LegCo Paper No. FC 133/96-97
(These minutes have been
seen by the Administration)
Ref : CB1/F/1/2

Legislative Council Finance Committee

Minutes of the proceedings of the meeting held on Friday, 16 May 1997, at 2:30 pm in the Legislative Council Chamber

Members present :

    Hon CHAN Kam-lam (Deputy Chairman)
    Hon Martin LEE, QC, JP
    Hon SZETO Wah
    Hon Ronald ARCULLI, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon CHEUNG Man-kwong
    Hon Michael HO Mun-ka
    Hon Emily LAU Wai-hing
    Hon LEE Wing-tat
    Hon Fred LI Wah-ming
    Hon Henry TANG Ying-yen, JP
    Dr Hon Samuel WONG Ping-wai, OBE, FEng, JP
    Hon Howard YOUNG, JP
    Hon Zachary WONG Wai-yin
    Hon Christine LOH Kung-wai
    Hon CHAN Wing-chan
    Hon CHAN Yuen-han
    Hon Andrew CHENG Kar-foo
    Hon Paul CHENG Ming-fun
    Hon CHENG Yiu-tong
    Dr Hon Anthony
    CHEUNG Bing-leung
    Hon CHEUNG Hon-chung
    Hon IP Kwok-him
    Hon LAU Chin-shek
    Hon Ambrose LAU Hon-chuen, JP
    Hon LAW Chi-kwong
    Hon LEE Kai-ming
    Hon LEUNG Yiu-chung
    Hon Bruce LIU Sing-lee
    Hon Margaret NG
    Hon NGAN Kam-chuen
    Hon TSANG Kin-shing

Members absent :

    Dr Hon YEUNG Sum (Chairman)*
    Hon Allen LEE, CBE, JP
    Hon Mrs Selina CHOW, OBE, JP
    Dr Hon David K P LI, OBE, LLD (Cantab), JP
    Hon NGAI Shiu-kit, OBE, JP
    Hon LAU Wong-fat, OBE, JP
    Hon Edward S T HO, OBE, JP
    Hon Mrs Miriam LAU Kin-yee, OBE, JP
    Dr Hon LEONG Che-hung, OBE, JP
    Hon CHIM Pui-chung
    Hon Frederick FUNG Kin-kee
    Dr Hon HUANG Chen-ya, MBE
    Hon Eric LI Ka-cheung, OBE, JP
    Hon James TO Kun-sun
    Dr Hon Philip WONG Yu-hong
    Hon James TIEN Pei-chun, OBE, JP
    Hon LEE Cheuk-yan
    Hon CHOY Kan-pui, JP
    Hon David CHU Yu-lin
    Hon Albert HO Chun-yan
    Dr Hon LAW Cheung-kwok
    Hon LO Suk-ching
    Hon MOK Ying-fan
    Hon SIN Chung-kai
    Dr Hon John TSE Wing-ling
    Hon Mrs Elizabeth WONG, CBE, ISO, JP
    Hon Lawrence YUM Sin-ling

Public officers attending :

    Mr Kevin HO, JP
    Secretary for the Treasury (Acting)
    Mrs Carrie LAM
    Deputy Secretary for the Treasury
    Mr TAM Wing-pong, JP
    Deputy Secretary for Trade and Industry
    Mr K K WONG
    Principal Executive Officer of Trade and Industry Branch

Clerk in attendance :

    Mrs Vivian KAM
    Assistant Secretary General 1

Staff in attendance :

    Mrs Constance LI
    Chief Assistant Secretary (Finance Committee)
    Ms Anita SIT
    Senior Assistant Secretary (Finance Committee)1

As Dr Hon YEUNG Sum, Chairman, was engaged in other commitments, the meeting was chaired by Hon CHAN Kam-lam, Deputy Chairman.

Item No. 1 - FCR(97-98)9

2. The Committee approved the proposal.

Item No. 2 - FCR(97-98)10

3. The Committee approved the proposal.

Item No. 3 - FCR(97-98)11
Subhead 002 Allowances

4. Some members sought clarification on the proposed pay packages for the locally engaged (LE) staff in the Hong Kong Economic and Trade Offices (HKETOs). With regard to the pay scales for HKETOs in Washington, New York and San Francisco, the Deputy Secretary for Trade and Industry (DS/TI) explained that most of the LE staff in these offices were for historical reasons recruited by the British Embassy (BE) or British Consulate General (BCG) on behalf of the Hong Kong Government, and they were remunerated on BE or BCG pay scales. For HKETOs in other countries, only a small number of LE staff were engaged and their pay followed that of the BE/BCG local staff in their host countries mainly for the sake of convenience. In reply to a member, DS/TI advised that the proposed employment terms for these staff were in full compliance with the employment legislation of the host countries. The pay packages were also broadly comparable with the remuneration package of LE staff in the Hong Kong Trade Development Council (TDC) overseas offices. By way of illustration, a LE clerk in London Office was paid between £870 - £1,120 per month while £1,092 was paid by the TDC office.

5. On the proposed 2% increase in pay for LE staff in the three HKETOs in the United States (US), DS/TI explained that this was to provide incentive for the existing staff working in these offices for accepting the new employment terms and to compensate for the lack of promotion prospects in the HKETOs. DS/TI also confirmed that the question of tax liability and pension benefit had been considered by the Administration with actuarial advice, and that the granting of contract gratuities in lieu of pension would not result in extra tax or reduced pension benefit for the staff concerned. In this connection, a Bill was expected to be enacted in the US which would, among other things, exempt those LE staff who were non-US citizens from payment of salary taxes.

6. On the additional annual costs of $1,456,000 to Government, DS/TI advised that this was largely due to the 3.03% salary adjustments for LE staff in the Tokyo office and payment of contract gratuities under the new package.

7. Responding to a member on the proposed delegation of authority to the Secretary for the Treasury under paragraph 2(d) of the discussion paper, DS/TI confirmed that Finance Committee approval would be sought should future pay adjustment exceed the annual pay adjustment for the civil service in the respective host countries or cities.

8. The Committee approved the proposal.

9. The Committee was adjourned at 2:55 pm.

Legislative Council Secretariat

27 May 1997

*.. other commitments

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