIRMAN (in Cantonese): Mr CHEUNG, I hope that you have made better preparation before you make the speech. MR CHEUNG KWOK-CHE (in Cantonese): Chairman, it does not matter. CHAIRMAN (in Cantonese): A contract does impose certain restrictions but at the Committee stage, we are now discussing the contract override regarding copyright exception. I have repeatedly reminded Members that I do not allow them to make speeches irrelevant to the question under discussion. MR CHEUNG KWOK-CHE (in Cantonese): I have already expressed all my views concerning the Chairman's point of concern. Now I would like to say that Facebook has more than once invoked its terms of service to delete netizens' accounts. When dealing with sensitive political issues, for example, during the time close to the anniversary of the 4 June Incident, like on 1 June 2012, the accounts of many local social activities such as Mr LEUNG Kwok-hung and Benson TSANG, a political photographer who started the equal sharing movement, were deleted for no reason. It was only after netizens denounced Facebook's "stability preservation" en masse and also with the help from our fellow Legislative Council Member, Mr Charles Peter MOK, that some of these people's accounts were reinstated. Facebook has not stopped deleted people's accounts or deleting pages and lately a secondary creator …


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CHAIRMAN (in Cantonese): Mr CHEUNG Kwok-che, I must disrupt your speech again. Even if Committee passes the amendment proposed by Mr CHAN Kam-lam, none of the situations that you have been talking about would be affected because they are not related to contract override regarding copyright exception. Please speak on the amendment. MR CHEUNG KWOK-CHE (in Cantonese): Alright, Chairman. However, when we apply the Copyright Ordinance, as in the case of Facebook's reporting function, that is, without limitation on contract override, different Internet user groups would report one another's actions, resulting in patriotic organizations reporting on pan-democratic groups and vice versa. Society would become chaotic. Hence, when I talked about Facebook's contract terms just now … CHAIRMAN (in Cantonese): Mr CHEUNG, it seems what is chaotic is not society but your logic. I still fail to see how such situations as mutual reporting as mentioned by you are connected to contract override regarding copyright exception. MR CHEUNG KWOK-CHE (in Cantonese): Thank you, Chairman, for your advice. As we can see, very often commercial institutions make decisions out of political considerations. For example, Mark ZUCKERBERG, the CEO of Facebook, has more than once stated expressly that in order to enter the Chinese market, Facebook will adjust its terms of service to meet the national conditions in China. This is because he understands that once Facebook makes such a political decision, it may reap great commercial benefits in return. With Hong Kong being a special administrative region of China, it is not inconceivable that the CEO of Facebook would tighten Hong Kong Facebook users' freedom of usage to cater to the national conditions in China. The Government has repeatedly mentioned that there is hardly any civil case in which a claim is filed against anyone for copyright infringement. The reason is that copyright owners can get monetary benefits under the current system on networks. This is consistent with the Government's claim that in making a commercial decision, commercial institutions would not disregard market factors and arbitrarily restrict netizens' freedom to engage in secondary creation or disseminate views. But as I have said earlier, commercial institutions may very likely make a so-called commercial decision out of political


considerations. In respect of non-compliance of contract laws by netizens, they may not file civil claims now and they may not institute criminal prosecution against them in the future even if the communication offence is incorporated into the Bill. But we must remember that if a commercial institution does not file lawsuits today, it does not mean it has no power to do so but it only chooses not to exercise it. If once the political situation changes and a commercial institution will be able to gain greater commercial benefits if it goes with the flow, it is very likely that it will exercise this power. More importantly, if a person's account on an Internet platform is deleted, he has no power to bargain with the Internet platform, which has the final say over such matters. Netizens are not afraid of their accounts being deleted. They are more worried that the record of their usage and their contract list being deleted as well, or that they have to face civil claims. At the same time, the restriction on Internet freedom in the Mainland is also a grave concern to Hong Kong netizens. For instance, the terms of use of WeChat, a major social media in the Mainland, are totally in line with the national situation in China. As a free market, Hong Kong has no reason to bar the application of WeChat. As a matter of fact, many people in Hong Kong use WeChat to connect with their friends. Seeing that Mainland netizens are bound by WeChat's terms of use and unable to express their views freely, Hong Kong netizens' worries are not unfounded. However, if sections are incorporated into the Bill to limit contract override, the coverage of exceptions provided by the Hong Kong law for the protection of netizens will be extended to the local Internet platforms. The Government often says that the virtual world on the Internet must be regulated by law. For example, calling on people on the Internet to withdraw money from banks, causing a bank run is an offence under section 161 of the Crime Ordinance (access to computer with criminal or dishonest intent). According to the legal principle, the coverage of law should be extended to the virtual world. Hence, the six exceptions proposed by the Government should also be applicable to the Internet. Only through the limitation on contract override will netizens be provided with the protection by law, and their bargaining power with copyright owners and Internet platforms increased. The Government claims that this amendment to the copyright is a big stride forward. But without limitation on contract override, private contracts may still override the amended Copyright Ordinance and the newly added exceptions will be of no avail. Instead of making progress, the present amendment to the Bill is a big step backwards. The sections to limit contract override proposed by


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Mr Dennis KWOK will provide the virtual world with laws to follow. They will ensure the amendments to the Copyright Ordinance are applicable to the private contracts of Internet platforms and will better manifest the purpose and spirit of the six exceptions proposed in this amendment exercise, which is the protection of netizens' freedom of speech, expression and creation. Both the Government and the pro-establishment Members should support the amendment for the incorporation of sections for the limitation on contract override. Chairman, I so submit. CHAIRMAN (in Cantonese): In this debate session, Members have already spoken for 43 times, and 14 Members have spoken more than once. I start to notice that some Members were straying from the question or making repetitions. I would like to remind Members who intend to speak later, especially those who have spoken more than once, that they should not stray from the question or persist in repeating the arguments that they or other Members have already expressed. If I still keep on hearing repetitive or irrelevant remarks, I can only come to the conclusion that there is no new argument in this debate session, and I must bring it to a close. Mr Charles Peter MOK, speaking for the third time. MR CHARLES PETER MOK: Chairman, actually I do believe that what Mr CHEUNG Kwok-che was talking about can be relevant to our debate, if you consider the fact that some social media platforms or online service companies can introduce specific conditions to ban the expression of views in certain ways, say, views concerning sexual discrimination or whatever, as Mr CHEUNG has just talked about. Similar contract override terms that are related to copyright can easily be added in future. So the fact is that the absence of such terms in the contract today does not mean the situation will not happen in future … CHAIRMAN (in Cantonese): Mr Charles Peter MOK, your argument does not hold water. Even if your theory is valid, I still hold that when Mr CHEUNG Kwok-che spoke a moment ago, he has strayed from the question most of the time. Please continue with your speech.


MR CHARLES PETER MOK: Okay, I intend to move on to present my own arguments anyway, so I was just making a quick response to that particular point. In my previous speech, I talked about the prevalence of contract override terms in many other countries to the extent that … For example, according to some surveys in Australia, say, concerning national libraries, many materials on public loan are subject to contract override terms such that people actually cannot make digital copies or duplicates. So, as shown by these surveys, in reality, none of the contract terms would allow the personal use of these materials in the libraries, notwithstanding some explicit exemptions provided to users in the jurisdictions concerned. In other words, the exemptions are not enforceable as the contract override terms can always override the legal exemptions already provided in law.

Universities and academics in Australia also highlighted the widespread contract override usage in teaching and instruction, exchanges between libraries, the loaning out of books, as well as allowing users to transfer the content to the electronic media. Actually, all these were originally allowed under fair dealing in their laws, that is, these limitations on contract override did apply. On the other hand, contract override is not something new, even in the area of copyright laws. In fact, it often applies in computer programs and can be found in copyright laws in many countries, including New Zealand, Singapore, the European Union, and so on.

Now, even in Australia, there is a limitation on contract override in some

program-related situations under section 47H of the Australian Copyright Act which prohibits contract override against the reproduction of computer programs for storage, cache, technical research, security inspection or error debugging. In fact, back in 1995, the Australian Law Reform Commission commented that such contract override terms had rendered the related exemptions under the law useless. So, in 1999, the Copyright Amendment (Computer Programs) Act was introduced, with reference made to the European guidelines.

Chairman, I would now go back to the situation in the United Kingdom

because we often look to it as the first jurisdiction which implemented a more general limitation on contract override terms.

How did it happen in the first place? We should go back to the

HARGREAVES report in 2011 entitled "Digital Opportunity: A Review of Intellectual Property and Growth". Before I go further, my understanding is Prof Ian HARGREAVES will actually be in Hong Kong in mid-March … (Mr CHAN Chi-chuen stood up)


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CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, what is your point? MR CHAN CHI-CHUEN (in Cantonese): Chairman, I request a headcount. CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber. (While the summoning bell was ringing, a number of Members returned to the Chamber but did not go back to their seats) CHAIRMAN (in Cantonese): Will Members please return to their seats to facilitate the counting of quorum. (The summoning bell stopped after ringing for 15 minutes) CHAIRMAN (in Cantonese): The summoning bell has rung for 15 minutes, but a quorum is still not present in the Chamber1. Council now resumes. Council then resumed. ADJOURNMENT OF MEETING PRESIDENT (in Cantonese): I now adjourn the Council. Adjourned accordingly at 4.16 pm.

1 After the Council was adjourned, the Legislative Council Secretariat reviewed the video recording and

confirmed that there were a total of 35 Members in the Chamber when the summoning bell had rung for 15 minutes, and that a quorum was present.


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Appendix A CONTENTS Page SECTION I ― FORECASTING ASSUMPTIONS AND BUDGETARY

CRITERIA 5993

SECTION II ― MEDIUM RANGE FORECAST 5994 SECTION III ― RELATIONSHIP BETWEEN GOVERNMENT

EXPENDITURE/PUBLIC EXPENDITURE AND GDP IN THE MEDIUM RANGE FORECAST

5998

SECTION IV ― CONTINGENT AND MAJOR UNFUNDED

LIABILITIES 6000


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5995


5997


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6001

Appendix B CONTENTS Page SECTION I ― THE ESTIMATES IN THE CONTEXT OF THE

ECONOMY

Relationship between Government Expenditure, Public Expenditure and GDP 6002 SECTION II ― RECURRENT PUBLIC/GOVERNMENT EXPENDITURE

BY POLICY AREA GROUP

Recurrent Public Expenditure: Year-on-Year Change 6005 Recurrent Government Expenditure: Year-on-Year Change 6006 Percentage Share of Expenditure by Policy Area Group 6007

Recurrent Public Expenditure Recurrent Government Expenditure

SECTION III ― TOTAL PUBLIC/GOVERNMENT EXPENDITURE BY

POLICY AREA GROUP

Total Public Expenditure: Year-on-Year Change 6008 Total Government Expenditure: Year-on-Year Change 6009 Percentage Share of Expenditure by Policy Area Group 6010

Total Public Expenditure Total Government Expenditure

SECTION IV ― MAJOR CAPITAL PROJECTS PLANNED FOR

COMMENCEMENT IN 2016-2017 6011

SECTION V ― TRENDS IN PUBLIC EXPENDITURE: 2011-2012 TO

2016-2017 6012

SECTION VI ― ANALYSIS OF GOVERNMENT REVENUE 6014 SECTION VII ― CLASSIFICATION OF POLICY AREA GROUP 6015


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6005


6007


6009


6011


6013


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official record of proceedings wednesday, 24 february 2016 … · 2016-05-20 · official record of...

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