on 23 July 1997
ITEM FOR FINANCE COMMITTEE
HEAD 106 - MISCELLANEOUS SERVICES
Subhead 220 Honoraria for Members of the Executive Council
HEAD 112 - PROVISIONAL LEGISLATIVE COUNCIL COMMISSION (note)
Subhead 366--Remuneration and reimbursements for Members of the Provisional Legislative Council (note)
Subhead 872--Setting up and winding up allowances for Members of the Provisional Legislative Council (note)
Members are invited to approve -
- the remuneration package for Members of the Executive Council (ExCo) of the Hong Kong Special Administrative Region (HKSAR) with effect from 1 February 1997;
- the remuneration package for Members of the Provisional Legislative Council (PLC) of the HKSAR for the period of 25 January to 30 June 1997 and supplementary provision of $28.53 million for Subhead 366 under Head 112;
- that, with effect from 1 July 1997, PLC Members should receive a remuneration package which is the same as that for Members of the former Legislative Council (LegCo); and
- the extension of the ambit of Head 112 Provisional Legislative Council Commission Subhead 366 Remuneration and reimbursements for Members of the Provisional Legislative Council and Subhead 872 Setting up and winding up allowances for Members of the Provisional Legislative Council to include reimbursements for Members of the former LegCo and for Members of the Provisional Legislative Council.
We need to implement the various recommendations of the Independent Commission on Remuneration for Members of the Executive Council and the Legislature of the Hong Kong Special Administrative Region (the Independent Commission).
2.We propose -
- the following remuneration package for ExCo Members -
- a monthly taxable honorarium of $106,110 for the Convenor of ExCo and $66,270 for other Non-official Members of ExCo with effect from 1 February 1997;
- ExCo Members who sit on the PLC should receive the ExCo remuneration in full and two-thirds of the salary component of their PLC remuneration;
- the following remuneration package for PLC Members for the period of 25 January to 30 June 1997 -
- PLC Members who did not serve on the previous LegCo will receive a lump sum payment of $100,000 for the period;
- the President of the PLC will receive double the amount for the same period, i.e. $200,000;
- PLC Members who also sat on the previous LegCo will receive half of the above lump sum, i.e. $50,000;
- PLC Members who serve on ExCo will receive two-thirds of the above lump sum for the same period;
- all PLC Members including the President and those who serve on ExCo will receive during the period:
-a monthly accountable allowance for office and staff expenses of up to $79,530;
-a monthly entertainment and travelling allowance of up to $13,250;
- the President of PLC will receive an additional entertainment allowance of up to $69,268 for the period;
- that, with effect from 1 July 1997, the remuneration package for the President, the President's Deputy (Chairman of House Committee at the same time) and other PLC Members should remain the same as that for
the President, President's Deputy and Members of the former LegCo, but PLC Members who also sit on the ExCo should receive two-thirds of the salary component of the remuneration; and
- that we extend the ambit of Head 112 Provisional Legislative Council Commission Subhead 366 Remuneration and reimbursements for Members of the Provisional Legislative Council and Subhead 872 Setting up and winding up allowances for Members of the Provisional Legislative Council to include reimbursements for allowances and expenses incurred by Members of the former LegCo and Members of PLC.
Remuneration package for ExCo Members
3.Under Article 54 of the Basic Law, ExCo is an organ for assisting the Chief Executive in policy making. Article 56 of the Basic Law stipulates that the Chief Executive should consult ExCo before making important policy decisions, introducing Bills into the Legislative Council, making subordinate legislation or dissolving the Legislative Council. Since its appointment at the end of January 1997, ExCo has been meeting every week to consider and advise on issues essential to the establishment of the HKSAR. The Independent Commission expected ExCo to have an important role to play in advising the Chief Executive on the future development of Hong Kong. It therefore considered that Non-official Members should be remunerated for their service.
4.The Independent Commission considered that the remuneration system whereby Members of the former ExCo received a monthly taxable honorarium as a form of recognition for their service and to compensate them partially for any pecuniary loss arising from the time spent on ExCo work was administratively simple. The amount of the honorarium was reasonable and would reflect both the level of responsibilities and the status of ExCo Members as the most senior advisers to the Chief Executive. Since the previous system was accepted by the public, the Independent Commission recommended that it should remain. Having regard to the heavy involvement of Members in preparing for the establishment of the HKSAR, the Independent Commission also recommended that the honorarium should be payable from February 1997 when ExCo of the HKSAR began to meet.
5.The Independent Commission recognised that the Convenor, ExCo had an active role to play in liaising with community groups to facilitate the resolution of a whole range of issues relating to the operations of the HKSAR. He would also have a co-ordinating role among Non-official ExCo Members in taking forward ExCo-related issues and safeguarding the principles of confidentiality and collective responsibility. On the basis of these additional responsibilities, the Independent Commission recommended that, like the former Senior Member, the Convenor should receive an honorarium 60% more than that for the other Non-official Members.
6.The established practice for those who are members of more than one tier of the three-tier government is that they should receive the full remuneration for the higher level of government and two-thirds of the honorarium from the other tier(s) of which he is also a member. In accordance with the spirit of this practice, the Independent Commission recommended that ExCo Members who also sat on the PLC should receive in full the remuneration for their ExCo membership and two-thirds of the salary component of their service on the PLC. They would be eligible in full for the expenses allowance for PLC Members.
Remuneration package for PLC Members before July 1997
7.In the run-up to 1 July 1997, the main tasks of the PLC were to enact legislation absolutely essential for the operations of the HKSAR or which replaced those not adopted by the Standing Committee of the National People's Congress. Between 25 January and 30 June, the full Council of the PLC held more than ten sittings on weekends in Shenzhen. The PLC considered a total of 13 Bills during this period. In addition, the Finance Committee of the PLC also examined the 1997-98 Budget. The PLC held a motion debate on the consultation document 'Civil Liberties and Social Order' on 10 May. It also formed a number of Bills Committees to study the Bills introduced by the Chief Executive's Office and endorsed the appointment of the Chief Justice and judges of the Court of Final Appeal, and the Chief Judge of the High Court. The Independent Commission noted that, within the parameters set by the Preparatory Committee's Decision on the Establishment of the Provisional Legislative Council, the PLC's role before 1 July was largely limited to examining Bills which it had to pass in connection with the establishment of the HKSAR. The workload was lighter than that for a full-fledged legislature. Notwithstanding this lighter workload, the PLC had played a vital role in the establishment of the HKSAR. The Independent Commission therefore concluded that we should remunerate PLC Members for their service on the PLC prior to 1 July 1997, although we should take account of its lighter workload. In addition, Members should be eligible for allowances and reimbursement of expenses incurred during this period. To take into account the fact that the PLC held its first meeting on 25 January 1997, the Independent Commission recommended that the reimbursement of the expenses should start from that date. The Independent Commission took the view that a lump sum payment of $100,000 to PLC Members (and half the amount for those who were concurrently Members of the former LegCo) was reasonable and would give fair recognition to the work of the PLC Members. In addition, Members should be granted sufficient allowances, in respect of the staff and office support they have paid for, to facilitate their work on the PLC.
8.In view of the mode of operation of the PLC before 1 July, the Independent Commission did not recommend any provision for the setting up of offices by PLC Members during that period.
Remuneration package for PLC Members from 1 July 1997
9.The Independent Commission expected that the PLC would operate in essentially the same manner as the former LegCo. In other words, there would be question time each week, motion debates, panel meetings, and other Committee meetings. On that basis, the Independent Commission considered the role and responsibilities of the PLC to be broadly comparable to that of the former LegCo. The Commission therefore recommended that the remuneration package for the former LegCo should apply to the PLC from 1 July 1997. For Members' ease of reference, the remuneration package of former LegCo Members is set out in the Enclosure.
Change of ambit of Subhead 366 and Subhead 872
10.Following the establishment of the HKSAR on 1 July 1997, we have to change the titles of some Heads of expenditure and its Subheads to conform with the relevant provisions of the Basic Law and with the relevant stipulations of the Government of the HKSAR. Head 112 Subhead 366 now provides for the salaries and allowances for Members of the PLC. Under Subhead 872 PLC Members are able to claim setting up and winding up allowances. While the term of former LegCo Members already lapsed on 30 June 1997, some of them might have incurred expenditure during their term of office and would need to seek reimbursement. Those who are not PLC Members might also claim the allowances for winding up their offices. We need to extend the ambit of these two subheads to include reimbursement of allowances for former LegCo Members.
11.We estimate that the implementation of the remuneration package for the ExCo Members with effect from 1 February 1997 will result in an additional expenditure of $3.18 million. Subject to Members' approval, we will approve the supplementary provision required in 1997-98 under delegated authority.
12.We estimate that implementation of the remuneration package for the PLC Members for the period of 25 January to 30 June 1997 will incur an additional expenditure of $28.53 million1 . If Members approve the proposal, we will offset the supplementary provision for Subhead 366 under Head 112 by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments. The remuneration package for Members of the PLC from 1 July 1997 does not have any additional financial implications as it is the same as that for Members of the former LegCo.
13.Appointed by the Chief Executive on 11 March 1997, the Independent Commission is tasked with determining the remuneration packages for Members of the Executive Council and the Legislature of the HKSAR. The terms of reference of the Commission are as follows -
- On the basis of the existing remuneration system, to recommend to the Chief Executive the criteria for and the level of the remuneration to be paid before 1 July to Members of the Executive Council and the Provisional Legislative Council of the HKSAR. In making its recommendations, the volume and the nature of the business of the two bodies in preparing for the establishment of the HKSAR should also be taken into account;
- in view of (a), to advise the Chief Executive whether changes should be made to the criteria for the level of the remuneration for Members of the Executive Council and the Provisional Legislative Council after 1 July;
- to advise the Chief Executive on matters pertaining to the remuneration for Members of the first Legislative Council; and
- having regard to the recommendations in (a), (b) and (c) above, to advise the Chief Executive on the appropriate level of remuneration for those with multiple memberships on the Executive Council, Provisional Legislative Council.
14.The Chairman of the Independent Commission is Mr Wong Po Yan and its members are Professor Lau Siu Kai, Dr Thomas Leung, Mr Payson Cha, Mr Chan Bing Woon and Mr Anthony Wu.
Chief Secretary for Administration's Office
Note:The titles of the Head and Subheads will be subject to Members' approval of FCR(97-98)24 on adaptation of terms which Members will consider at the same meeting.
Note1:The total additional expenditure required, estimated on the assumption that all PLC Members would claim up to the maximum amount of their allowances, is $33.53 million. A total amount of $5 million has been advanced from Central People's Government (CPG) fund to allow PLC Members to meet operating expenses relating to their official capacity up to 30 June 1997 on the understanding that this is an interim arrangement pending a decision of the Independent Commission; and if the approved level of remuneration were to be less than the amount already reimbursed, Members concerned would pay back the excess. The supplementary provision we are now seeking is therefore $33.53 million less $5 million, or $28.53 million. We are seeking separately funds to reimburse the CPG for the advance, among others, of the $5 million, vide FCR(97-98)27.
Enclosure to FCR(97-98)26
Remuneration Package for Members of the Former Legislative Council
|President's Deputy and Chairman of House Committee||86,000
|Operating Expenses Reimbursement|
(up to the following maximum amounts)
|President's annual entertainment allowance||159,060
|Members' monthly accountable allowance for office and staff expenses||79,530
|Members' monthly entertainment and travelling expenses||13,250
|Members' additional accountable monthly allowance for office rental, rates, management charges and utilities||13,250
| Papers ]