PLC Paper No. FC 73
(These minutes have been
seen by the Administration)

Ref : CB1/F/1/2

Finance Committee of the Provisional Legislative Council

Minutes of the meeting
held at the Legislative Council Chamber
on Friday, 21 November 1997, at 2:30 pm

Members present:

Hon Ronald ARCULLI, JP (Chairman)
Hon Henry WU (Deputy Chairman)
Hon WONG Siu-yee
Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Edward HO Sing-tin, JP
Dr Hon Raymond HO Chung-tai, JP
Hon NG Leung-sing
Prof Hon NG Ching-fai
Hon Eric LI Ka-cheung, JP
Hon LEE Kai-ming
Hon Allen LEE, JP
Hon Mrs Elsie TU, GBM
Hon Mrs Selina CHOW, JP
Hon NGAI Shiu-kit, JP
Hon Henry TANG Ying-yen, JP
Hon MA Fung-kwok
Hon CHEUNG Hon-chung
Dr Hon Mrs TSO WONG Man-yin
Hon LEUNG Chun-ying, JP
Dr Hon LEONG Che-hung, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon MOK Ying-fan
Hon CHAN Choi-hi
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon TSANG Yok-sing
Hon CHENG Kai-nam
Hon Frederick FUNG Kin-kee
Hon Andrew WONG Wang-fat, JP
Dr Hon Philip WONG Yu-hong
Hon Kennedy WONG Ying-ho
Dr Hon Charles YEUNG Chun-kam
Hon YEUNG Yiu-chung
Hon IP Kwok-him
Hon CHIM Pui-chung
Hon Bruce LIU Sing-lee
Hon Mrs Miriam LAU Kin-yee, JP
Hon Ambrose LAU Hon-chuen, JP
Hon CHOY Kan-pui, JP
Hon Paul CHENG Ming-fun, JP
Hon CHENG Yiu-tong
Hon Timothy FOK Tsun-ting
Hon KAN Fook-yee
Hon LO Suk-ching
Dr Hon LAW Cheung-kwok
Hon TAM Yiu-chung, JP
Hon CHOY So-yuk

Members absent :

Hon David CHU Yu-lin
Dr Hon David LI Kwok-po, JP
Hon Mrs Peggy LAM, JP
Hon HUI Yin-fat, JP
Hon CHAN Yuen-han
Hon Howard YOUNG, JP
Hon LAU Kong-wah
Hon LAU Wong-fat, JP
Dr Hon TANG Siu-tong, JP
Hon NGAN Kam-chuen

Public officers attending :

Secretary for the Treasury

Mrs Carrie LAM, JP
Deputy Secretary for the Treasury

Principal Executive Officer (General), Finance Bureau

Mr Bobby CHENG
Principal Assistant Secretary for Trade and Industry

Mr Francis HO, JP
Director-General of Industry

Mr Sidney CHAN
Assistant Director-General of Industry

Mr Parrish NG
Principal Assistant Secretary for Home Affairs

Miss Angela LUK, JP
Assistant Director of Home Affairs

Ms Michelle LI
Principal Assistant Secretary for Education and Manpower

Controllor, Student Financial Assistance Agency

Mr Alfred WONG
Ex-Controllor, Student Financial Assistance Agency

Mr Raymond YOUNG
Deputy Secretary for Education and Manpower

Mrs Helen YU, JP
Director of Education

Mr LEE Hing-fai
Assistant Director of Education (Schools)

Mr Kelvin K F CHAN
Assistant Director of Education (Departmental Administration)

Clerk in attendance :

Ms Pauline NG
Assistant Secretary General 1

Staff in attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)5

Mr Matthew LOO
Senior Assistant Secretary (1)7

Item No. 1 - FCR(97-98)61

Subhead 700 General other non-recurrent
Item 542 Services Support Fund

Members noted that only 27 projects out of the 204 applications had been approved since the establishment of the Services Support Fund (SSF/the Fund). Members enquired about the way the applications were assessed and the reasons for according priority to government-funded organisations, as shown in the list of approved projects. In response, the Director-General of Industry (DGI) advised that as the approved commitment of the Fund was $50 million, it was necessary to accord priority to those applications where the merits were identifiable and where there was certainty in the organisations' ability to deliver. All applications were put to the SSF Vetting Committee which adopted objective yardsticks to determine the merits of each application. Emphasis was placed on the benefits which the proposed projects would bring to the trade as a whole, and the identity of organisations was not a factor for consideration. The Vetting Committee would ensure that the scope of the approved projects would not overlap.

2.Members expressed doubt on whether small and medium enterprises were aware of the Fund, and the mechanism for ensuring that the projects would contribute positively to the service sector. DGI said that the Industry Department had been active in publicising the Fund among various sectors of the service sector, although caution had to be exercised to avoid any misunderstanding about possible favouritism and possible conflicts of interests. In practice, however, small enterprises might have difficulties in preparing applications owing to limited staff resources. On the possibility of applying means tests to enable more private organisations to benefit from the scheme, DGI explained that the Vetting Committee had arrived at a conscious decision that it would not be desirable nor practicable to introduce means-test arrangements.

3.As regards the contribution of the projects to the service sector, DGI explained that the applicants were required to provide detailed descriptions on the purpose of the project, the working procedure, the project deliverables and the relationship of the project with the service sector. The Administration would follow-up and assess their contributions. Members urged the Administration to cater for the needs of small and medium enterprises in order not to rule out worthwhile cases.

4.In addressing members' concern on the time taken to process the applications, DGI assured the Committee that there had not been any delay in the processing and no complaint had been received in this respect.

5.By referring to a specific case, a member enquired whether the Industry Department would contact the applicants to understand more about the details of the projects. DGI said that the applicants were required to provide relevant information in their applications, and that contacts with the applicants would only be made when such information was incomplete. He reiterated that all applications were put to the Vetting Committee for consideration and confirmed, in response to a member, that the Industry Department would provide information on the development of the relevant sector in question together with its own recommendation on the particular application for the reference of members of the Vetting Committee.

6.As regards the effectiveness of the Fund, DGI advised that since only one out of the 27 projects had been completed, it was not yet possible to assess the overall effectiveness of the Fund at this stage. The Administration planned to conduct such a review in 1998. On a member's request for the applicants to be given the reasons for accepting or rejecting the applications, DGI assured that this would be duly considered in the context of the review.

7.The Committee approved the proposal.

Item No. 2 - FCR(97-98)60

Subhead 110 Honoraria for members of committees

8.The following members declared interest as members of Provisional District Boards (PDB) :

Mr WONG Siu-yeeMr MOK Ying-fan
Mr CHAN Choi-hiMr CHAN Kam-lam
Mr IP Kwok-himMr CHOY Kan-pui
Dr LAW Cheung-kwok

9.A member cast doubt on the need for providing office rental allowances to PDB members as they were appointed by the Chief Executive and had no obligation to set up district offices in the same way as former District Board members who were elected through the geographical constituency elections. He asked if consideration had been given to providing offices for PDB members in Government offices or public rental housing estates.

10.In reply, the Principal Assistant Secretary for Home Affairs and the Assistant Director of Home Affairs (AD/HA) said that all PDB members alike had to discharge their duties as PDB members in serving the community and as such, should be eligible for the monthly honorarium and the accountable office rental allowance which was drawn on a reimbursement basis. Under such arrangements, PDB members had the flexibility to make claims according to their own needs and individual circumstances. The member's suggestion for the provision of offices as an alternative to the allowance would be taken into account when the honoraria package was next reviewed.

11.AD/HA clarified in response to a member that the honoraria of $29,980 for PDB chairmen holding multiple membership in different tiers of representative government was calculated on the basis of two-third of the honoraria for members of $17,990 plus the honorarium of $17,990 for the additional responsibility of chairmanship.

12.The Committee approved the proposal.

Item No. 3 - FCR(97-98)62

Subhead 275 Student travel scheme

13.A member quoted the Administration's estimate that 375 students aged over 25 would benefit from the expansion of the ambit of the Student Travel Scheme, and asked for the basis of the estimate and the actual number of such students pursuing tertiary education. The Principal Assistant Secretary for Education and Manpower said that the estimated figure of 375 was projected on the basis of the number of successful applicants in other means-tested financial assistance schemes which did not impose any upper age limit (e.g. the Local Student Finance Scheme). She added that institutions might not have information on the total number of students aged over 25. Nevertheless, the Administration would contact tertiary institutes to see if such data was available. Admin

14.Regarding the eligibility criteria being adopted for students in the various levels of primary, secondary and university education, the Ex-Controller, Student Financial Assistance Agency (Ex-C/SFAA), advised that different income assessment criteria had been adopted for the various levels of students. The criteria for primary and secondary pupils were the same as those currently used for other student financial assistance schemes. In this respect, a member referred to the Chief Executive's pledge in October 1997 for introducing a non-means tested loan scheme to all full-time tertiary students, and enquired if an independent means test for tertiary students under the Student Travel Scheme should be devised. Ex-C/SFAA advised that university students who were successful in their application for assistance under the Local Student Finance Scheme would qualify for the travel subsidy.

15.In response to a question, Ex-C/SFAA advised that 194 903 applications had been received under the Student Travel Scheme in the 1996-97 school year, of which 186 898 applications at a total cost of $247 million were approved.

16.The Committee approved the proposal.

Item No. 4 - FCR(97-98)63

Subhead 149 General departmental expenses
Subhead 305 Code of Aid for secondary schools
Subhead 330 Assistance to private secondary schools and bought places
New Recurrent Account Subhead 108 " Remuneration for special appointments"

17.Mrs Elsie TU declared interest as supervisor of a secondary school.

18.In connection with the proposal for introducing a new Native-speaking English Teacher (NET) Scheme, members raised a range of questions on the remuneration package to be offered to the NETs and how far the Scheme would be effective in enhancing the teaching of English. Some members pointed out that the purpose of employing native-speakers as English teachers was to increase students' opportunity to practise their oral skills. However, with one NET provided to a school with up to 39 classes and with the wide-range of duties proposed including the tailoring of curriculum, it was practically impossible for the NET to practise English with the students.

19.The Director of Education (D of E) acknowledged that expectations of NETs were high. She stressed however that this was not the first time native-speaking English teachers were brought in for the purpose of enhancing the teaching and learning of English. According to the feedback of schools where such teachers had been engaged, the teachers had helped to increase students' confidence in speaking English. The Assistant Director of Education (Schools) (AD/E(S)) said that a recent assessment indicated that the English standard of Form 2 students in schools where native-speaking teachers were employed had improved generally by 7% to 8%, while that for Form 3 students had improved by as high as 19%; the listening skill of Form 3 students had raised by 2% and conversation skill by 3% to 4%. D of E cautioned that the effectiveness of the schemes should not be judged only by the academic achievements, and that the readiness of the students in conversing in English was important.

20.D of E further explained that the focus of the Scheme and the duties of the NETs were aimed at creating an environment for students to communicate in English. Classroom teaching remained a major responsibility of the NETs, although they were also expected to act as an English language resource person for other teachers and to organise activities which would promote students' participation in the use of English . The duties of NETs set out in Enclosure 3 of the paper only provided the scope, whereas decisions on the emphasis to be placed on the learning processes would be left to the individual schools. The Deputy Secretary for Education and Manpower (DS/E&M) added that English teachers in previous schemes had to be responsible for as much classroom teaching as other teachers, as they occupied posts in the teacher establishment, but NETs in the proposed Scheme would be able to put their strengths to good use by focusing more on the training of oral skills and creating a conducive environment for learning English.

21.On the comparison of the conditions of service between the native-speaking English teachers under previous schemes and the NET Scheme, the Assistant Director of Education (Departmental Administration) (AD/E(DA)) said that teachers in previous schemes were appointed for public and subsidised schools, and their conditions of service differed with the period in which they were appointed. Those teachers appointed before September 1996 were engaged on expatriate terms, i.e. apart from the same pay scale as other teachers, they also enjoyed a monthly housing allowance of $19,450 and 25% end of contract gratuity. Some of these teachers still remained up to this date. Following the recommendation in the Education Commission's Report No. 6 for efforts to be made to employ native-speaking teachers on local terms, two batches of 12 and 25 such teachers were appointed in 1996-97 and 1997-98 respectively. These teachers did not have any housing allowance but were eligible for a 25% gratuity upon satisfactory completion of contract. The intake figure fell short of the target of 100 due partly to the absence of allowance for housing which was well-known as being expensive in Hong Kong. As regards the conditions of service of NETs under the new Scheme, AD/E(DA) advised that these would include inter alia a special non-accountable allowance of $13,000 and a reimbursable medical allowance. One of the considerations of the non-accountable monthly allowance was the need for NETs to rent accommodation as a result of the uprooting from their normal place of residence.

22.Referring to the different conditions of service for different teachers undertaking the same functions, D of E explained that although the Administration also considered this situation undesirable, it was difficult to alter the terms of service of those who were already in service. DS/E&M confirmed that no more teachers would be appointed under the terms of the previous schemes and that the terms to be offered to serving teachers upon renewal of contracts were being examined by the Civil Service Bureau.

23.On the cost-effectiveness of commissioning an agency to conduct the entire recruitment exercise for NETs and the appropriateness for the same agency to carry out periodic evaluation of the Scheme, AD/E(S) said that the agency would act as the co-ordinator in recruitment and also help the NETs to adapt to the local school environment and to facilitate their integration. D of E added that sponsoring organisations of schools which were confident in recruiting NETs who met the specified qualifications for appointment would be welcomed to recruit their own NETs. As for the evaluation of the Scheme, AD/E(S) explained that the agency would only be responsible for drawing up a plan for the Education Department. The actual assessment would be done on the basis of feedback from schools and other professionals. No conflict of interest would thus arise.

24.A member stressed the importance for school management to make every endeavour to help NETs to integrate into the school environment so as to establish good working relationships and morale. He suggested that clear guidelines should be issued to school managements in this respect. D of E shared the concern and advised that the importance for NETs to integrate and to understand their complementary role in enhancing the standard of English of students would be made clear during interviews of NET applicants. She confirmed in response to the member that a clause on dismissal on unsatisfactory performance would be included in the employment contract to facilitate termination of contract under such circumstances.

25.Some members, including those in the Liberal Party, reiterated their support for a scheme which would help enhance the standard of English of the younger generation. They stressed, however, that teachers from overseas should only be resorted to when local recruitment efforts failed to attract a sufficient number of qualified English teachers. Even after the proposal was approved by the Committee, the Administration should continue to address the concerns raised by members on the inequality of terms for local teachers who were not eligible for the special allowance even if they possessed the requisite qualifications for appointment as NETs. A member also pointed out that such arrangements were at variance with the policy on common terms of appointment.

26.In response, DS/E&M explained that NETs were not civil servants and the NET Scheme would not create conflicts with regard to the policy on common terms of appointment. Such an arrangement could be compared to the appointment of consultants. As the special allowance was conceived as an attraction for qualified teachers from overseas and not a reward for higher proficiency in teaching English, it would not be appropriate to provide the allowance to local teachers.

27.A member pointed out that while the special allowance was basically provided to meet the housing needs of the NETs, the circumstances of each of the NETs would be different. He therefore sought clarification on the eligibility of those who had migrated and were prepared to return to Hong Kong for the appointment, and the spouses of expatriates working in Hong Kong. He also questioned if the allowance would be withdrawn if a NET got married with a local resident after commencement of the contract. DS/E&M advised that the principle governing payment of the special allowance was whether or not the NET's habitual place of residence was in Hong Kong. Those whose normal place of residence was not in Hong Kong would be eligible for the special allowance. Nationality was not a factor for consideration.

28.As to whether the special allowance would be withdrawn when a NET got married to a local person, DS/E&M said that it might be difficult from the legal point of view to alter the conditions of service for the rest of the current contract, but he would seek legal advice in this respect. A member cautioned that if no action was taken to ensure that no double benefits would be given, the Scheme would be subject to criticisms in the same way as in the case of the Hospital Authority. D of E assured members that double benefits would not be permitted under the NET Scheme.Admin

29.Regarding the target of recruiting 750 NETs, D of E advised that the Administration was aiming at recruiting 300 to 400 NETs initially in the first year. Recruitment of the remaining NETs would be for the purpose of providing additional teachers to schools which adopted Chinese as the Medium of Instruction. Due consultation with parties concerned including recruitment agencies and professionals had confirmed the practicality of recruiting at least 300 to 400 NETs in the first year.

30.The Committee approved the proposal.

31.The Committee was adjourned at 4:30 pm.

Provisional Legislative Council Secretariat
19 December 1997