Provisional Legislative Council

PLC Paper No. CB(1) 1284

Ref : CB1/BC/5/97/2

Bills Committee on
Housing (Amendment) (No.3) Bill 1997

Minutes of meeting held on
Monday, 9 February 1998, at 4:30 pm
in Conference Room B of the Legislative Council Building

Members present :

Hon CHAN Yuen-han (Chairman)
Hon WONG Siu-yee
Hon Edward HO Sing-tin, JP
Dr Hon Raymond HO Chung-tai, JP
Hon Mrs Selina CHOW, JP
Hon Mrs Peggy LAM, JP
Hon CHENG Kai-nam
Hon Frederick FUNG Kin-kee
Hon Ambrose LAU Hon-chuen, JP
Hon CHOY Kan-pui, JP
Dr Hon TANG Siu-tong, JP

Member attending :

Hon Ronald ARCULLI, JP

Members absent :

Hon HO Sai-chu, JP
Hon MA Fung-kwok
Hon CHAN Kam-lam
Hon Andrew WONG Wang-fat, JP
Hon Bruce LIU Sing-lee

Public officers attending :

Housing Bureau

Mr Andrew Wells, JP,
Deputy Secretary for Housing

Miss Sandy CHAN,
Principal Assistant Secretary for Housing

Housing Department

Mr R A Bates,
Deputy Director of Housing (Management) (Atg)

Mr Simon LEE,
Assistant Director/Legal Advice

Ms Monica LAW,
Senior Government Counsel

Clerk in attendance :

Ms LEUNG Siu-kum,
Chief Assistant Secretary (1)2
Staff in attendance :

Mr Arthur CHEUNG,
Assistant Legal Adviser 5

Miss Becky YU,
Senior Assistant Secretary (1)3

I Confirmation of minutes of previous meeting
(PLC Paper No. CB(1) 870)

The minutes of the meeting held on 21 January 1998 were confirmed.

II Meeting with the Administration
(Provisional Legislative Council Brief ref: HB(CR)5/4/21

PLC Paper Nos. LS 72, CB(1) 815 (02) and (03))

2. At the Chairman's invitation, the Deputy Secretary for Housing (DS for H) highlighted the salient points in the Provisional Legislative Council Brief. Members then proceeded to discuss the Housing (Amendment) (No. 3) Bill 1997.

3. Members noted that the former Legislative Council had rejected the proposal for imposing an additional fine of treble the amount of rent undercharged upon those who were found guilty of knowingly providing false information to the Housing Authority (HA) when declaring income and assets on the ground that there was no trend of increase in the number of false declarations. They asked if there were signs indicating a deteriorating situation which prompted the re-introduction of the proposal. The Deputy Director of Housing/Management (Acting) (DD of H/M (Atg)) responded that although there was at the moment no indication of an upsurge in the number of false declarations, an increase would be probable with the introduction of the policy on better-off tenants paying market rent on 1 April 1997. He admitted that at present, there were only 12 cases of successful convictions against better-off tenants making false declarations in 1997 and five cases were under investigation in the first quarter of 1998. However, the low number of convictions might not reflect the true extent of abuses as the Housing Department (HD) could only afford checking at random the declarations made by better-off tenants having regard to the lengthy time required in conducting investigation and collecting evidence. Furthermore, as the policy of requiring better-off tenants to pay market rent had only been implemented for ten months, the number of convictions recorded so far was not a reliable indicator. He stressed that the Administration was committed to strengthening the deterrence against making false declarations to HA before it became a problem.

4. As regards the penalty provisions, DS for H informed members that the prevailing maximum penalties were six months' imprisonment and a fine of $50,000 for making false declarations to HA. The average fine for the past convicted cases was only about $4,000. Noting the low level of penalties imposed by judges, members questioned the need for the additional fine. They were of the view that efforts should be made to convince the Court that abuse of public housing subsidy was a serious offence justifying heavier penalties, including imprisonment since the criminal record resulting from a conviction, which affected inter alia a person's applications for visas to travel overseas, would be a far more effective deterrent than cash penalty. The Principal Assistant Secretary for Housing (PAS for H) explained that of the 278 deception cases processed over the past seven years, 269 were related to applications for public rental and interim housing. Having regard to the situation of individual offenders concerned, a relatively low level of penalties had been imposed by the Court. However, with the implementation of the requirement for better-off tenants to pay market rent on 1 April 1997, it was necessary to increase the sanctions to deter people, in particular better-off tenants from making false declarations. The proposed penalty provision would enable the Court to consider if additional fine was necessary when determining the level of penalty. The Assistant Legal Adviser advised that the proposed additional fine, commensurate with the rent undercharged, was to ensure that offenders would not profit from fraudulent declarations, thereby enhancing the deterrent effect. The provision would provide a reference to the Court when determining the level of penalty.

5. Members remained unconvinced of the Administration's explanations on the need for the proposal for further fine in view of its non-binding effect on judges in sentencing. The Assistant Director/Legal Advice (AD/LA) responded that HA had considered the possibility of making the additional fine a mandatory penalty. Upon advice from the Department of Justice, this was discarded as penalties should be at the discretion of the Court. As to why the Administration did not adopt a more direct approach of increasing the maximum fine from level five to level six, AD/LA explained that after thorough consideration, HA concluded that the fine of treble the amount of rent undercharged would be much higher than the fine at level six for offenders who had profited from fraudulent declarations for a long period of time. This would serve as a more effective deterrent against false declarations.

6. As regards the basis upon which the fine of treble the amount of rent undercharged was arrived at, AD/LA advised that this was modelled on provisions in the Inland Revenue Ordinance.

III Any other business

7. The next two meetings would be held on Mondays, 16 and 23 February 1998, at 10:45 am.

(Post-meeting note: As the Bills Committee completed scrutiny of the Bill on 16 February 1998, the meeting on 23 February 1998 was subsequently cancelled.)

8. There being no other business, the meeting ended at 6:15 pm.

Provisional Legislative Council Secretariat
29 April 1998