For discussion FCR(95-96)136
on 8 March 1996
ITEM FOR FINANCE COMMITTEE
HEAD 63 - HOME AFFAIRS DEPARTMENT
Subhead 110 Honoraria for members of committees
Members are invited -
- to approve a new accountable office rental allowance of up to $4,500 per month for District Board members with effect from 1 April 1996; and
- to delegate to the Secretary for the Treasury the authority to approve future annual revisions of the office rental allowance to District Board members by reference to the movement of the Hang Seng Consumer Price Index.
The current rate of honorarium payable to District Board (DB) members is insufficient to meet rental and related expenses of their ward offices.
2. We propose that -
- DB members be eligible for an accountable office rental allowance of up to $4,500 per month for rental, rates, management fees, charges for water, electricity and fixed telephone and/or fax lines installed in their ward offices with effect from 1 April 1996;
- DB members holding concurrently membership in other tiers of representative government be eligible for -
- up to the full amount of the allowance if they are operating a separate ward office or separate ward offices for their DB duties in the district; or
- up to two-thirds of the allowance if they are operating a single office in the district for duties relating to their multiple membership, provided that the expenses claimed have not already been met from allowances claimed in their other capacities; and
- the Secretary for the Treasury be delegated the authority to approve annual revisions of the allowance by reference to the movement of the Hang Seng Consumer Price Index.
3. When Members approved the revision of DB members honorarium from $6,000 to $6,400 per month on 9 December 1987, Members noted that there was an office rental element of $1,400 in the rate of the honorarium. We have adjusted the rate of honorarium each year for inflation. Nowadays most DB members have set up ward offices to discharge their duties. They find that the expenses for running a ward office take up a large part of the honorarium.
4. The Director of Home Affairs (DHA) conducted a survey in 1995 on the main items of DB members expenditure. The findings revealed that about 70% of the members had their own offices. The median size of these offices was about 30m2 and the monthly rentals ranged from $5,000 to $9,000. Based on the findings of the survey, DHA concluded that there was a case for introducing a new accountable office rental allowance to assist DB members in running their ward offices. Using the median office size of 30m2 as a benchmark, we consider an average rental of $7,000 reasonable. Given that there is already an element of rental allowance in the existing DB honorarium (equivalent to about $2,500 at present-day value), DHA proposes to set the new allowance at $4,500 (i.e. $7,000 - $2,500) per month.
5. The new allowance will be 100% accountable, payable on a reimbursement basis on production of certified receipts, for expenses actually paid by DB members related to the running of their offices for discharging DB duties in the district concerned. The Home Affairs Department will reimburse DB members in respect of claims on rental, rates, management fees and charges for water, electricity and fixed telephone and/or fax lines installed in the office. DB members will need to make available their claims for public inspection upon request. They may pool their allowances to run joint offices, provided that the amount claimed by each member does not exceed his own individual maximum allowance and the total claims made in respect of a certain office do not exceed the actual expenses incurred. DB members will need to sign an agreement declaring the proportion of expenses of the joint office for which they will be responsible.
6. As regards paragraphs 2(b)(i) and (ii), we consider that a DB member holding multiple membership in other tiers of representative government should be eligible for the full amount of the allowance if he is running a separate office solely for his DB duties. However, in the case of a DB member running a single office to discharge the various functions under his multiple membership, we propose that he should receive only up to two-thirds of the allowance for expenses incurred on the office. This is in line with the present policy governing the payment of DB honorarium for members holding multiple membership in other tiers of representative government as approved by Members on 9 December 1987. In order to ensure that the total claims will not exceed the actual amount expended, DB members will need to certify that the expenses incurred have not already been met from other allowances.
7. As regards paragraph 2(c), in order to preserve the value of the allowance, we propose to revise it annually in line with the movement of the Hang Seng Consumer Price Index. We further propose the delegation of authority to the Secretary for the Treasury to approve these annual adjustments, in line with our practice to streamline revisions to rates which follow well-defined rules and are routine in nature. On 24 July 1992, Members approved similar delegation to the Secreatry for the Treasury in respect of the revision of DB honorarium.
8. If all 373 DB members claim up to the maximum of the proposed allowance throughout a 12-month period, we estimate that the proposal will give rise to additional annually recurrent expenditure of $20.2 million. We have included sufficient provision for the purpose in the 1996-97 draft Estimates.
9. In 1981 Members approved the introduction of a DB honorarium at the rate of $2,000 per month with effect from April 1982. This honorarium was to meet, in part, earnings forgone due to time spent on DB matters and expenses incurred in connection with DB business. Over the years, we have revised the rate to take account of inflation and increased responsibilities.
10. On 9 December 1987, Members agreed that individuals holding multiple membership in different tiers of representative government be eligible to receive in full the highest of the members allowances, any special allowance, and two-thirds of the other allowances for which they are eligible.
11. On 24 July 1992, Members delegated to the Secretary for the Treasury the authority to approve annual revisions of the honorarium by reference to the movement in the Hang Seng Consumer Price Index. The current rate of DB honorarium as revised in October 1995 stands at $15,800 per month.
Home Affairs Branch
Last Updated on 2 December 1998