Wednesday, 21 October 1998
The Council met at half-past Two o'clock






















































































PRESIDENT (in Cantonese): Members will please remain standing for the taking of the Legislative Council Oath. Mr FUNG Chi-kin.

The Honourable FUNG Chi-kin took the Legislative Council Oath

PRESIDENT (in Cantonese): On behalf of Members, I would like to welcome Mr FUNG Chi-kin to this Council.


The following papers were laid on the table pursuant to Rule 21(2) of the Rules of Procedure:

Subsidiary Legislation L.N. No.

Estate Agents (Licensing) Regulation


Estate Agents (Exemption from Licensing) Order


Estate Agents Ordinance (Cap. 511) (Commencement)
Notice 1998


Commodities Trading (Trading Limits and Position Limits)
(Amendment) Rules 1998


Securities (Exchange ─ Traded Stock Options)
(Amendment) Rules 1998


Toys and Children's Products Safety Ordinance
(Amendment of Schedule) Notice 1998


Sessional Papers

No. 39

The Land Registry Trading Fund Hong Kong
Annual Report 1997-98

No. 40

Agricultural Products Scholarship Fund Report for the
period from 1 April 1997 to 31 March 1998

No. 41

Marine Fish Scholarship Fund Report for the period
from 1 April 1997 to 31 March 1998

No. 42

Statement of Accounts for the Vegetable Marketing
Organization for the year ended 31 March 1998

No. 43

Statement of Accounts for the Fish Marketing
Organization for the year ended 31 March 1998

No. 44

Office of the Telecommunications Authority Trading
Fund Report for the period from 1 April 1997 to
31 March 1998

No. 45

Hongkong Post
Annual Report 1997-1998


Sub-letting of Housing Authority's Commercial Premises

1. MISS CYD HO (in Chinese): At present, private property management companies are hired by the Housing Department (HD) to manage shopping arcades in some public housing estates under the Hong Kong Housing Authority (HA), and these management companies are also responsible for leasing out shops in the shopping arcades to tenants. In this connection, will the Government inform this Council:

(a) whether the HD has asked these management companies to reassess the rental value of shops in the shopping arcades under their management and adjust the rent payable by the tenants concerned; if not, why not;

(b) how the HD ensures that these management companies have set the rent and other fees at a reasonable level; and

(c) how the HD follows up complaints from tenants against these management companies concerning the level of rent and other fees charged upon them?

SECRETARY FOR HOUSING (in Chinese): Madam President, like other commercial tenants of the HA, the rents being paid by single operators of the HA's shopping centres and markets are being reassessed at market level as at 1 July 1998 for the residual term of their tenancies. At the request of the HA, the Markets and Shopping Centres (Single Taker) Association, which represents single operators, has already to pass on all the financial benefits resulting from any rent reduction to their sub-tenants.

The objective of the single operator scheme is to offer an opportunity for more dynamic management of commercial premises. The operators can be more responsive to changing market demands and flexible in the deployment of resources, charging of rents and selection of sub-tenants. It will not be appropriate for the HA to intervene in the setting of rents which are commercial agreements between single operators and their sub-tenants.

The HA will refer any complaint from a sub-tenant about rent or other charges to the relevant operator for follow-up action, and will mediate in disputes where necessary.

Fees for Parking Spaces in Public Housing Estates

2. MR HUI CHEUNG-CHING (in Chinese): Regarding the car parking fees charged at shopping arcades in public housing estates under the management of the Hong Kong Housing Authority (HA), will the Government inform this Council whether it knows:

(a) the respective average rates of increase in fees for the various types of parking spaces in each of the past three years, and how the fee increases compare with those for parking spaces in private carparks; and

(b) the criteria adopted by the HA for determining the fees for the various types of parking spaces at shopping arcades in its public housing estates?

SECRETARY FOR HOUSING (in Chinese): Madam President, the average rates of increase in charges for the various types of parking space at shopping centres of the HA in the past three years, and their comparison with those for private car parks are:

Percentage of increase in parking charges

Private car











not available









not available






(up to




not available

The HA determines parking charges by reference to charges in private and government car parks, with the objectives of maximizing occupancy, encouraging patronage of shopping centres, maintaining uniformity within localities and offering concessions to the disabled.

Relocation of Yau Ma Tei Fruit Market

3. MR JAMES TO (in Chinese): It is learnt that the Government had originally planned for the completion of phase two of the Cheung Sha Wan Wholesale Food Market Complex (the Complex) within this year and then the relocation of the fruit market in Yau Ma Tei to the Complex. However, slippage in the construction works of the Complex has necessitated the deferment of the relocation date to the year 2004. In this regard, will the Government inform this Council:

(a) of the causes of the deferment of the completion date of the project;

(b) why the relevant departments had failed to prod for the completion of the construction works on schedule; and

(c) how it will ensure that the fruit market will be relocated in 2004?

SECRETARY FOR ECONOMIC SERVICES (in Chinese): Madam President,

(a) and (b)

Phase two of the Complex project was planned to be part of a private development, with the Government paying the developer for the cost of the wholesale food market component. It was the Government's intention to dispose of the site through open tendering. On this basis, in May 1997, the Finance Committee approved upgrading of the project to Category A of the Public Works Programme. The project was scheduled to be completed by the end of the year 2000. The completion date has been deferred because the sole tender received departed materially from the tender conditions and was rejected. Under such circumstances, the Government decided to implement the project by itself and has revised the scope of the project to optimize site utilization and improve market operation. Given the complexity of the works involved, the project is planned to be completed in 2004. We will seek the approval of the Finance Committee for funding of the revised project.

(c) The Government intends to relocate the fruit market in Yau Ma Tei as soon as phase two of the Complex project is completed. To avoid any slippage, the Government will set up a high-level steering committee comprising concerned bureaux and departments to monitor the implementation of the project. In addition, fruit market traders will be consulted on the general reprovisioning proposal, the new wholesale market design and ancillary facilities to be provided and so on. Their comments will be considered in finalizing the project details to ensure that the new wholesale market will meet their operational needs, thereby facilitating timely relocation of the fruit market to phase two of the Complex.

Government's Review on 17 Ordinances

4. MR ALBERT HO (in Chinese): During the Second Reading debate on the Adaptation of Laws (Interpretative Provisions) Bill at the Provisional Legislative Council meeting on 7 April this year, the Government made a commitment to review 17 Ordinances to decide whether there is justification for the difference in treatment under which these Ordinances are binding on the Government of the Hong Kong Special Administrative Region but not on the subordinate organs of the People's Republic of China. In this connection, will the Government inform this Council of the timetable of the review, which should include:

(a) the time for submitting the findings of the review to the relevant panel of this Council; and

(b) the time for introducing bills to this Council to amend the relevant Ordinances?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Chinese): Madam President, we fully understand Members' concern that the review of the 17 Ordinances should be completed as soon as possible. This is a complex exercise. We need to consider carefully both the legal implications, as well as the practical and public policy implications of the matter in order to decide whether any particular Ordinance should be amended. On the two points raised in the question:

(a) The Administration has already reported on the legal analysis of the 17 Ordinances under review to the Legislative Council Panel on Administration of Justice and Legal Services on 15 September 1998. We have also briefed Members of the Panel on the preliminary result of the review at the subsequent Panel meeting on 20 October.

(b) When the Administration has worked out the legislative proposals on how any of the 17 Ordinances should be amended, we will introduce the necessary amendment bills to this Council.

Vaccination Records of Newly Arrived Children from the Mainland

5. MR LAW CHI-KWONG (in Chinese): Will the Government inform this Council:

(a) of the respective numbers of newly arrived children from the Mainland who have been vaccinated at Maternal and Child Health Centres of the Department of Health (DH) and at schools in the past three years; and

(b) whether it knows the vaccination records of these children in the Mainland; if not, how it ensures that they are provided with proper vaccination service?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) The number of children who had newly arrived in Hong Kong (mostly from the Mainland) and were given immunizations at the DH's Maternal and Child Health Centres or, through invitations sent to schools, at the DH's regional health offices in the last three years are as follows:


1 962


2 536


4 802

(b) Before providing immunizations, DH staff would check the immunization record held by these children and provide them with necessary vaccinations to ensure that they receive the same package of immunizations as scheduled for other children in Hong Kong. Those who cannot produce records would be considered as not having been immunized, and given the necessary immunizations.

Children receive the immunizations on a voluntary basis. DH staff will obtain the prior consent of the parents before giving the vaccinations to the children concerned.

Complaints on Shortage of Containers and Inadequate Shipping Schedules

6. MR JAMES TIEN (in Chinese): It is learnt that quite a number of manufacturers and exporters have recently complained about the shortage of containers and inadequate shipping schedules. As a result, the required period for export goods to be packed into containers for shipment has been extended from the original one week to two months now. Moreover, the freight rates for shipping one 40-foot container from Hong Kong to the United States have risen from the original amount of US$1,800 to US$4,750. In view of such a situation, quite a number of overseas customers have turned to other areas to place orders for goods, resulting in direct impacts on the turnover volume of local manufacturers. In this connection, will the Government inform this Council whether:

(a) it knows the respective causes for the shortage of containers, the inadequate shipping schedules, and the sharp increase in freight rates; and

(b) it will consider adopting measures to help manufacturers and exporters solve the above problems?

SECRETARY FOR ECONOMIC SERVICES (in Chinese): Madam President, Hong Kong and Southeast Asian countries are generally facing the problem of a shortage of shipping schedules and an increase in freight cost. This is because the Asian financial turmoil and the depreciation of currencies by a number of Southeast Asian countries have resulted in a rapid increase in exports from Southeast Asia to Europe and the United States and a fall in imports on the part of Southeast Asia. The serious imbalance of trade has increased the operating cost of shipping lines and resulted in an increase in freight rate. The fall in imports also means that less containers are being shipped back to Southeast Asia and as a result many Southeast Asian ports, including Hong Kong, are experiencing a shortage of empty containers.

We have written to the two liner organizations, namely, Asia North America East Bound Rate Agreement and Far Eastern Freight Conference which are made up of the major shipping lines operating between Asia and the United States and Asia and Europe respectively, and requested them to provide assistance to Hong Kong shippers. The two organizations have replied that they understand the difficulties faced by Hong Kong shippers and will ask their members to assist Hong Kong shippers to the best of their ability in resolving the shortage of containers and shipping schedules problems.

Statistics on Land Grant

7. MR GARY CHENG (in Chinese): Will the Government inform this Council of the respective areas of land granted:

(a) under various categories of uses (including industrial, commercial, commercial/residential, community services, residential uses and so on); and

(b) by way of public auction, tender, Letter "A" and "B" Tender System and private treaty grant

in respect of each of the past five years?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Chinese): Madam President, in the five years from 1993-94 to 1997-98, the area of land granted by the Government:

(a) for residential, industrial, commercial, commercial/residential, public utilities, educational/welfare/religious/recreational and other uses is tabulated below:

Land Area (hectare)

Year Residential Industrial Commercial Commercial









































(b) by way of public auction, tender, letter A/B tender and private treaty grant is tabulated below:

Land Area (hectare)

Year Auction Tender Letter A/B
Private Treaty Grant
(including additional
area granted in land


























(Note: Disposal of land by Letter A/B Tender had been discontinued since June 1997.)

Damage to Drainage Systems by Private Developers

8. MR LAU WONG-FAT (in Chinese): With regard to the problem of damage to drainage systems in the New Territories caused by construction works undertaken in the region by private developers, will the Government inform this Council whether there is legislation providing for the imposition of penalty on the developers who damage drainage systems; if so, of the total number of successful prosecutions instituted over the past three years, together with the average penalty imposed on the convicted persons; if not, whether it will consider enacting legislation to provide for the imposition of penalty on the developers who damage drainage systems?

SECRETARY FOR WORKS (in Chinese): Madam President, as far as damage to public drainage systems is concerned, the construction works of private developments are normally confined within their own sites and there have not been many reported cases where public drainage systems are damaged in connection with such activities. Even when such damages are found or reported, it would be difficult to prosecute without relevant evidence or witnesses. So despite there being provisions under section 6 of the Public Health and Municipal Services Ordinance (Cap. 132) for prosecution against any person who wilfully or negligently damages public drainage systems, there has been no successful case of prosecution against private developers in this regard in the past three years in the New Territories. Notwithstanding, the damages found or reported were properly repaired in appropriate time.

Taking damages as including also functional damages such as obstruction or blockage of watercourses or other public drainage systems, relevant ordinances besides the above which also impose penalties on persons causing the damages include the Summary Offences Ordinance (Cap. 228), Water Pollution Control Ordinance (Cap. 358) and the Land Drainage Ordinance (Cap. 446). Since 1995 up to 31 August 1998, some 16 prosecutions were successfully instituted against the discharge of substandard muddy effluents from private developers' works sites into public drainage systems in the New Territories. The average fine of these cases is around $27,000.

Amendment to the Occupational Retirement Schemes Ordinance

9. MISS CHAN YUEN-HAN (in Chinese): While the Mandatory Provident Fund Schemes Ordinance (MPFSO) (Cap. 485) provides that a default on payment of contributions to the Mandatory Provident Fund (MPF) schemes will constitute a debt due and payable to the Mandatory Provident Fund Schemes Authority (the Authority), and the Authority may recover those arrears in accordance with the relevant provisions, the Occupational Retirement Schemes Ordinance (ORSO) (Cap. 426) does not have similar provisions for the recovery of such arrears. In this connection, will the Administration inform this Council whether it will consider amending the relevant provisions in the ORSO, so as to bring them in line with the relevant provisions in the MPFSO; if so, what the details are; if not, why not?

SECRETARY FOR FINANCIAL SERVICES (in Chinese): Madam President, the MPFSO (Cap. 485) provides that any contribution arrears in respect of the MPF schemes will constitute a debt due to the Authority, and the Authority may recover those arrears in accordance with the relevant provisions.

Consequent upon the enactment of the Provident Fund Schemes Legislation (Amendment) Ordinance 1998 (the Amendment Ordinance), similar provisions on contribution arrears are introduced into the ORSO (Cap. 426). Such provisions will apply to the future MPF exempted ORSO registered schemes. It is believed that the majority of the registered ORSO schemes will apply to the Authority as MPF exempted schemes. As regards the small number of remaining schemes, they should be top-up schemes providing benefits in addition to those of the MPF schemes. These schemes are voluntarily established by the employers. If there are contribution arrears, the employers and employees can resolve the matter in the manner as agreed among themselves. The employees may also institute civil recovery proceedings against the employers for contribution arrears. Furthermore, any illegal deduction of relevant contributions from the employees' payroll is a criminal offence under the Employment Ordinance (Cap. 57).

The Administration is of the view that appropriate amendment has been made to the ORSO by the Amendment Ordinance to deal with contribution arrears of employers. Hence, no further amendment in this respect is considered necessary.

Cases on Cessation of Receiving CSSA

10. MR ERIC LI (in Chinese): Will the Government inform this Council of the number of cases in which recipients ceased receiving Comprehensive Social Security Assistance (CSSA) in each of the past three years; please give a breakdown of the cases according to the reasons for applying for CSSA and those for cessation of receiving CSSA?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President, the number of CSSA cases closed in the past three years is classified by reasons for cessation as follows:

Reasons for cessation

ending July 1996

ending July 1997

ending July 1998


7 768

8 470

9 707

Lost contact

3 679

5 012

5 203

Self withdrawal

3 924

5 362

6 769

Absent from Hong Kong




Assets exceeding limit




Having resources greater than
recognized needs




(for example, being in prison, refused to provide information upon review)

1 597

1 836

1 864


17 472

21 047

23 914

We however do not classify closed cases by reasons for applying for CSSA.

Seven Measures to Strengthen the Currency Board System

11. MR SIN CHUNG-KAI (in Chinese): It is learnt that the Hong Kong Monetary Authority (HKMA)'s seven measures to strengthen the currency board system had been on the drawing board for quite a while. However, considering external factors and objective circumstances, the HKMA announced and implemented the measures only after the Government had ceased intervening in the stock and futures markets. In this connection, will the Government inform this Council:

(a) when the HKMA started and finished working out the seven measures;

(b) of the external factors and objective circumstances involved;

(c) of a detailed comparison of such external factors and objective circumstances before and after the Government's intervention in the markets; and

(d) whether it has assessed what consequences might have arisen if the seven measures had been implemented by the HKMA before or during the Government's intervention?


(a) The HKMA has been constantly strengthening the currency board arrangements in Hong Kong in the light of changing market conditions. The seven technical measures introduced in early September were part of HKMA's ongoing efforts to enhance the resilience and robustness of the linked exchange rate system. Some of these measures had been considered previously as contingency measures. But as we will explain in part (b), these measures have certain downside risks and the market conditions before August 1998 did not justify their introduction. When there was clear indication of double market play in the August episode threatening systemic stability, the Administration immediately launched market operation to dampen manipulation activities and at the same time proceeded to finalize the proposals. We consulted the Exchange Fund Advisory Committee (EFAC) on 4 September and with its endorsement, announced the measures on 5 September.

(b) The seven technical measures have both advantages as well as disadvantages. For example, while the measures would dampen interest rate volatility in the event of capital outflows, it could possibly be misinterpreted by the international financial community as a sign of Hong Kong's unwillingness to bear the pain of interest rate adjustments under the currency board discipline. This would in turn undermine the market's confidence in the Linked Exchange Rate. Moreover, there could be greater volatility in the level of official foreign reserves. Making explicit the passive convertibility of the Aggregate Balance of the banking system into US dollars may also dampen activity in the foreign exchange market. The measures could also, to some extent, affect the development of the Hong Kong debt market. In considering when to implement these measures, the Administration has to assess whether they are necessary to achieve our aim of maintaining the stability of the monetary and financial systems, in the light of the latest developments in the market and external factors.

The circumstances prior to the August 1998 did not justify the introduction of the seven technical measures. In the first place, there was no clear indication of double market play before the August episode. Secondly, in the previous speculative attacks, most of the market manipulators had not acquired sufficient Hong Kong dollar beforehand. Hence the rise in interest rate under the auto pilot mechanism of the currency board system effectively fended them off. Thirdly, the HKMA introduced two measures prior to August 1998 to facilitate a more orderly and efficient interest rate adjustment and prevent an overshooting of market reaction to changes in the liquidity conditions. They included the clarification of the definition of repeated borrowers in the access to the Liquidity Adjustment Facility in November 1997 and the announcement of the forecast changes in the level of interbank liquidity since June 1998. These measures helped to reduce excessive interest rate volatility. The one-month Hong Kong dollar interbank rate only stayed above the Best Lending Rate for 10 days after the attack in January 1998 and for only three days in June 1998.

(c) In late July this year, pressure on the Asian financial markets intensified. The yen fell to a new low of 147 against the US dollar and there was growing instability in Russia and Latin America. There were also widespread rumours of imminent depreciation of the Renminbi and delink of the Hong Kong dollar. Unlike the earlier episodes, the market manipulators had acquired sufficient Hong Kong dollars beforehand by swapping US dollars through intermediaries with multilateral institutions which had issued Hong Kong dollar debt paper (such issues amounted to over $30 billion up to end of July this year). On the securities side, the cash market was very thin while the stock index futures market grew disproportionately. Against such unusual circumstances, had the Government not acted to frustrate the double market play of the hedge funds, there would have been serious dislocations in the securities market and a sustained period of excessively high interest rates.

Through the market operations, the Government has successfully forced the market manipulators to leave the markets. The securities and futures as well as money markets also stabilized. To follow through the market operation, we had immediately implemented the package of technical measures to strengthen the defence against market manipulation.

The money and equity markets continue to stabilize after the introduction of the seven technical measures on 7 September. Interbank interest rates have eased substantially across the board. The one-month interbank rate has eased from 10.5% on 4 September to 5.25% on 20 October. The Hang Seng Index has also rebounded sharply from 7 489 to 9 642 in the same period.

(d) Given the rapid deterioration in market conditions as explained in part (c), we do not believe that the package of measures alone would turn around market sentiment and obviate the need for the Government's operations in the stock and futures markets. The possible downside risks of the seven technical measures have been explained in part (b). More importantly, had the measures been introduced before or during the market operations, the international financial community might have conjectured that we were not determined to bear the interest rate pain under the currency board discipline, thus weakening their confidence in our commitment to maintaining the link. This is contrary to the ultimate objective of introducing these measures ─ strengthening confidence in our system.

Supervision of Air-conditioned Bus Services

12. MR LEUNG YIU-CHUNG (in Chinese): Regarding the supervision of air-conditioned (AC) bus services provided by franchised bus companies, will the Government inform this Council:

(a) of the current number of routes throughout the territory that are served entirely by AC buses;

(b) of the criteria for deciding on the routes which are to be served entirely by AC buses; and

(c) whether it will discuss with the bus companies the adopting of the following measures during autumn and winter time:

(i) adjusting the temperature inside the AC buses to a suitable level;

(ii) adjusting AC bus fares to the level of fares to be charged if the same routes are served by non-AC buses; and

(iii) using non-AC buses to operate some of the scheduled trips, so that passengers can have a choice?

SECRETARY FOR TRANSPORT (in Chinese): Madam President, at present, 163 out of a total of over 380 regular bus routes in the territory are served entirely by AC buses. In drawing up the AC bus deployment plan on individual routes, the bus companies take into account passenger demand and public acceptability, obtained through market research, complaints and suggestions received through various channels, and consultation with the Traffic and Transport Committees of District Board (DBTTCs). In addition, priority is given to bus routes operating in tunnels in order to provide passengers with a quiet and clean environment for travelling.

To address passengers' concern about the temperature inside AC buses, the bus companies set different temperatures for different seasons. To cater for individual needs, some AC buses are equipped with controllable air outlet nozzles near the seats which can be adjusted by passengers.

AC buses provide a quiet and clean environment all year round. In addition, the newer AC bus models are designed to provide warm air in winter months. Operating costs of AC buses in winter are no different from that in summer. It is therefore not appropriate to charge non-AC fares on AC buses in winter. If lower fares are charged in winter, this will have an upward pressure on fares in summer.

It is not practicable to keep a number of non-AC buses just for deployment on AC routes during winter. In addition to the need to have sufficient parking and maintenance facilities for the additional buses, it is also inefficient use of bus resources. As indicated above, DBTTCs are consulted on the deployment plan of AC and non-AC buses on individual routes in the context of the Bus Route Development Programme every year. The existing AC bus routes have been implemented in response to local views and preference.

Phase 1 of the Tenants Purchase Scheme

13. MR TAM YIU-CHUNG (in Chinese): Regarding Phase 1 of the Tenants Purchase Scheme, will the Government inform this Council of:

(a) the number of offers submitted with the intention money to the Hong Kong Housing Authority (HA) so far, and the respective numbers of offers which have been accepted and of households which have completed assignments;

(b) the number of cases received by the HA so far in which the relevant households have made a request for repairs to the interior of their flats, and among these, the number of cases in which repair works have been completed; and

(c) the average time taken to complete the repair works mentioned in (b) and in the measures in place to expedite such repair works?

SECRETARY FOR HOUSING (in Chinese): Madam President, Phase 1 of the Tenants Purchase Scheme (TPS) comprising 26 896 flats was launched in January 1998. The first assignment was completed in mid-April 1998. As at 9 October 1998:

Number of offers received
(with Intention Money paid)

16 500


Number of offers accepted by the
Housing Authority

15 500


Number of assignments executed

14 150


Between 1 January and 30 September 1998, the HA received requests for repair work in 9 459 flats included in Phase 1 of the TPS, of which repair work for 8 880 flats have been completed to the satisfaction of tenants/owners. The majority of the remaining 579 cases were received in August and September 1998, and they are being processed by the Housing Department.

The time taken to complete repairs varies. For defects with health or safety implications, urgent repair orders were issued to ensure rapid completion. Non-urgent cases were completed within four to six weeks. In a few cases, completion was delayed owing to difficulty in gaining access to flats, or the lead time needed to order new materials.

To expedite action as a result of bunching of workload, the Housing Department introduced special measures, including:

(i) deployment of additional site staff;

(ii) staff working overtime and on Sundays and public holidays; and

(iii) more stringent supervision of the performance of contractors in handling requests for repair work.

Errors in Subtitles of Television Programmes

14. MR ERIC LI (in Chinese): Will the Government inform this Council:

(a) whether it has noticed that wrong characters or words are often found in the Chinese and English subtitles of local television programmes; if not, what the reasons are; and

(b) how it will urge the television broadcasters concerned to take actions so as to avoid making such mistakes?


(a) The existing Television Ordinance, television broadcasting licences and television Codes of Practice do not require the licensees to provide subtitle services for the programmes they broadcast. The language standard of these services therefore falls outside the jurisdiction of the Broadcasting Authority. For news or factual programmes, however, should the mistakes in the subtitles constitute inaccuracies in the programme content, the Television and Entertainment Licensing Authority (TELA) can take follow-up action according to the standards set for these programmes.

(b) The TELA liaises closely with the broadcasting licensees, and conveys to them the views of the audience on television programmes.

Quality and Safe Tour Service

15. MR HOWARD YOUNG: It is learnt that a large number of one-day tours to the new airport at Chek Lap Kok are organized by travel agents. As no licence is required of travel agents organizing tours within Hong Kong, will the Government inform this Council:

(a) of the measures in place to ensure that the participants in such tours are given quality and safe tour service;

(b) given that Hong Kong residents joining local tours seldom take out personal travel insurance, of the party which could be held responsible for paying out compensation in respect of any mishap happening during these tours; and

(c) of the progress of the review on the regulation of inbound travel agents?


(a) Tours within Hong Kong could be organized by a number of parties. These may include outbound travel agents licensed by the Registrar of Travel Agents, inbound travel agents, the Hong Kong Tourist Association (HKTA), members of the HKTA and other parties who may do so on an ad hoc basis.

To strengthen protection for persons taking part in tours within Hong Kong, the Travel Industry Council of Hong Kong is in the process of drawing up a code of practice for its inbound travel agent members.

For organized tours operated by the HKTA, all participants are insured for group personal accident and public liability. The HKTA also conducts regular tour inspections of all local sight-seeing tours run by its members.

Although there is no across-the-board legislation to regulate the operation of local tours by travel agents, consumers' interests in the course of general transactions are protected by various pieces of legislation, such as the Control of Exemption Clauses Ordinance and the Supply of Services (Implied Terms) Ordinance. The Consumer Council may also provide assistance and advice. Residents and tourists alike should, however, exercise due care in choosing local tour packages, taking into account the past performance and reputation of the organizers as well as seeking advice from the concerned organizations as appropriate.

(b) Depending on the actual circumstances and the kind of "mishap" involved, the party who could be held responsible for paying out compensation in respect of any mishap happening during local tours in Hong Kong could include:

(i) the travel agent, if there is an agreement (by way of a contract between the travel agent and the participant) to this effect;

(ii) the participant, if he is himself solely or partially at fault in causing the mishap;

(iii) the occupier of the premises concerned, if the mishap is caused by the state of the premises or things done or omitted to be done there; or

(iv) the insurers from whom a travel insurance policy has been taken out to cover the mishap at the material time.

(c) In consultation with the HKTA and the tourist industry, the Government is in the process of examining the need for regulating inbound travel agents in Hong Kong. The Government hopes to complete the review by end of the year.

Cost-effectiveness of Special Seafarers Training Programme

16. DR DAVID LI: It is reported that more than half of those persons enrolled in the first course of the special seafarer training programme for the unemployed were not interested in becoming seafarers but were interested in the retraining allowance only. In this connection, will the Government inform this Council what measures it will take to enhance the cost effectiveness of the programme?

SECRETARY FOR EDUCATION AND MANPOWER: Madam President, the first 14-week course of the Special Seafarer Training Programme for Maritime Industry, run by the Vocational Training Council (VTC) jointly with the Employees Retraining Board (ERB), started on 9 September 1998 with 21 trainees. The course will be completed on 16 December 1998. These trainees receive an allowance of $4,000 per month from the ERB.

The trainees of the course have been making good progress. There is no evidence on the basis of their performance and behaviour in class to indicate that they lack the motivation in becoming a seafarer and are only interested in the retraining allowance.

The VTC has been closely monitoring the cost effectiveness of the course. It has exercised special care in the recruiting exercise to select trainees who demonstrate an interest and willingness to embark on a seafaring career on completion of the course. Tutors at the VTC's Seaman's Training Centre have been collecting feedback from the trainees to improve the delivery of the course. They also provide counselling for the trainees to facilitate learning. The VTC is liaising closely with the Hong Kong Shipowners Association and potential employers to secure job placement for the trainees.

Progress of the Enhanced Native-English Speaking Teachers Scheme

17. MR YEUNG YIU-CHUNG (in Chinese): Regarding the progress of the "Enhanced Native-English Speaking Teachers Scheme", will the Government inform this Council:

(a) of the number of native-English speaking teachers (NETs) originally planned to be recruited in this school year, together with the respective numbers of such English teachers recruited so far by the Education Department (ED) centrally and by schools individually;

(b) given that schools having such English teachers are allowed to hire substitute teachers when these teachers fall sick or have resigned during the agreement period, whereas schools which have been unable to recruit such English teachers are not allowed to hire substitute teachers in the interim, of the reasons for the authorities concerned adopting different policies in this regard; and

(c) of the estimated time for the completion of the recruitment of such English teachers?


(a) For the 1998-99 school year, we planned to recruit a total of 447 NETs for 415 secondary schools. Up to now, 335 NETs have been recruited, of which 192 were recruited through the ED and 143 were recruited directly by individual schools.

(b) Schools which have not yet been able to recruit a NET may apply through District Education Officers to employ a temporary teacher until a NET is recruited. However, the school must be satisfied that the temporary teacher's standard of English is native-speaker like.

(c) The ED began its second round recruitment exercise in mid-September 1998, aimed at providing an additional 70 NETs to be in post for the second school term of 1998-99 school year and the beginning of 1999-2000 school year. In addition, around 40 NETs will be recruited by schools which have opted for conducting their own recruitment.

Assessment of Non-local University Degree Qualifications

18. MR CHEUNG MAN-KWONG (in Chinese): Regarding assessment of non-local university degree qualifications, will the Government inform this Council of:

(a) the respective numbers of non-local degree holders who have been employed in the past three years as graduate teachers or to take up government posts whose minimum academic qualification is a university degree (please give a breakdown of the institutions from which these degree holders graduated, their years of graduation and major subjects);

(b) the criteria adopted by the Administration for assessing the relevant qualifications; and

(c) the mechanism in place for the relevant parties to lodge appeals against the assessment results; and the mechanism through which the Administration reviews the relevant assessment results?

SECRETARY FOR THE CIVIL SERVICE (in Chinese): Madam President, first of all, let me clarify that the Government will not interfere with the acceptance of qualifications by individual tertiary institutions or employers for the purpose of admission or employment.

The answers to the specific questions are as follows:

(a) We have not kept statistics on the qualifications of appointed graduate teachers or civil servants appointed on the basis of degree qualifications. Appointment to the Civil Service is based on local qualifications. Any qualifications obtained outside Hong Kong held by civil service job applicants would be subject to qualification assessment to determine whether the applicants meet the qualification required for the posts they applied for. If the qualification requirements are met, the Government will not categorize the origins of their qualifications.

(b) The Civil Service Bureau co-ordinates the assessment of non-local academic qualifications for civil service appointment purposes. Assessment is conducted on a case-by-case basis for individual civil service job applicants to determine whether the non-local qualifications held by the applicants are comparable in standard to the local qualifications required for entry to the civil service posts concerned. Assessment is based mainly on the advice from accreditation authorities. Since 1995, the Hong Kong Council for Academic Accreditation is our main adviser on assessment of non-local qualifications.

(c) At present, any civil service job applicants who have doubts on the outcome of qualification assessment or have further information to provide in respect of their qualifications may approach the recruiting department or the Civil Service Bureau. We will seek further advice from accreditation authorities to review the assessment of the case.

Procurement of Notebook Computers for Primary Schools

19. MISS EMILY LAU (in Chinese): It is reported that recently, in purchasing a batch of notebook computers intended for use in primary schools as a teaching aid, the Education Department (ED) has procured an unsuitable kind of convertor, rendering the information input into the computer by teachers not being clearly displayed on the computer monitor and television (TV) screen simultaneously and thus affecting the progress of teaching. In this connection, will the Executive Authorities inform this Council of:

(a) the cause for the mistake in that procurement exercise;

(b) the total amount of funds involved in purchasing the entire batch of computers and the related accessories; and

(c) the remedial measures that will be taken and the estimated relevant cost?


(a) The purpose of providing primary schools with TV signal convertors is to facilitate teaching by enabling teachers to project the screen of a computer onto a TV screen. When the ED invited tenders in October 1997 in procuring computers for primary schools, stand-alone signal convertors (which did not require external A/C sockets) were available in the market which would enable concurrent display on the computer monitor and the TV screen when used with desktop computers, but the images would only show up in either medium when used with notebook computers. At the time, there was one A/C type signal convertor which would enable concurrent display on both the computer monitor and the TV screen, irrespective of whether the computers were desktop or notebook. However, this A/C type signal convertor has to be connected to an A/C socket when it is used. To a certain extent, this would restrict where the notebook computers could be placed inside a classroom. Having considered the pros and cons of the two types of convertors, the ED decided to procure the stand-alone signal convertor.

(b) Of the stand-alone signal convertors purchased by the ED, 2 145 were to be used with notebook computers. The cost involved was $793,650.

(c) Since notebook computers can be flexibly located, teachers can choose to place their computers at locations where they can key in information into the computer and see the TV screen at the same time, that is, teachers can use the TV screen as the computer monitor. If individual schools wish to have concurrent display of images on a computer monitor and a TV screen, they can purchase the A/C type signal convertors (each costing about $700) to replace the stand-alone convertors, by making use of the recurrent grant provided by the ED. The stand-alone convertors can be used with the desktop computers to be purchased by the schools shortly.

Assistance to New Arrivals from the Mainland

20. MR LAW CHI-KWONG (in Chinese): Regarding the assistance provided by the Social Welfare Department (SWD) to facilitate the integration of new arrivals from the Mainland into the community, will the Government inform this Council:

(a) of the respective numbers of new arrivals from the Mainland invited to and participated in the social activities organized by the Family Activities and Resource Centres, Group Work Units and Youth Offices under the SWD in their localities last year; and

(b) whether the SWD has analysed the relevant data collected by its data-collection system to identify the problems faced by these people and their need for welfare services; if so, of the findings of such analysis and whether consideration will be given to publishing the findings on a regular basis?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) Between July 1997 and June 1998, attendance by new arrivals, defined as persons residing in Hong Kong for less than one year, in programmes organized by the Family Activities and Resource Centres, Group Work Units and Youth Offices of the SWD, was approximately 37 000.

(b) Since October 1996, the SWD has collected statistics on the number of new arrivals who receive welfare services or attend programmes organized by these SWD service units and non-governmental organizations. The data is distributed to welfare agencies, through the Hong Kong Council of Social Services, to facilitate their provision of services for new arrivals. The information collected assists the SWD and welfare agencies to identify the nature and extent of problems faced by new arrivals and is used to assess the demand for various services.

In this connection, the SWD also makes reference to surveys conducted by the Home Affairs Department and the Immigration Department, as well as studies carried out by welfare agencies to gauge the service needs of new arrivals.


PRESIDENT (in Cantonese): Members' motion. Motion of Thanks. Dr LEONG Che-hung.


DR LEONG CHE-HUNG: I move that this Council thanks the Chief Executive for his address.

Let me state first that I am moving this motion not in my own name but in the name of the House. The Motion of Thanks is a traditional gesture for most parliaments and definitely a convention for this one. It provides a forum for Members to comment on the state of the region, address it, praise it, criticize it, cut it down if you will, and for Members to forward their own input on how they feel best for the running of Hong Kong as representatives of the people of Hong Kong. In short, the wording aims to introduce a non-directional motion for Members to express anything under the sun.

As I understand, there are a few Honourable colleagues who have indicated that they would introduce amendments. This, of course, Madam President, is well within the remit of our Rules of Procedure. Yet, such action I would not condone, for any amendment will impose a direction on a non-directional motion. I will address this more later.

Distant mirage cannot soothe immediate wounds

Madam President, the general impression of the policy address is that it is dull, lacking lustre would be the proper words. Obviously, in these economic times, it would be foolhardy to expect too much, but it is exactly in these times that the public needs a sign of leadership, a booster, a sparkle in the way forward to maintain and retain their confidence.

Some have said that the policy address is visionary, after all, it makes proposals for hopeful implementation in future decades. To wit, much emphasis has been placed on the initial suggestions of the Commission on Innovation and Technology, suggesting that Hong Kong should position itself to be a leading city for information technology, a world-class design and fashion centre, a world centre for health food and Chinese medicine and so on. A rosy picture has thus been painted, and rightly so, as vision is what policy address is all about.

Yet, such distant mirage will not soothe the wounds inflicted by the economic nose-dive. Nor will these and the call by the Chief Executive for workers to persevere fill the empty stomachs left by the all-time record unemployment rate.

Madam President, in the last few days, due to a multiplicity of factors, the Hong Kong stock market has rocketed and the property market seemingly has come out of its hibernation. Yet, let me sound a word of warning to our financial chiefs that this is no time to claim credit, for the optimism could be short-lived and be another quick bubble. Unless and until the Government is serious in increasing the diversity of the economy by creating conditions for growth in sectors with high value-added elements, in particular, in industries basing on high technology and multi media application and not confining our economy only to the financial and service industries and our property market, the expanding bubble will not sustain.

Public's ailing confidence in governance

Madam President, since the policy address has been delivered, surveys were being done which sadly portraited the falling confidence in the Chief Executive and our Government. Such ailing confidence in governance is an element that this Council and the public are most concerned.

In my mind, there are three essential factors: (1) the insincere approach to the problems plagued the relationship between the legislature and the executive authorities; (2) the complete lack of self-criticism, self-assessment and self-censorship on the part of the Administration on the many sagas that had become international laughing stock; and (3) the resistance of the Chief Executive in bringing forward a blueprint for constitutional development in Hong Kong. Let me elaborate.

Relationship between the Legislative Council and the executive authorities

That the legislature and the executive authorities are not sounding a cord of unison is obvious to all. Examples abound that the Administration has shown a total lack of understanding if not respect, of the work and constitutional position of this legislature. On two occasions in 1998, Members of the legislature have spoken extensively on the relationship, or the lack of it.

Yet, in spite of the increasing pleas of this Council for the Administration to come up with solutions to mend such a failing relationship, the Chief Executive gently brushed away the issue ─ commenting that channels exist for communication between these two tiers of government and hope that a better working relationship will follow. Such nonchalant response by the head of the executive authorities symbolizes either the lack of understanding of the rapidly widening chasm of the working relationship between the executive authorities and the legislature; or, worse, the lack of concern for this very much needed relationship that is so vital for proper governance.

Lacking of self-assessment

1998 has been a bad year for Hong Kong. Our health scene has been scandalized by the emergence of the avian flu; our economy has tumbled at an unprecedented rate; our supposed pride and joy ─ the new airport ─ became an international laughing stock. It may well be said that some of these disasters are unavoidable: the financial crisis is part of a global economic nose-dive; and the avian flu might well have been "imported" from the Mainland.

Yet, is our Government completely absolved from blame? Could some of the happenings be averted if our civil servants were more alert to the changing situations? Could the magnitude of the disasters be reduced if our civil servants worked in better co-ordination? Could the damage be minimized if there was better leadership? The least the Administration could do would be to take on a self assessment, to accept a portion of the blame, and to take stock of the lessons learnt to improve performance for the future. This is what any responsible government is expected to do. This is how public confidence in the Administration could be sustained and improved.

Regrettably, such were not the virtues of our bureau chiefs nor were they forthcoming in the policy address. Instead, the Chief Executive gave the thumb-up sign of approval saying, for example, in the avian flu saga, that "do not forget, we finally got rid of the bird flu, and have got the approval from international bodies".

Professional ministers for better governance

But is the Chief Executive that oblivious to the shortfalls of the Administration? Some have taken comfort from the reshuffle of top civil servants so soon after the policy address as a positive sign that Mr TUNG is not only well aware of the situation, but is also taking leadership in amending the flaws. Let us hope that the recent reshuffle is not just a routine musical chair but rather a move to skimp out the weed and improve the efficiency of our still very much respected Civil Service.

Yet, this is not quite far from enough. Yes, our administrative officers have often demonstrated that they can assume "overnight experts". Yet, there is a deficiency of professional expertise and market experience so very much needed to face crises and to come out with in-depth solutions.

Furthermore, whilst our Civil Service consistently vow their political neutrality, the fact that top civil servants formulate policies, stand by such political decisions and lobby for their support has made a farce of their "neutral" stand. In short, our senior civil servants are "ministers" in their work with no public mandate, but civil servants in their appointments and responsibilities. Madam President, such constitutional establishment might work well in the old colonial days; but is such a legacy the best dichotomy for modern Hong Kong?

Madam President, I have called for, in this Chamber, many times, constitutional reforms. Yet, unlike some of my Honourable colleagues, it extends beyond universal suffrage for the legislature and the Chief Executive. It includes a total restructure of the different tiers of government to suit us now that we are masters of our own house.

It might, therefore, be appropriate for the Chief Executive to bring in "fresh air" and "professional expertise" to his constitutional structure by considering political appointment for ministers. Let the best man be appointed for the job instead of relying on outdated mechanism of seniority exercise.

The next-to-be established bureau on food and environmental hygiene, if it is a must, may well be a pilot study to introduce a minister with professional expertise.

Lack of new initiatives in health care

Madam President, I would now like to say a few words on the policy address on health care, or the lack of it. Madam President, my constituents and myself are downright saddened by what has so been delivered. Yes, we are saddened because no new initiatives are forthcoming, but we are more disappointed by the way and attitude that the Government is and has been using to procrastinate and to pull wool over the public's eyes.

Let me advise our health chiefs that the clichés of "Hong Kong people enjoy a health status that is amongst the best in the world, our infant mortality rate is a low four per 1 000 live births, life expectancy is long, ......" have been used ad nauseam and will not bring public confidence.

Let me advise our health care chiefs that the in-house training of 4 000 doctors, 7 000 nurses and
3 000 allied health care professionals in the public sector ─ so much highlighted in the policy directives of the Health and Welfare Bureau ─ has been an on-going issue for umpteen years, well before the days of the Hospital Authority. It will continue into the future through the yearnings for professional learning of the staff and goodwill of senior colleagues, with no extra funding from the Government whatsoever. All these do no credit to the Government. Instead, it demonstrates either the Government's lack of understanding of the underlying problems of our health care system, or, even worse, the lack of concern to the trials and tribulations that the staff are facing.

Overloading in public health care sector

Similarly, to say that we will reduce our year long medical blunders through improving the clinical audit and risk management system of the Hospital Authority signifies refusal to acknowledge the core issue that staff are overworked and adds to the sense of betrayal of the staff by the Administration.

The directive given in the policy address for a 5% productivity gain in departments and agencies posed further worries on our already over-stretched staff. Productivity gain is a good move for the Civil Service. Yet, do not forget that the Hospital Authority has embarked on the exercise since its inception and has by now accumulated over 7.5%. Any further squeeze on this organization would be whipping a dying horse to the demoralization of the staff.

Dire need for overall health policy review

Madam President, in short, the problem with the Hong Kong health care system is the result of our out-dated health care policy which needs to be totally reviewed. The health care professionals have called for it for over a decade. Yet, we are hitting our heads against a stone wall. Let me remind the Administration that the most recent health care policy paper is of 1974 vintage ─ 24 years ago.

Yes, we should be grateful that there will be an addition of some 853 hospital beds and an upgrading of the Pok Oi Hospital. But by just looking at the trees, we will not have a total picture of the forest.

The Government will, I am sure, rebut to say that a review is underway and that a consultant is working hard towards this goal. But, do not be misled. This review, by this consultant, is on health care financing and the total remit of health care and public health policy review is still very much wanting. Moreover, even for the review on health care financing, the policy address has even failed to indicate its direction, hiding behind the usual procrastination excuse that "the report is still in progress".

It is high time, now that we are masters of our own house, that we should devise a workable system tailor-made for Hong Kong to suit the changing times and changing needs, and to ensure that the best of health care for all is not only made possible but sustained. This is what the Hong Kong people deserve.

Hoping for constructive comments and responses

Madam President, I have no crystal ball to gaze at the result of this traditional debate. Whatever this outcome, there will be comments, criticisms and suggestions by Members of this Council, reflecting Hong Kong's needs. Let us hope that these comments and criticisms are constructive in nature. Let us hope, too, that our Administration will look at these criticisms and comments not as tools to penalize, but ways to bring in improvements. After all, we must all be working for the betterment of Hong Kong, this we have all pledged when we took up office.

With these remarks, Madam President, I so do move.

Dr LEONG Che-hung moved the following motion:

"That this Council thanks the Chief Executive for his address".

PRESIDENT (in Cantonese): I now propose the question to you and that is: That this Council thanks the Chief Executive for his address.

PRESIDENT (in Cantonese): Rule 13(3) of the Rules of Procedure provides that amendments to the Motion of Thanks may be moved without notice. The House Committee has, however, agreed that Members should give notice of amendments to the motion, preferably before 14 October. Accordingly, the Honourable LEE Cheuk-yan, the Honourable Miss Christine LOH and the Honourable Martin LEE have separately given notice to move amendments, and Members have been informed of these amendments by circular on 16 October. The amendments have also been printed on the Agenda.

PRESIDENT (in Cantonese): Do any other Members wish to move amendments to the motion?

(No Member responded)

PRESIDENT (in Cantonese): As no other Member wishes to move an amendment to the motion, I propose that no further amendment shall be admitted for the purpose of this debate. Do Members agree?

(No Member raised objection)

PRESIDENT (in Cantonese): No Member raises objection. I declare that this Council has decided that no further amendment shall be admitted for the purpose of this debate.

PRESIDENT (in Cantonese): Council shall now debate the motion and the amendments together in a joint debate. According to the order in which the three Members submitted their notice of amendments, I will first call upon Mr LEE Cheuk-yan to speak, to be followed by Miss Christine LOH and Mr Martin LEE; but no amendments are to be moved at this stage. Members may then debate the motion and the amendments. Mr LEE Cheuk-yan.

MR LEE CHEUK-YAN (in Cantonese): Madam President, earlier on, I have, in concert with four other Legislative Council Members representing the Frontier, the Hong Kong Confederation of Trade Unions (CTU) and the Neighbourhood and Workers Service Centre, requested the Chief Executive to make a public statement in the policy address acknowledging the various administrative blunders of the Government of the Hong Kong Special Administrative Region (SAR) in the past year, review its policies and put forward improvement measures to restore public confidence in the Government; and otherwise, we will move an amendment to the Motion of Thanks, expressing our regrets to the policy address.

In expressing our regrets to the policy address, our purpose is not to lay the blame on the Chief Executive for all the blunders. Nor is it our intention to make life difficult or to embarrass the Chief Executive. Rather, we do so out of our high expectations of the Government, hoping that it will conduct a review seriously. In regard to today's motion of regrets, if we put it in the jargon of the Chief Executive's favourite sport, football, it is that we hope the Administration will form a 5-3-2 political line-up for Hong Kong.

From this 5-3-2 line-up, we can see that the SAR Government is all-defensive and the worst player is our goalkeeper, the Chief Executive, who always stands in the wrong position — behind the goal — watching the ball fly into the goal. How can the citizens who are watching the game have any confidence in the Chief Executive?

The thrust of this motion of regrets is the confidence crisis. The Chief Executive's policy address has not only failed to restore our confidence but even pushed it further to the bottom. Mr TUNG should be well aware that while he was attending the question and answer sessions on the electronic media, the live telephone survey, Mass Calling, revealed that after the policy address was published, the percentage of people who had less confidence in the future kept rising until it reached the record high of 56%.

In concluding his policy address, the Chief Executive said, "The most crucial factor now is our own confidence." He tried to move the people with a 30-year rose garden of science and technology in the hope of raising the people's hope in the future. However, he did not quite appreciate their anxieties. I hope that he will review the famous line of KEYNES, "In the long run, we are all dead." Our Chief Executive has stood in the wrong position and shattered the people's fragile confidence once again.

What have affected the people's confidence directly are the five administrative blunders in our defence.

First, the Education and Manpower Bureau estimated in December last year that there would be a shortfall of up to 10 000 construction workers in the year 1998-99 and there was hence a need to import workers, but today the construction industry turns out to be an area heavily hit by unemployment. Late last year, the labour sector already sounded the warning that with the bursting of the bubble economy, Hong Kong would soon suffer a serious unemployment problem. But the relevant officials began to see the signs only when the unemployment figures were released a few months later. Only at this point "when they were stung by the needle did they begin to feel the pain". Realizing that, they hastily put forward 12 old measures to tackle the unemployment problem; but the problem still deteriorated rapidly. In spite of this, the Government remained firm in its position on labour importation, adding insult to injury to the workers.

The second blunder: With the words of the Director of Health about herself eating chickens every day still ringing in people's ears, the Government began the massive slaughter of chickens in which not a single one was spared. Hardly had the principal officials remarked that the operational problems on the first day after the opening of the new airport were no more than teething problems, the whole air cargo terminal was paralyzed in just a few days. How can the people have any confidence?

Third, the Chief Executive had pledged with all solemnity that no fewer than 85 000 housing units would be constructed each year but in a matter of eight months, he suddenly announced the moratorium on land sales for nine months. Although the Chief Executive calls upon the people of Hong Kong to learn from the spirit and courage of our mainland compatriots in fighting against the floods in the face of our present adversities, yet the Government has long treated the local people as human barricades in its housing policy, using both the carrot and the stick to force them to jump into the private property market in order to withstand the floods of falling property prices. Most regrettably, the assets test imposed on public housing tenants has shattered many people's dream of living in secured accommodation.

Fourth, the Chief Executive only points the finger at the international speculators, blaming their attacks as the cause of the bursting of our bubble economy. But since the economic base of Hong Kong is too small, even though that is a fact, the Government still cannot shirk the responsibility of depending solely on the "One Stroke of Mr YAM". The tactic of the Hong Kong Monetary Authority (HKMA) of defending the linked exchange rate by pitching up the interest rates has already undermined the lifeblood of the local economy, leading to the difficulties of enterprises in securing financing and thrusting the property prices straight down. More importantly, scholars have long suggested other means to defend the peg but the HKMA has, rather than pooled the wisdom and efforts of everyone, acted arbitrarily, further undermining the economy of Hong Kong.

The fifth blunder is the Financial Secretary's forecast made early last December that the Asian financial turmoil would be over before Christmas. It turned out that the turmoil had gathered greater momentum in summer this year, sweeping through Russia and Latin America which can possible trigger off a global recession. In its Report on Financial Market Review released in April, the Financial Services Bureau put down in black and white that there was no clear evidence of manipulation of the stock and exchange markets by a double-play tactic. In August, the Government threw out over $100 billion to engage in a wild gamble with the speculators, claiming that it was to punish the speculators who cheated in the markets.

We can see the Government's contradictory policies. If a team loses a match because of mistakes made by the defence, the team principal should at least review the match afterwards. However, the Chief Executive blindly interpreted the term "crisis" in Chinese (the combination of two characters meaning "danger" and "opportunity"). One should not blindly believe that danger does always bring opportunities. The key is whether we can learn from our bitter experience, sum up the lessons, and thoroughly review the problems and conflicts that have happened in the process of the development of Hong Kong in the past. Only then can we avoid treking the old path and repeating the mistakes.

Has the Government really conducted any serious internal review after the series of policy blunders? What are the results of the review? Are there any improvement measures? With such a narrow economic base, how did the bubble economy come about? What has contributed to international speculators' cashing in so easily on the financial markets of Hong Kong? Why do the "male and female wage earners" always have to suffer first every time when recession hits Hong Kong and enjoy the fruits of an economic upturn last?

All these are matters of concern to us all. Everyone has looked forward to finding the answers in the policy address. Regrettably, having suffered so much and accumulated so many grievances all due to the Government's blunders, the people have only got from the Government the response that "the SAR Government should be more vigilant and seek to improve its performance" in return.

In the face of an 180 000-strong unemployed population, forced pay cuts on the "male and female wage earners", citizens' property having turned into negative assets overnight, the Chief Executive's only response is "to save Hong Kong with technology", his repeated remarks about the strong foundation of Hong Kong, and his determination to maintain the linked exchange rate and to maintain the principle of prudent finance management.

The Chief Executive's failure to keep a tap on the people's sentiments will only further weaken their confidence in the SAR Government's policies and deepen their grievances against him. In the face of the ever increasing public grievances, the Chief Executive's answer was that he had "no selfish motivations, no regrets and no complaints". Mr TUNG does not seem to see that the people's sentiments against him and their appraisal of the Chief Executive does not merely concern him as a person alone. Nor has it anything to do with their identification or otherwise with his personal morals. The most important matter he needs to look into is why the Government has ended up in today's situation. What we want the Government to deal with is its present "three noes" situation, that is, having no competence in bringing back a balanced economic structure, having no justice by failing to care for the lower strata and the underprivileged group, and also having no heart to carry out a democratic reform. The "three noes" of our midfield players have bogged down the development of Hong Kong, pulling it back from any progress.

We have repeatedly pointed out that the high land price and high property price policy is the culprit that has excessively restricted the development of Hong Kong's economic structure. The heated speculation on residential flats has seriously distorted the market incentives. It increases the enterprises' operating costs ─ a recent survey has found that 80% of the commercial tenants consider the present rent levels unreasonable and 40% even said that they have difficulties paying their rents. On the other hand, the returns of the industrial investments in the short term can never catch up with that of the real estate business. As a result, all capital flows to the property market and the industrial development constantly suffers malnutrition due to a lack of capital.

The Government's goal of constructing 85 000 housing units each year could have been an effective measure to rectify the economic structure in Hong Kong. However, since the malady has embedded too deeply in the economy and the property prices directly affect the credit quality of the banks, the economic reform has been after all unable to ride over this hurdle. By adopting the short-term measures such as a moratorium on land sales to boost the property market recently, the Government has even gone against the principle of a balanced development of the economy.

The SAR Government's lack of justice is shown by the lack of a safety net in Hong Kong. The SAR Government or the former British Hong Kong Government has always been partial to the interests of major consortia. When the economy was in a good shape, the wage earners could still look after their own interests. But now with the economic downturn, they are always the first one to bear the brunt and suffer the heaviest losses. Owing to the absence of unemployment assistance and insufficient employment protection in Hong Kong, and the workers' lack of collective bargaining power, they will plunge into the bottom of the pit once they lose their jobs. Those who are still holding a job are under the constant fear about their shaky employment as they can be forced to accept a reduced wage or laid off anytime. The "multiplicity" effect of the fear of unemployment is one main cause of the rapid slip of the Hong Kong economy.

The Government has not lent any helping hand to the unemployed workers and underprivileged group but even added insult to injury. We do not see any signs of adversities turning into opportunities but on the contrary, there are signs of the economic crisis being transferred from one strata to another, the property developers pressurizing the enterprises and enterprises pressurizing the workers. Now the Government has made Comprehensive Social Security Assistance recipients its targets due to the substantial increase in welfare expenditure. The result will be that the lowest strata have to bear the greatest pressure from the crisis and this will also lead to division in society. There can hardly be any concerted planning and efforts to speak of.

The saddest thing is that the Government has no intention of promoting democracy. The Basic Law has painstakingly designed a political model of executive hegemony to allow the Chief Executive and the senior officials to be oblivious to the reality when forming policies and to do whatever they like. The Chief Executive is indecisive in taking measures to relieve the people's hardships but acts quickly and determinedly in scrapping the two Municipal Councils.

The Chief Executive always stands in the wrong position, the defenders keep making mistakes and the midfield men have no competency, no compassion and no heart. The players always stay in their own half of the field and never play the ball beyond the centre line. With team-mates like that, even the two strikers are reincarnations of Pele or Maradona, there is nothing they can do to help.

Some people criticize Legislative Council Members for only destroying but never establishing things, that they only make criticisms but never put forward constructive proposals. In fact, we do want to be constructive, but under the executive hegemony, the proposals of the Legislative Council are never accepted. The mass media know that power is in the hands of the Administration, so they give much bigger coverage to the policies and activities of the Administration than to the suggestions of Legislative Council Members, political parties and civil bodies. Just like what I said earlier, the ball is never passed to the strikers.

The two strikers that I refer to are economic reforms and democratic reforms and only they can lead Hong Kong into the next century. They can address the "three noes", that is, no competence, no compassion and no heart, of the midfield men of the SAR Government. The economic reforms are about restructuring the already unbalanced economy of Hong Kong, creating a new investment environment and attracting the capital flow to the high value-added industries. In this way, the direction of the economy can be switched from being demand-led to export-led and at the same time the disparity between the rich and the poor can be narrowed and the overall living quality of the whole community improved. The setting up of the $5-billion Innovation and Technology Fund can be considered a step in the right direction, but we have yet to see the comprehensive development strategy as it is very vague. The short-, medium- and long-term development strategies are exactly what Hong Kong needs to formulate.

In the short run, what the Administration mainly needs to do is to restore the people's confidence and make preparations for the long run. To restore the people's confidence, the first thing to do is to stimulate the economy and the people's desire to consume, and to allay the people's anxieties about their employment and future income. In this regard, the CTU has all along requested the SAR Government earnestly to increase next year's public expenditure substantially on investments in education, social services and health care. If the Government demonstrates its determination in this respect, the people's confidence will then be restored. The other things that need to be done are to start knitting the social safety net, set a minimum wage, and set up an unemployment protection system and a collective bargaining system. In the medium term, the Government needs to invest substantially in the training of manpower which includes the fundamental education and retraining programmes for adults. This year, the Government only increases the former by 4% and it even enlarges the teacher-student ratio, showing that the investment in education is far from sufficient. The $500 million granted to the retraining programme may just be enough for one more year. What exactly are the Government's goal, commitment and strategy in this respect? They are still very unclear. Another question is how to divert the capital flow to the high value-added industries. The pursuit of innovations and technology is the first step forward but what is important is to address the financing problem. This requires the banks to change their strategy on loans to shift the emphasis on housing mortgages to loans made to commercialization of innovative ideas and business potentials. The Government has all the responsibility to bring to pass such changes.

The other striker is the democratic reforms. Only when the Chief Executive and the whole Legislative Council are elected by way of universal suffrage will the problem about the Government's accountability be solved, and will the people have a sense of belonging and feel that they are really masters of their own house. Unfortunately, the Chief Executive has taken the wrong position again in this regard. In an interview with the foreign media, he brought out the "stability theory" again, claiming that under the economic crisis, it was even less desirable for any major breakthrough in democratic progress. Well then, why does the Chief Executive want to stifle democracy again by scrapping the two Municipal Councils? Why does he want to do this operation? What really need an operation are not the two Municipal Councils but the election method of the Chief Executive and the Legislative Council.

Some people lay the blame of the confidence crisis on the Chief Executive's lack of public relationships skills but they have overlooked the structural problem. A Chief Executive elected by 400 people is equivalent to an oligopoly. In the economic perspective, we understand that monopoly cannot bring about progress as only progress will only be achieved through competition. Similarly, in the political perspective, a democratic election is tantamount to competition in a free market. Only through this competition will the elected know how to deal with the people's sentiments and aspirations, and understand how to lead the Government in building up public confidence. As Mr TUNG is a product of an oligopoly, how can we expect him to have the sufficient political tact to lead all walks of life in Hong Kong?

Thank you, Madam President.

PRESIDENT (in Cantonese): Miss Christine LOH.

MISS CHRISTINE LOH: Madam President, the Citizens Party is raising an amendment because we believe that there are major policy areas which are poorly developed or neglected altogether. For the fifth year, I have prepared a shadow address. It is a sobering exercise. Making workable recommendations is not an easy task. Despite all our own limitations, we know it is possible to identify problems and suggest specific solutions. The Chief Executive, with the entire Civil Service at his fingertips, has much more resources, and could have done better. We do not expect the Chief Executive to take up every problem in any policy address. But for what he has chosen to deal with, we expect thoroughness and substance.

The Citizens Party has high expectations of the Chief Executive and the Administration. Now that Hong Kong is no longer a colony, we expect old and inappropriate polices to be reviewed. We expect courage to tackle long standing problems. We expect a Chief Executive who sees it as his duty to start taking positive steps toward preparing this community for the ultimate aim of universal suffrage as mandated by the Basic Law. Nevertheless, we find this year's policy address wanting. I will go into details in a moment.

Developing parliamentary tradition

Before doing so, I wish to respond to Dr the Honourable LEONG Che-hung's comments that raising amendments inhibits a free flowing debate because the amendments supposedly impose the debate towards certain directions. I really do not see this as a problem. In Britain, from where we adopted the tradition of using a Motion of Thanks to debate the government's annual address, the Opposition frequently raises amendments. That this year we have an enthusiastic response to the Chief Executive's address with three amendments is simply a sign of Hong Kong's own developing parliamentary tradition. This is a healthy sign. We are a legislature in loyal opposition to the executive. We have an awkward political system, but this is not of this Council's own making. It remains our job to give clear signals about how we see the annual address. I expect we will see plenty of amendments in future years.

Neither the Chief Executive nor the Civil Service should feel too bad if even the original motion fails. Even if we should support the motion, it does not mean that we support the address. Therefore, in not supporting the motion, it also does not mean that we do not support the Government as a whole. We lack will power in this Council, and making amendments to the policy address is one of the things we can do to show dissatisfaction. We are taking this opportunity.

The Citizens Party's amendment is framed in broad terms. If what Members say to the media is anything to go by, our amendment should receive broad support in this Council. While we may have different views about which are the areas of policy failing, Members agree that there are serious flaws. Public polls indicate that the policy address did not help to raise public confidence. If Members wish to remind the Chief Executive that we expect more from him, I suggest they consider supporting our amendment.

But let me start with a word of praise. I am glad that the Chief Executive has asked the Chief Secretary to undertake an Enhanced Productivity Programme within the Civil Service, and that departments "will be required to deliver productivity gains amounting to 5% of their operating expenditure between now and the year 2002". Unlike Dr LEONG Che-hung, I do not fear that the Hospital Authority will not have enough resources. They have plenty. They, too, must watch their spending. It is about time that the bureaucracy is asked to increase productivity. There is too much paper-pushing and not enough hard thinking and analysis.

The environment:
"Cleaner air"

Madam President, I want to start my substantive response with the need for clean air. There is one thing that we share in this Council that we all breathe 25 times a minute. The Chief Executive admits that our air has become more polluted, and that the Administration will deal with it "as a matter of priority". Yes, diesel taxis should be made to switch to use liquefied petroleum gas (LPG), but why do we have to wait till 2005 to switch them all over? If this is really a matter of priority, is nearly eight years the best that we can do? Surely not, Madam President. I would like the Chief Executive to show his leadership by telling the Administration that he wants the time frame to be greatly compressed. After all, a diesel-to-LPG switch is not rocket science.

In the meantime, why not also do the following:


    Firstly, switch all diesel public light buses to petrol driven ones within three years;


    Secondly, franchise buses must be tested regularly and if a bus fails the emission test, it goes off the road immediately and the franchisee is fined $50,000 or more;


    Thirdly, educate the public to see a vehicle not as a mobility convenience but as an emitter of poisonous pollutants requiring strong regulation and penalty. As such, regular compulsory emission testing must be carried out and the polluters fined heavily. This should not have to wait. And, by the way, any whining from the Transport Department or the police to play their assigned roles must be resisted. Indeed, the Chief Executive should read them the riot act.

In summary, on this point, I find the policy address wanting in really trying to fight air pollution. A lot more can and must be done.

"Cleaner water"

At the same time, we must clean our coastal waters. I support the Administration in pushing ahead with the Strategic Sewage Disposal Scheme. I urge the Chief Executive to look ahead and consider how Hong Kong can invest in cleaning up water pollution in the Pearl River Delta. Ultimately, without cleaner water there, our own efforts will not be enough. So, let us be creative and explore how to fund a clean-up in southern China.

"Use of energy resources"

Mr TUNG said that the Administration is carrying out audits for the use of energy in government buildings. But were we not told that some years ago that the Electrical and Mechanical Services Department (EMSD) has been doing this for two years already? Did they not tell us they were starting with Queensway Government Offices? Where is the result? Perhaps Mr TUNG has been duped by wily civil servants. If he is asking them to start all over again, it will be very useful for this Council to have a definitive timetable.

I am also happy to hear that government buildings will be designed for high-energy efficiency. When will this start, and does it include public housing? If not, why not? The Chief Executive tells us that "building energy codes" will be published. Does this mean there will now be a review of the overall thermal transfer value (OTTV) since that is now regarded as outdated internationally?

Madam President, is the Administration prepared to actually have an energy policy? The two booklets of the Policy Objective on "Energy" and "Improve Our Urban, Rural and Marine Environment" show how confused the policy-makers are. The Economic Services Bureau and the Planning, Environment and Lands Bureau see their duties quite differently in the two booklets. Why not integrate the two and decide which Bureau has energy planning responsibility? Why not state sustainable development as a policy objective?

Land and housing

As regards housing, the Chief Executive repeatedly keeps saying in public that his first priority is to stabilize prices. What does this really mean? Let us not forget that it was the same Mr TUNG and his coterie of advisers who wanted prices to fall a year ago. Was it not Mr TUNG who hinted last year that he had a target in mind for property prices and then declined to tell the public what that was? He then repeated these comments periodically. Was that not a kind of government manipulation of the market? And, is he doing it again now, except that he wants to talk up whereas a year ago he wanted to talk down the market?

Furthermore, he refused to say what criteria would be used to determine whether land auctions would resume after March next year. Why not disclose the criteria if there are any? My fear is that there are not any criteria. He seems content to bumble along and see what happens. How can this Council tolerate this habit of non-disclosure, however well-intentioned? Without proper disclosure, we cannot judge the Administration's competence in making these important decisions.

The Chief Executive said that economic recovery depended on four factors: namely, the external economic environment, moderation in interest rates; stabilization of property prices; and increased public confidence. Surely, external factors and interest rates are closely related. Does the Chief Executive and the Administration now understand better that a confused housing policy can lead to the spread of a financial crisis?

The Chief Executive wants to provide public rental housing to the needy. No one quarrels with that. But his other priority is to "facilitate home ownership" for those who wish to buy their own homes. Accommodation is a necessity of all but not home ownership. I still cannot see why the taxpayer must pay to help people buy homes. This policy so lauded by Mr TUNG is a drag on the private property market.

Let us face it. Madam President, Hong Kong is now the world's largest supplier of socialized housing outside communist economies. Do we really need to be the world's largest developer and landlord? How is the transfer of wealth in the community to keep this policy going? In 1996-97, the land cost given by the Government to the Housing Authority was $18 billion. A new public housing flat in an urban area had a rent levied of about $6 per sq ft per month. Has anyone asked whether there is a more efficient way for Hong Kong to provide accommodation to our community?

There are hints in the policy address that the Administration may be thinking of something. Their opaque statement on the future of the Home Ownership Scheme is an indication. If there is rethinking about a serious review of Hong Kong's direction in housing, I welcome it. Let us do some serious number-crunching and have a clear intellectual basis for who we need to help, why and to what extent. Without going through this exercise, we will just bumble along some more.

Monetary management

It seems that the Chief Executive deliberately said nothing about the Government's intervention in the stock and futures markets. While the Financial Secretary is running around the world explaining what the Government did to the world's financial community, there was relative silence in the policy address here. I certainly would be interested to hear what we learnt from the financial crisis. Members know my pet peeve. I have repeated it often enough in recent debates. Who is really taking decisions here? We know that the policies are not made by the Financial Services Bureau ─ they simply do not have the market expertise to do so. I suspect they are not really made by the Financial Secretary either, since he has no market experience, with respect. So, that leaves the Hong Kong Monetary Authority (HKMA). I am not saying that the HKMA does not understand markets, but I just wonder what the checks and balances are when the Administration as a whole has no real expertise in the Finance Branch, the Treasury or the Financial Services Bureau? We need a better architecture here.

I agree with the Chief Executive that Hong Kong can be an even more important financial centre in the future, so why not give us a plan on how we can improve disclosure, transparency and accountability? By the way, Madam President, I do not think that can be adequately redefined without having a clear understanding on who makes what sorts of decisions.

I know the HKMA does not like it, but I will repeat what I think. I think the HKMA should become the currency board and let it run on an auto-pilot system. Then the HKMA should carve out other responsibilities ─ such as treasury functions and banking supervision ─ to separate institutions. These measures will enhance transparency and, therefore, accountability.

Tourism, small businesses initiatives and technology

After a lot of public concern about the lack of government attention to tourism, the Chief Executive announced that we will now have a Commissioner for Tourism. That is a step in the right direction, but I am worried that the Commissioner will be another typical civil servant who has no experience outside the bureaucracy. If he is just a super co-ordinator within the Administration, this is very different from having an advocate for tourism. I urge the Chief Executive to reconsider this post. Give it to an appointee from the private sector who can reshape our tourism industry.

As for small businesses, the initiative to create a Small and Medium Enterprises Office within the Industry Department is just adding another bit to the bureaucracy. How can a typical civil servant really understand the needs of businesses? Again, why not form a special agency to really take a good look at how to facilitate business in Hong Kong?

Have we not learnt that the Civil Service is good at some things and lousy at other things? The Chief Executive pointed out that while various past initiatives reflect "the fact that the Government has done a lot to promote technology development", he must now take a critical look at those initiatives and redefine goals and objectives. What paragraphs 21 and 22 of the policy address really meant was that so far, government spending on technology is a big mess. The Government will now spend $5 billion to set up the Innovation and Technology Fund. We better make sure of two things: firstly, that the Civil Service will not be running it because it knows nothing about technology. Secondly, that it will also not be managed by a bunch of insiders who dish out grants to their friends to do their preferred kind of research and development.

Arts and sports

I want to touch upon arts and sports. We now have a new bureau for information technology and broadcasting, but arts and sports got dumped into home affairs. Does anybody in the Civil Service know or care about arts and sports? If not, then do not expect we will get anywhere in this community with those important activities.

Neglected areas

To end, I just want to list a number of areas where the Administration's address has neglected. The Chief Executive really has very little to say about social welfare, public health, the airport fiasco, women, human rights, the law, and the development of democracy in Hong Kong. These are no less important areas for all of us.

The balance of the address is skewed towards Mr TUNG's version of economic development. He leaves vast tracks uncovered. This is a disappointment. We deserve more from him and from the Administration.

PRESIDENT (in Cantonese): Mr Martin LEE.

Mr Martin LEE (in Cantonese): Madam President,

Lacking introspection but reversing the trend of democracy

The delivery of this year's policy address coincides with a time of adversity for Hong Kong, naturally the people of Hong Kong would harbour some expectations of the policy address in the circumstances. However, throughout those 50-odd pages of the policy address, the public could only see the Chief Executive repeating his claim that the recovery of our economy hinges on the external economic environment, and that we must not sell ourselves short nor lose confidence; for those issues of public concern like unemployment, wage reduction and so on, not a single solution has been proposed.

As we look back on the Government's administration blunders in the past year, including such incidents as the avian flu, the red tides, the new airport fiasco, the government intervention in the stock and futures markets and so on, we could see that the government responses have always been slow and inappropriate. Yet regrettably, not only does the policy address lack introspection in this connection, it also lacks response to issues like unemployment and people's hardships which are major matters of concern to the public. On the contrary, the Chief Executive has proposed in his policy address to abolish the two elected Municipal Councils, thereby reversing the trend of democracy and dealing a further blow to public confidence in the future development of Hong Kong.

Chief Executive unable to tap public pulse but wanders further away from the public

As indicated in several opinion polls conducted after the publication of the policy address, the popularity of the Chief Executive among the people has been on the decrease, since the public has found his governance substandard and the policy address disappointing; all in all, public confidence in Hong Kong as a whole has been further weakened. The policy address has clearly fallen short of public expectations. From this we could see that the wealthy business man-turned Chief Executive is just unable to keep tap on the public pulse in general; while advising us to join our efforts, he himself is wandering further and further away from the general public.

The Democratic Party deeply regrets that the policy address has neglected the hardships of the people and retrogressed on the road towards democracy. For this reason, we are moving an amendment to the motion of Thanks today to express the public dissatisfaction with the policy address. In addition, we are also urging the Chief Executive to return from his wrong way and then to propose promptly a series of measures to alleviate people's hardships on the one hand and promote democratic development on the other, with a view to restoring public confidence in Hong Kong.

The Chief Executive has no complaint, but the people of Hong Kong has no choice

Madam President, despite the fact that his popularity among the people has been on the decline, the Chief Executive has been praised highly by President JIANG Zemin when he was submitting a report on his performance in Beijing last week. What is more, his measures to tackle the financial crisis and other problems confronting Hong Kong have been endorsed by the central authorities. To the people of Hong Kong, this is not only an irony but also a tragedy. Nevertheless, we should not be surprised. After all, Mr TUNG Chee-hwa is not elected by the people of Hong Kong; he is chosen by the national leaders, and naturally he will not consider it his first and foremost task to cater for the needs and interest of the people of Hong Kong. On the contrary, so long as he could cope with the wishes of the national leaders and win their favour, he needs to fear nothing even if his popularity among the people continues to decline; he could still remain as our Chief Executive, or even remain in office for another term. That is why I say the Chief Executive has no complaint but we have no choice! The Chief Executive is powerless, but the people of Hong Kong is helpless.

Establishing a democratic political system, safeguarding freedom and nurturing novel thinking

Madam President, the Chief Executive has always been talking about stabilizing the political environment first, to be followed by economic development and eventually democratic development. His stance is completely in line with that of the Central Authorities, which is "stability overwhelms everything". The meaning behind such a concept is that social instability and unrest will arise if China or Hong Kong is to have democracy at this stage.

I must point out that this is a very old-fashioned concept, even the general Asian community has found it obsolete. In fact, political development and economic development are just like our two legs, both of them have to move forward to achieve any significant complementary results.

In a democratic country, if the people have lost confidence in their government, they could elect another government through peaceful means. In doing so, they do not have to and will not shed a single drop of blood. Recent examples of changing the government through democratic election could be found in the United Kingdom and Germany. On the contrary, the economic fiasco in Indonesia coupled with the autocratic rule and corruption of former President Suharto has aroused much agitation among the people, social unrest was created as a result and many people were sacrificed. All these incidents serve to prove that democracy will only bring about social stability but never social unrest.

The President of South Korea was elected to office because the Korean people have become sick and tired of the corrupted former government amid the economic crisis. Time and again, he has stressed that the existing crisis among Asian countries should be attributed to the fact that Asian countries have all along been focusing on economic development but neglecting the need to promote democratic development at the same time. He has also stressed many times that reforms to the market economy and democratic development should take place side by side.

Last week I was in Bangkok attending a conference organized by the Council of Asian Liberals and Democrats. The participants of the conference all reached a consensus that only democracy could protect social stability, which is an idea completely in contrast to that shared by President JIANG and the Chief Executive.

I must stress that in making their best efforts to revive the economy, governments of Asian countries should also strive to promote democratic development actively. Without democracy, we cannot create a good environment for investment.

When the other Asian governments are leading their people towards democratic development, the Chief Executive has chosen to retrogress on the road towards democracy. In that case, even if the external economic environment improves and causes our economy to revive, the revival will not last long and other Asian countries will sooner or later replace us as the international financial and trade centre in the region.

If Hong Kong is to have stability, prosperity and security, we must first have democracy.

Madam President, Mr TUNG Chee-hwa has also talked about making Hong Kong into a centre of novel thinking and a centre of innovation and technology. The Democratic Party does welcome the proposals in this connection. However, I should also like to share with Honourable Members the following experience. Six months before Hong Kong's reunification with China, a large scale conference was held by the Singaporean Government for school headmasters to discuss and find out the ways to help students in Singapore to think creatively, with a view to catering for the country's needs in its development in the Asia-Pacific region. After five days' discussion, the participants came up with the conclusion that each of the students should be provided with a computer.

This is not a bad idea after all. But it is not the answer to the question either. The students in Singapore cannot think creatively not because they do not have a computer, but because they do not have a free living environment. They do not even know how Coca Cola tastes!

Therefore, if we are to nurture our next generation's ability to think creatively, we have to safeguard the free living environment we are enjoying now. With freedom, we could all think independently and freely, we could improve ourselves through introspection, exchange of ideas and debates, thereby nurturing our ability to think creatively.

I should like to ask a question. Why must we Chinese leave our homeland to have our potential developed to the fullest or to make significant academic achievements? Successful examples in this connection include Nobel Prize winning scientist Prof YANG Zhengning and the most recent Nobel Prize winner Prof CHUI Qi. The answer is simple: China has no democracy and, hence, no freedom; the lack of freedom denies room for creation.

If the Government binds the people's feet with foot-binding cloth, naturally their feet could not develop normally. By the same token, living in a country without freedom, the people's mind will be bound, not by cloth but by metal wires. In that case, how could they think creatively? Therefore, I must stress that without a democratic system to protect the freedom of the people, no novel thinking could the Government nurture, irrespective of the amount of money invested.

Protecting legal system and human rights, developing Hong Kong into China's arbitration centre

Madam President, during my several meetings with the Chief Executive, he has clearly indicated that he did not consider democracy, human rights, the rule of law or freedom that important to Hong Kong. In this policy address, the issues of legal system, personal rights and political development were covered in four small paragraphs only; and even in these four paragraphs, one could hardly see any determination on the Chief Executive's part to defend these important elements. This tells us very clearly that the Chief Executive does not attach great importance to democracy, the rule of law, human rights or freedom, although they are the fundamental factors essential to the long-term development of Hong Kong. The Democratic Party is very dissatisfied with this aspect.

I wish to point out that factors such as democracy, freedom, the rule of law, human rights, fair trade, and an uncorrupted community are beneficial not only to Hong Kong but also mainland China. If we could safeguard these factors, we could help the Mainland improve quickly and develop into a great country in the 21st century. But if we lose these essential factors, not only will Hong Kong and China find it hard to make improvement, we might even find ourselves sailing against the currents, falling back if not making any headway.

Furthermore, the Democratic Party has all along supported separating the Legal Aid Department from the rest of the Government to enable it to effectively safeguard social justice and fairness, as well as to help more people who are in need. The Bar Association and the Law Society have started fighting for this cause since 20 years ago. Moreover, the Legal Aid Services Council established last year has recently completed an in-depth review and recommended, likewise, the independence of the Legal Aid Department. For these reasons, I hope the Chief Executive will not use the economic downturn as an excuse to postpone endlessly the actions to give the Legal Aid Department an independent status.

On the other hand, although the Chief Executive has talked about developing Hong Kong into different centres in the policy address, he has overlooked the importance of developing Hong Kong into an arbitration centre for China trade. It is very common for foreign investors doing business with mainland agencies to set out clearly in the contracts that both parties would give up the right to bring any commercial disputes to court but to have them settled through a commercial arbitration mechanism. The contracts would also state very clearly the place of arbitration, as well as the laws to apply.

Before the reunification, Hong Kong was still a British colony, many mainland agencies were therefore unwilling to choose Hong Kong or the legal system in use in Hong Kong to handle their disputes. But now Hong Kong has become a part of China, it should be more readily acceptable to the mainland agencies if the disputes are to be settled in Hong Kong. Moreover, given that foreign investors have all along had confidence in our legal system as well as legal practitioners and appreciated our efficiency, the Chief Executive should make use of this strong point of ours to lobby the foreign chambers of commerce in Hong Kong, the Central Authorities, as well as the local agencies to set out in their contracts that any disputes should be dealt with in Hong Kong and according to the laws of Hong Kong.


In a nutshell, the policy address is moving against the course of development on many important fronts. For instances, reversing the development towards democracy, neglecting human rights, intervening the free market and so on. All these examples have indicated that Mr TUNG Chee-hwa is gradually destroying the factors to success which we have established through years of concerted effort.

I sincerely hope that Mr TUNG Chee-hwa would understand that it is an internationed trend to develop towards democracy, and that no government could move against such trend. As the Chief Executive of 21st century Hong Kong, he should have the responsibility to reflect this notion to the national leaders to enable China to progress with time, to join the world of democracy and freedom, and to help the people to become genuinely rich and strong.

The Democratic Party believes Hong Kong has developed enough basic qualities for our political system to develop towards democracy; it is time for us to take action to accelerate the establishment of a democratic political system, to safeguard a free environment that could nurture novel thinking, to create a more favourable business environment for Hong Kong, and to enable Hong Kong to develop a diversified economy as well as innovation and technology, thereby making Hong Kong a leader in the Asia-Pacific region and propelling Hong Kong as well as China towards prosperous development.

Madam President, I beg to differ Dr the Honourable LEONG Che-hung's view regarding our amendment ─ he has in fact fallen asleep now. (Laughter) His view is obsolete and old-fashioned. As such, the Democratic Party urges Honourable colleagues to lend their support to our amendment. At the same time, we would also support the amendments proposed by Mr LEE Cheuk-yan and the Honourable Miss Christine LOH.

PRESIDENT (in Cantonese): Council shall now debate the motion and the amendments together in a joint debate. Mr James TIEN.

MR JAMES TIEN: Madam President, 1998 is a year that brought Hong Kong back down to reality from worldly heights and our people again to be concerned about real live issues. For the last five years of British rule under Governor PATTEN, the emphasis of the Government had been on furthering democracy, human rights, labour union rights and not much in planning for the foundation of a diversified economy that could weather storm and create wealth and employment.

This policy address reminds us how we have strayed from the course we knew in the late 1980s and early 1990s. Back in those days, the Government focused on economic development and was not distracted by politics. The result was a bit of a golden era in which we enjoyed high growth, high standard of living and low unemployment.

The Chief Executive clearly wants us back on the pragmatic path. This is evident in his proposal for a Council of International Advisors comprising some of the best minds in economic and finance in the world today. They are also coming here to offer their expert advice free of charge, save for airfare and hotel. I find it unfair that some commentators should impute the motive of the Government and those advisors.

Hong Kong needs them for the quality of their advice on international macro-economic issues, not local ones. We also want them here to allay fears that our Government is turning inward and giving up on free market principles by our intervention in the stock markets and new tough rules imposed on shares trading. We must have them here as a message to the world that we cherish outside opinions and we are committed players in the regional and global economy in a fair and transparent way.

Recently, several members of various international chambers of commerce have voiced their concern to me that since last year, they felt that Hong Kong has become more Chinese and less international, while some major Chinese cities such as Shanghai is becoming more international and hence less Chinese. Their specific point of concern seems to be the use of English in Hong Kong, by civil servants, by this Council and by the general public at large. I feel that the Government should promote actively the use of English in Hong Kong if we are to become the New Yok or London of Asia. Being part of China and remaining as a cosmopolitan international city should not be mutually exclusive.

To plan for a diversified economy to supplement our manufacturing, financial and services industries, the Chief Executive has put a lot of stress on Hong Kong catching up in the technology race. The Government is pledging $5 billion for the Innovation and Technology Fund. Specifically, the Government plans to match dollar for dollar technological investments by private enterprises. But there are a few areas of improvement that I would suggest for this programme.

The Government seems to promote a five-year planning mode, which is too slow in today's cyberspace Internet age. Technological developments in these days are not so systematic and predictable. Changes are fast and they take place in directions that a bureaucracy cannot grasp, let alone dictate.

Right now, the policy address envisages the Government taking its time leisurely to launch a consultative study into technology till the middle of next year. Any serious capital injection into technology by private enterprises may have to wait until the next century when we are already lagging behind our regional competitors by years. Taiwan, for example, has already had a science park for two decades.

The Government here has a lot of faith in the partnership it plans to forge between the academics and the private sector in technology. I am a little skeptical because this is not the right approach for us. Hong Kong cannot copy the model of the United States in technological development. We do not have a military industrial complex that ties together the Government, the universities and the arms supply companies, which later evolves into consumer products. We only have the customer market-driven technology model. We must, therefore, insist that the universities focus on commercially oriented and not academically propelled research. We want products on the international market as quickly as possible. We cannot afford technology that takes a long time in evolution.

We have to understand also that the $5 billion fund is not a lot of money when spread over many years. Hong Kong also does not have many big hi-tech companies that can and will match government fund on this level of research. This means not private industries, but rather the Government, should show the initiative and coax technology into being just like Taiwan and Singapore do.

I suggest that we foster closer technological collaboration with the Mainland, which has a military and industrial complex, a lot of software talents who might like to relocate to Hong Kong. With our quality of life and global contacts in marketing and sales, Hong Kong could indeed become the Silicon Valley of the region.

Madam President, the Chief Executive is right that the Government cannot raise expectations, manufacture jobs and fund nonviable businesses forever. Other governments have tried socialism, a disaster everywhere. We must not. Our Government is already anticipating a budget deficit of much higher than $21 billion for this financial year. Some local analysts figure the deficit could exceed $50 billion. Whatever the true amount, it is something that cannot be sustained and is something that the Basic Law will not allow.

I disagree with those in this Council who suggest that the Government should spend to create temporary and unnecessary jobs just to keep the unemployment rate down. We all have to face the pain and to adjust so that we may emerge from the recession leaner and better. The Chief Executive is only stating the obvious when he implies that we have been spoiled by making easy money, inflated wages and excessive fringe benefits not matched by productivity.

But there is one area that the Government can do more to ease the worst of the recession. This is assistance for small and medium enterprises (SMEs), which are so acutely affected by high interest rates caused by the Government's protection of the peg. These SMEs are the pillars of Hong Kong, employing more than 90% of the private sector workforce. They are the victims of the Government's fiscal policy and must not be the only one group paying the price.

The Hong Kong General Chamber of Commerce applauds the principle behind the loan scheme to cushion the credit crunch. But we think the $2.5 billion scheme is too little, the application procedures too complicated, and the Government's 50% share of the risks with commercial banks not viable. The SMEs applicants have been complaining that they need help urgently. For many, making it through the current recession hinges on the Government approving their requests quickly. The banks also suggest that the Government should shoulder 70% of the risks to make the scheme viable.

None of these demands is extreme. A more effective scheme would slow down SME bankruptcy, raise consumer confidence and stem unemployment, now stuck at 5%, from getting worse.

Madam President, the policy address skirts the issue of employer and employee's position on pay adjustments. Many companies today must either cut pay or cut staff to survive. This is a bleak choice for employers who are not heartless, it is simply a choice of the lesser of two evils. Reducing pay is better than reducing staff. Employers accept that they have got obligations ─ commercially to their shareholders and creditors, morally to their workers and socially to the community. They should do everything to avoid causing hardship to their employees by dismissing them.

The policy address also dwells on the depressed property market, that is a measure of the economy and the public sense of well-being. We have often heard some legislators urging the Government to drive down property prices because these would supposedly make private housing affordable to more working class. I am amazed by this naive stance. The property market is not just a win-lose proposition. Free falling property prices have not generated a boom in flat sales, benefiting the working class, but the opposite. Today, those who did not own a flat last year still cannot afford to own a flat. Today, those who had a flat with positive net worth last year is now paying monthly mortgages with negative net worth. The poor are still poor, the rich also become poor. Our economy will continue to spiral downwards if this policy is not reversed.

On environmental issues, the Liberal Party wishes to stress our dismay in the rapid deterioration of our air qualify. Bad air quality affects everyone's health, increases medical treatment expenses by both the Government and individuals, causes employees to call in sick, thus reduces productivity and competitiveness. How can we persuade tourists to visit us or foreign investors to work here without solving this problem immediately?

We urge the Government to "fast track" all programmes currently being implemented on tackling air pollution.

Madam President, I would like to talk about the civil servants. I agree with the Chief Executive who excuses his senior staff for their mistakes as they grapple with the many challenges in a recession. However, I disagree with the argument that civil servants must be sheltered from the agonies of an economic slump. I think the civil servants who claim they are in the same boat with us, can best show their leadership and solidarity by volunteering for a pay cut. This pay cut will not really hurt the living standards of the civil servants. They have done better out of the recession with their fixed and high income at a period of deflating prices in Hong Kong. I am sure that my Legislative Council colleagues will take a cut in kind if civil servants were to face the same.

Madam President, another aspect of an otherwise fairly good policy address is the failure of the Government to accept the naked truth about our economy in the next few years. It is almost impossible for the Government's financial planners to meet the medium term forecast of 4% Gross Domestic Product (GDP) growth rate when for this year, the rate will be -4%. There is no miraculous recovery on the horizon for Hong Kong, for Asia, or for the world. Yes, the Government has to force a rosy forecast to justify its expenditure plans. But our people have had enough of delusions from a government that has a recent history of missing GDP forecasts somewhat. We need a government that is candid and credible if we want our citizens to have confidence in our Government.

Madam President, The Liberal Party applauds the policy address for its sober tone and sense of proportion and priorities. Nevertheless, I have voiced part of our reservations and my Liberal Party colleagues will make further suggestions later, which we would like the Chief Executive to note and government officials to answer back next week. In the meantime, I, on behalf of the Liberal Party and the Hong Kong General Chamber of Commerce, will vote for the Motion of Thanks.

PRESIDENT (in Cantonese): Mr Jasper TSANG.

MR JASPER TSANG (in Cantonese): Madam President, during the past year after the first policy address of the Hong Kong Special Administrative Region (SAR) was published, the economy and social condition of Hong Kong experienced a change that was beyond anyone's imagination. In reviewing the Government's administration over the past year, we should not only ask how many plans drawn up last year have been put into practice, but also ask: Are these plans as well as the principles and policies upon which they were based still appropriate as our economic prospect was still optimistic at the time the plans were drawn up?

The Democratic Alliance for the Betterment of Hong Kong (DAB) compiled a submission earlier with "to save the economy, to help alleviate people's hardship, to restore confidence" as its theme to express our expectation for the second policy address of the SAR Government. Assessing this policy address on the basis of our expectations, we think that the administrative direction proposed by the Government for saving the economy is correct. However, the Government has failed to map out adequate measures for alleviating people's hardship.

As far as easing pressure on the public is concerned, the policy address has not made any new suggestions. I believe families which are suffering enormous pressure under the economic depression will not be surprised by what was said in the policy address. In February this year, the Financial Secretary announced some tax relief to alleviate people's hardship. And in June, the Chief Executive put forward a series of measures aimed at saving the market. Since then, the Government has indicated that it will not put forward any new measures again, though we also believe the Government will not be able to put forward any measures which can produce an immediate effect to enable the unemployed to secure a job immediately. Nevertheless, some temporary measures which aimed at alleviating the pressure on the unemployed and helping them go back to work, such as the proposals put forward by the DAB in respect of the employment support scheme and improvement to the Comprehensive Social Security Assistance system, are after all feasible. Members from the DAB will give additional comments on this area later.

The policy address has devoted a substantial part of it to the discussion of Hong Kong's economic problems. We think this is in line with the expectation of the community. Just now, Mr Martin LEE pointed out that, like our two legs, politics and economy must move forward simultaneously. I have not had the opportunity to watch Mr Martin LEE's performance of moving his two legs forward at the same time. But I can well imagine how he will jump on one leg. People in general move forward by moving their legs forward in a consecutive manner. Over the past year after the handover, those who have kept tap on the pulse of the times understand very well that the main concern of most people in Hong Kong is our economic problems. The policy address has addressed the fact that our entire economy is now in a critical situation. It has also admitted that the challenge of the financial turmoil has exposed inherent weaknesses in Hong Kong's economic structure, including our overly narrow economic base, that is, there is an excessive reliance on the financial and real estate sectors.

Starting from this analysis, the policy address has proposed a series of directional policies. For instance, the Government will strengthen its support for technological development, rely on innovation and technology to promote the economy, strengthen surveillance and regulation of the financial markets, develop the debt market, give assistance to small and medium-sized enterprises, as well as adopting various policies and measures for the purpose of promoting broadcasting and communications, the film industry, Chinese medicine, tourism, the manufacturing sector and so on. The DAB considers that the direction taken by the Government in proposing these policies and measures is correct.

The policy address also emphasizes the importance of the moderation of interest rates and stabilization of the property market to the recovery of the economy. In reiterating its insistence on the linked exchanged rate, the Government has also showed its determination to stabilize interest rates. As regards housing policies, the Government made the commitment again that it would ensure the supply of public rental housing. At the same time, it would review the supply and demand of various types of housing again. This is basically in line with the DAB's proposal and thus well-received by the DAB too.

Madam President, recently, not a few critics held the view that the policy address was unable to solve our economic problems. If the solution to our economic problems, so to speak, refers to the immediate coming down of the unemployment rate, flourishing of various businesses and the rebound of the Hang Seng Index to 15 000 points, the policy address will definitely be unable to do that. All of us believe in free economy. I do not believe the Government's interference will benefit our economic development. As it stands, we find it impossible to believe that the policy address can put forward anything magical to immediately solve our economic and unemployment problems. I believe even the public in general understands the reason. It is also for this reason that I believe when a person receives a public poll telephone call asking him whether he believes the policy address can solve our economic problems before he has the chance to read the policy address, he will naturally say "no". If the Government thinks it can solve the economic problems just by publishing a set of policies and measures, there will not be any economic recession in this world.

Many reports quoted these public polls by pointing out the number of respondents who did not believe the policy address could solve our economic problems. These reports even inferred that the credibility of the SAR Government had fallen to the lowest point as a result of the policy address, as well as completely negating the theme of the policy address, that is, "From Adversity to Opportunity", and the appeal it made. In our opinion, this message has failed to truly reflect the current situation. Neither has it done anything good to society. As a matter of fact, we can see that the share prices have risen, the interest rates have adjusted downward, the property market has slightly rebound, and the unemployment rate has begun to stabilize two weeks after the publication of the policy address. Though we will not consider our economy has bottomed out as a result of this, and attribute these slightly encouraging signs wholly to the policy address, at least we cannot say the publication of the policy address has further dampened the confidence of Hong Kong people.

Madam President, it is the belief of the DAB that when the external environment improves and our economy really recovers, the directional policies proposed in the policy address will help develop a pluralistic and balanced economy, prevent us from relying excessively on the financial and real estate sectors as we used to be, and avoid the adverse consequences brought about by the bubble economy.

Of course, even though the Government has put in place correct policies and measures, whether they can achieve the desired effect in implementation has yet to be observed. Last year, under the SAR Government's administration, the public's impression of the officials' performance often differ greatly from the evaluation given by the officials themselves.

I think it is unfair to say that the quality of the Civil Service is poorer than before. The difficulties faced by Hong Kong over the past year is rare, if not unprecedented. Our economy experienced a dramatic downturn after years of prosperity. With the shrinkage in value of Hong Kong people's assets, the lowering of our living standard, the intensification of conflicts among members of society, the resentment against the Government will naturally grow. It is indeed extremely unfair to compare the public's evaluation of the officials in bad times with that in times of economic prosperity.

Nevertheless, I do believe no one thinks that officials do not need to be responsible for their administration blunders in times of difficulty. In the eyes of the public, there is no way to hide the numerous blunders made by the officials over the past year. Major examples are: underestimation of the impact of the financial turmoil and misleading comments in response; lack of co-ordination in handling the avian flu issue; the new airport chaos on its opening day and the implementation of mother tongue teaching, despite the support of the educational sector for many years, which has led to contrary social impact because of poor handling skills. In dealing with these incidents, the government officials' performance has made a negative impact on the community, thereby undermining the public's confidence in the Government.

In looking back at the problems arisen over the past year, the policy address has failed to review and analyse the problems to find out the causes leading to the blunders. It has also failed to point out what action the Government will take to avoid the recurrence of similar mistakes. Neither has it stated clearly what positive factors does the Government have internally that can convince the public that it is capable of making changes in a time of great challenge and difficulty so as to turn adversities into opportunities.

Madam President, for the above reasons, the DAB has the following comments about the policy address: though the Government is willing to save the economy, it lacks the strength to help people overcome their adversities and the people's confidence has yet to be restored. During this two-day debate, my colleagues from the DAB will express their views on different policy areas. We will supervise the Government to ensure that the commitments made in the interests of Hong Kong in the policy address will be fulfilled in concrete terms. We will also keep on fighting for the things we lack.

We hope the spirit conveyed through the theme of the policy address, that is, "From Adversity to Opportunity", can provide our entire community the impetus to overcome difficulties and to move forward.

Madam President, the DAB supports the motion.

PRESIDENT (in Cantonese): Mr Ambrose LAU.

MR AMBROSE LAU (in Cantonese): Madam President, every member of the community in Hong Kong has been subject to challenge since the financial turmoil. We all hope that we can find a panacea to solve our economic difficulties immediately. Like all flowers blooming together, people from all sectors of the community have put forward various views and suggestions. But amid all these opinions, we have failed to find any consensus or panaceas which can satisfy the needs of various strata and professions. Maybe the panacea we are desperately looking for simply does not exist. Hong Kong is an open economy; our economic recovery is closely related to the international economic environment. It takes time to solve the various kinds of problems brought about by the bubble economy and to complete the cycle of adjustment after the economic prosperity we have enjoyed over the past decade or so.

Some people have criticized the policy address for lack of short-term measures and failure to prescribe an immediate remedy to solve the urgent problems. In fact, since Hong Kong came under the challenge of the financial turmoil, the Government of the Hong Kong Special Administrative Region (SAR) has, under the leadership of the Chief Executive, taken a series of measures aimed at easing the pressure on the public and stimulating the economy. Examples are tax reductions, a freeze on charges for up to $20 billion, moratorium on land sales, reducing the revenue of government coffers by tens of billions of dollars, setting up a working group to ease unemployment, embarking on large-scale infrastructure projects to stimulate the economy and increase employment opportunities, fighting back speculators who shored up the market as well as resorting to "seven strokes and 30 twists" to restore the market order, attracting off-shore capitals to return to ease the liquidity of our money market, increasing the quota for first-time home buyers, setting up a loan of $2.5 billion to help small and medium-sized enterprises with their finance, strengthening retraining programmes and so on. These measures, which can produce an immediate effect, are all aimed at meeting the people's urgency. The Chief Executive has not delayed the announcement of these urgent measures in order to win applause for his policy address. Instead, he has concentrated all his might in the policy address by implementing all the rescue measures simultaneously.

Madam President, as the old saying goes: "Proper governance of a state lies in the good qualities of all people, rather than the special skill of an individual". This is in fact the objective of the policy address ─ "to pool all strengths". The policy address has proved to be able to draw on collective wisdom, absorb all useful ideas, and adopt the views of all sectors in society.

One of the highlights of the policy address, Madam President, is to respond to change in order to stabilize the property market. At a time when the public interest and the stability of the banking system were undermined by a sharp fall of the property market, the SAR Government put forward without delay a number of measures for stabilizing the property market, and that included suspending land sales, expanding the quota for first-time home-buyers, abolishing the "40% guideline" for banks, scrapping numerous measures which aimed at dampening property speculation and so on. In addition, the policy address further proposed that the construction of flats under the Sandwich Class Housing Scheme be suspended and Home Ownership Scheme flats be reviewed so as to expand the private property market. In fact, following the policy address's proposal of these timely housing policies, the property market has gradually stabilized. On top of that, the Government's market actions in August to repel speculators together with a financial crisis with an international hedge fund has registered good response in local interest rates and stock market after the publication of the policy address.

Madam President, the policy address has proposed not only to "put out a nearby fire with nearby water", but also to "put out a distant fire with distant water". Because of the rising trend of a knowledge-based global economy, the policy address proposed to drive our economic growth by way of innovation and technology as well as positioning Hong Kong to be a number of new centres while reinforcing and improving our existing major industries. Some people said "an excessive number of centres is tantamount to no centre at all". I find such a criticism a bit biased. In fact, Hong Kong has been called a centre for various industries, namely financial, trade, shipping, communications and so on. At present, our industrial structure is still far from being diversified and, in particular, there is a lack of industries which place importance on high technology and high added value. As a result, our competitiveness is under threat. In this respect, the policy address has put forward a series of long-term measures.

In October last year, the Chief Executive proposed in his first policy address that Hong Kong needed to move in the direction of high technology and high added value. At that time, many people did not support his proposal. However, the serious blow dealt at our stock market and real estate sector by the financial turmoil has exposed the fragility of our economic structure which is solely relying on the service and real estate sectors. As a result, more people have come to realize the importance of innovation and technology for boosting competitiveness. It is in fact needless to mention the fact that 80% of the productivity of the United States is attributed to advanced technology. Even Singapore and Taiwan, our neighbouring countries, are more advanced than Hong Kong in innovation and technology.

In promoting innovation and technology, the policy address has put forward proposals in concrete terms such as positioning "seven high value-added centres", the decision to establish an Applied Science and Technology Research Institute, supporting and stimulating mid-stream research, setting up an Innovation and Technology Fund with an injection of $5 billion, setting up a $100 million Film Development Fund as well as promoting Hong Kong as an international centre for Chinese medicine and medical practitioners. In my opinion, the policy address has made a right decision in proposing to move in the direction of innovation and technology. The measures it proposed will also produce a definite enhancing effect. But the crux of the problem lies in the fact that the Government has ignored the human factor. Of course, innovation and technology investment needs to take into account a number of indicators such as the investment environment of the market, costs and so on. But the prime element we need to consider is the availability of skilled personnel. Relatively speaking, Hong Kong is lack of skilled personnel in the technological field. Although not a few people holding a master's degree or doctorate graduate from various universities every year, most of them prefer to work in quick-money sectors which are not related to scientific research. Moreover, the university curriculum has failed to fully tie in with the efforts made for the purpose of driving Hong Kong towards innovation and technology. We simply cannot ignore the needs to attract and nurture skilled personnel.

Given the fact that the Mainland has a large pool of technological personnel and has made remarkable achievements in scientific research, China and Hong Kong can complement each other in promoting the development of innovation and technology here by integrating our dominant position in intermediary services in such fields as information, capitals, management, market network and legal services with the introduction of skilled people and scientific research achievements from the Mainland. We need not worry that the importation of skilled personnel from the Mainland will affect the employment opportunities of local expertise, for an importation of such people from the Mainland will practically create more job opportunities here. As long as we have sufficient personnel to promote local technological industries, our economy will tend to move towards diversification. Only in so doing can we solve the unemployment problem at its root.

Of course, in the long run, in order to develop innovation and technology, we need to nurture local talents, alter the younger generation's mentality of seeking quick success and instant benefits and even craving for speculation. At present, most of the first-class skilled personnel in the United States are engaging in industries related to innovation and technology. In Hong Kong, however, a huge number of first-class talented people are engaging in fast-buck industries. When speculation was rife in the property market, even those who hold a master's degree or doctorate worked as real estate agents. Such being the case, we should not ignore the need to change the people's sense of value relating to employment. In the area of education, there is a need to nurture more technological personnel. The policy address mentioned that the Government had ear-marked funds totalling at $630 million to promote the use of information technology in education. Moreover, the Government would set up an academic and training institution, that is, the Institute of Vocational Education as well as establishing a technological research institute. All these are conducive to the nurture of local technological personnel.

In the Hong Kong Progressive Alliance (HKPA)'s opinion, it is imperative for the Government to set up as soon as possible a university for Chinese medicine which employs modern scientific methods for research and education purposes. The policy address raises the point that Hong Kong has the potential to become an international centre for Chinese medicine and medical practitioners. However, it is not enough to mention merely the fact that the Government will examine the case for establishing an Institute for Chinese Medicine. We should fully understand the value of this idea and put it into practice.

In fact, Chinese medicine is a great scientific asset for the Chinese race. Chinese medicine is in great conformity with the pattern of nature in protecting human bodies and treating diseases. Moreover, it has the characteristics of reinforcing our bodies, rejuvenating our minds and analysing treatments by way of dialectics. As such, Hong Kong should make early preparations to establish a world-class Chinese medicine university by inviting experts of Chinese and Western medicine from the Mainland as well as other places all over the world to teach in the university. Only through putting an extra effort to nurture local talented people can we promote Hong Kong as an international centre of Chinese medicine and make Chinese medicine one of the important industries which create wealth. Hong Kong has indeed the potential in this area. At present, Hong Kong is behind the United States, Singapore and even Taiwan in terms of other technological industries such as information technology. It is only in the field of Chinese medicine that Hong Kong has a huge potential to secure a dominant position. This is because the old ancestor of Chinese medicine was originated from the Mainland. As the saying goes, "Those on the waterfront are the first to see the rising moon". If we can integrate our capital, information and market dominance with mainland Chinese medicine personnel and research achievements, many people throughout the world will need to buy Chinese medicine from Hong Kong and come here to treat their difficult cases. This is not a fantasy. This is an important way out for our future economy.

Madam President, the policy address also mentions the relationship between the executive authorities and the legislature. We must sort out the relationship between this issue and an executive-led government. Otherwise, it will be difficult for the executive authorities and the legislature to co-operate sincerely.

In fact, some government officials and Legislative Council Members have some misunderstandings about executive-led governance, thinking that it is the same as the so-called autocracy which has been proved to be effective by the executive authorities during the colonial rule. After the handover, colonial politics has completely disappeared. At the same time, there was a substantial increase in the democratic element of "Hong Kong people ruling Hong Kong". In my opinion, the Government needs to attach importance to political systems which are led by administrative effectiveness. In the past, colonial rule laid particular stress on executive-led governance while neglecting administrative effectiveness. The resulting adverse consequences have now been exposed by incidents such as the avian flu cases, medical blunders, mother tongue teaching problems, chaos arisen in connection with the opening of the new airport, all of which occurred after the handover.

I suggest that the executive authorities must listen to the advice of the legislature with a receptive mind. The Government should strengthen its communication with the legislature, instead of treating it merely as a rubber stamp, before the introduction of any policies or bills. In answering questions and explaining government policies in this Council, government officials should abandon their mentality of talking to themselves as well as treating themselves as "experts". Furthermore, the Government should incorporate all reasonable advice given by the legislature into relevant policies for implementation. On the other hand, the legislature should work with the executive authorities in a positive manner with a view to giving play to its supervisory and balancing functions in a constructive manner. Moreover, it should not only refrain from putting forward unrealistic administrative proposals, but also try not to do two jobs, though receiving only one pay cheque, by interfering with matters that fall within the jurisdiction of the executive authorities. In doing so, the Administration will be able to gain more public support and will be more effective. Sincere co-operation between the executive authorities and legislature is the foundation and prerequisite for enhancing administrative effectiveness.

Madam President, while the HKPA is in full recognition and support of the policy address, it feels that the Government has failed to integrate the huge infrastructure projects to be carried out in the next five years into one single project for the purpose of vitalizing the entire economy and strengthening public confidence. In addition, it has failed to explore how it can restrain its tendency of running into huge budget deficits. The loan scheme of helping small and medium-sized enterprises secure operating funds is also far from being perfect. In these respects, the HKPA has put forward relevant views and suggestions. It is hoped that the SAR Government can continue to listen to the views expressed by various sectors with an all-embracing attitude, with a view to perfecting its administration so as to further manifest the policy address's objective of changing "From Adversity to Opportunity".

With these remarks, Madam President, I support the original motion on behalf of the HKPA.

PRESIDENT (in Cantonese): Dr David LI.

DR DAVID LI: Madam President, over the last year, Hong Kong has suffered one of its worst downturns since the oil crisis of the 1970s. For anyone below the age of 40, it is a new experience. And it is a very depressing one. It is unpleasant to see people made jobless, to see wages come down, and to see shops and businesses close down. And it is unpleasant to hear the Government say that there is nothing it can do about the fundamental forces that are at work. It is a difficult message for people to accept ─but the fact is, the Government does not control our economy.

It is not only difficult to accept bad news ─ it is difficult to deliver it. I believe that our Chief Executive deserves our respect for being straightforward and open in his address.

It is very unfortunate that many people were highly disappointed by the address. They had high hopes for a swift cure for our economic ills. However, we must be realistic. There is no quick and magic solution to our current problems. It would be irresponsible to mislead people and pretend that there is. Rather than doing that, our Chief Executive has reassured the community that these difficult times will pass. And they will. And he has given us a plan for the future that deserves our fullest support. Indeed, he has outlined a vision ─ a vision that I share ─ of creating in Hong Kong a regional, cosmopolitan centre on a par with New York and London. To this end, he has defined impressive policies and goals on a wide range of economic and social issues.

The Financial Constituency particularly appreciates the Administration's plans to maintain monetary and financial stability, and to enable Hong Kong's continued development as an international financial centre that is second to none.

We would especially encourage the Administration to pay additional attention to three areas.

First, we would like to see the Administration conducting a fundamental review of the interrelationship between regulatory and other agencies within and outside the Government. We need more effective co-ordination between them.

We all recall the market operation by the Hong Kong Monetary Authority (HKMA) in August. It was a great success. However, we also recall that the regulatory actions of the Hong Kong Clearing and the Securities and Futures Commission (SFC) were not perfectly aligned with the aims of the HKMA. This was most undesirable. Hong Kong's development as a financial centre requires government and non-government regulatory agencies to co-operate efficiently.

Second, with a new Chairman recently taking over at the SFC, I believe this is the right time to review, rewrite and update the rule book.

We should bring the regulatory environment in our stock and futures markets up to the very highest international standards. Let us hire the best and the brightest from New York and London. If we want to use those cities as models for Hong Kong, we should not hesitate to utilize their skills and experience.

Third, the Financial Constituency would like to see greater co-ordination between Hong Kong and the Mainland in the development of financial and commercial regulation.

We see the benefits of such co-operation where physical infrastructure is concerned. Similar co-operation in the regulatory sphere would be of immense help to both Hong Kong and the Mainland.

Improvements in all these areas will contribute to the development of Hong Kong as a leading regional financial centre. And as the examples of New York and London show, the success of the financial sector encourages further development in many other areas ─ including telecommunications, high technology, travel, and the media. High technology, in particular, offers a platform for many new, high-value activities. Our Chief Executive was right in underlining its importance in his address.

However, I would urge the Administration to pay great attention to the human resources side of high technology. We have to be able to develop people to their full potentials. We need people with the right skills ─ and, perhaps more importantly, people who can teach those skills in our schools and universities, so that our young people can face the future with confidence.

I would also ask the Administration to put more urgency into a problem that affects us all ─ pollution. Members of the Financial Constituency have specifically asked me to mention this ─ and they are right to do so.

We cannot expect the best people in the world to come and live and work in a poor environment. If Hong Kong wants the best people, it must give them the best quality of life. We cannot be a leading cosmopolitan centre, if our air, our water and our food are not safe. This is not only an economic issue. It is a health issue, and I urge the Government to treat it as such. Progress is more important than consensus in this area.

Madam President, these are extraordinary times, and our Administration faces extraordinary challenges. In his address, our Chief Executive has made clear his intention to see Hong Kong meet its challenges and become a pre-eminent international centre in Asia. I fully support this aim. The financial community looks forward to supporting our Administration's efforts to make this vision a reality.

Madam President, I support the motion.

PRESIDENT (in Cantonese): Miss CHAN Yuen-han.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, the second policy address delivered by the Chief Executive has given the public a rosy picture. According to the policy address, Hong Kong is going to become an innovation and technology centre for South China and even for the whole region. In addition, Hong Kong will be moving in the direction of technology and high added value. The Hong Kong Federation of Trade Unions (FTU) greatly supports the move in this direction for Hong Kong is a high-cost economy. In the past, the FTU has repeatedly criticized and warned the Government by pointing out that our economic structure has, over the past decade or so, placed undue emphasis on the financial and real estate sectors at the expense of light industries and industrial development. But regrettably, in spite of what we have said, the Government still refused to admit its error. It is only until today that the policy address has put forward a proposal for restructuring the composition of our future industries and economy. Therefore, we support these ideas and opinions.

Negligence of labour problems

Though it is predicted that Hong Kong will have substantial development in the medium and long term, what shall we do in order to allay our immediate worries? What worries the people of Hong Kong most at present? From a telephone survey conducted by the Home Affairs Bureau in September, we can find that most people were concerned about the economic and labour problems. Over the past five days, our ward office has interviewed more than 800 people on the street. These people are most concerned with these two issues too.

Turning back to the policy address, we find that it did mention such issues as restructuring our economy, developing industries, promoting light industries, which, I said, the FTU has kept in close concern. All these issues have indeed attracted our greatest attention. Apart from being conducive to Hong Kong, these measures can also provide more job opportunities. As such, the FTU will definitely support them. But faced with the prevailing economic problems, we suggest that the policy address should not only map out medium- and long-term development, but also pay attention to some of the existing problems. For instance, the issue which caught most of our attention last year has been the housing problem; for this year, we are most concerned with the economic and labour problems. But it seems that the policy address has not mentioned a word about it at all. In last year's policy address, we could still see that there was a part concerning labour. But this year, the policy address has failed to mention about it at all. Of course, I support some of the views contained therein. The policy address did mention the fact that the Government has successively put forward 19 measures this year with a view to stimulating our economy and creating job opportunities. In fact, we do not expect the Government will put forward anything new. But can the Government possibly assess the 19 measures which aimed at easing unemployment in publishing the policy address? Some of these measures have been put into implementation progressively. For instance, a number of infrastructure projects have managed to create some job opportunities. The Government has also made some efforts in reducing and freezing rents. But we can also see that some measures still remain on the drawing board. Recently, for example, I mentioned frequently about flea markets, both within as well as outside this Council, for I think the markets can help create job opportunities. But the flea market set up in the old Tamar site has met a series of obstacles. As for the 3 200 posts mentioned by the Government, when are they going to be created? The Kai Tak airport site is now embarking on another plan. When will the posts mentioned in the plan be opened? All these issues warrant our attention.

Another example is the Employees Retraining Board (ERB), which came to our notice when we went through the policy address. The Government indicated that it would inject $500 million into the ERB because of the seriousness of the unemployment problem. This proposal is of course well-received by us. However, judging from the survey I mentioned earlier, the effectiveness of the ERB is questionable. In fact, many people doubt whether the ERB could really enable 70% of its graduate trainees to secure a job. I think this is a complicated issue. It is because the Government has always boasted that the ERB provides retraining only when there are vacancies. This make people think that they will definitely get a job after completing the retraining courses. But the objective fact is there is no vacancy available in the market. No matter how competent the ERB is, it still fails to find a job for its trainees. I find the current situation very strange for if an organizer fails to find a vacancy for its trainees upon the completion of retraining programmes, it will be disallowed from organizing further programmes. As such, a number of unemployed people have failed to find a place even if they wish to receive retraining.

According to the Secretary for Education and Manpower, Mr Joseph WONG, this problem appears to have been caused by the Government's unchanged policy concept. Faced with the grave unemployment situation, I wonder if there is a need for the Government to review the main objective of the retraining programmes, and whether it is necessary to guarantee that there are vacancies before the ERB is allowed to organize relevant programmes if the Government's aim is to help people acquire new skills. I think the Government must examine these issues closely.

I wish to stress that the unemployment rate published on Monday has begun to stabilize. As Members from the labour sector, we are naturally pleased with this. But I wish to tell the Government that I have a different way of looking at the figure. To start with, I will not speak from the negative side of it. The 5% figure is in fact a large number. At present, we can see that there is a rising trend of pay cuts and benefit cuts in society. What will the Government do if more companies close down after the Chinese New Year? These are issues that the Government needs to consider.

Furthermore, Madam President, I wish to talk about the issue which the FTU has been arguing with the Census and Statistics Department. The issue in question concerns about hidden unemployment, and the figure involved is 150 000. What is the government view of this figure? This is another issue it needs to consider, too. We can see that though the current unemployment rate has not risen, the number of unemployed people has actually increased, with reports of cuts in salaries, benefits and remuneration lingering on incessantly. In the third quarter this year, the FTU has received more than 400 complaints against wage cuts and deduction as well as arrears of wages, and the figure is two times the numbers of the first two quarters.

Madam President, against the deteriorating economic environment, numerous businessmen have found themselves running short of capital and thus proposed such measures as layoff, salary cuts, benefit cuts and so on. In dealing with these cases, I found that numerous employees, though very reluctantly, accepted these arrangements for the sake of keeping their "rice bowls". At the same time, I could see that some companies, like the Hongkong Telecom, went ahead to implement their pay cut plans even though they were making good profits. Instead of exploring resources in other areas, they only know how to exploit their employees in order to boost their profits. How can the employees accept these? Where is justice? What role does the Government really play? These are issues that the Government needs to examine.

The policy address asks both employees and employers to improve their co-ordination, understand each other better with a view to tiding over the difficulties together. I believe everybody, including employees, will like to do so. But objectively, it seems very difficult to reach this goal. In looking at the numerous cases I am dealing with, I frequently found that, as I said earlier, even if employees were extremely reluctant to have their wages and benefits cut, they were forced to accept that for the sake of keeping their rice bowls. I believe government officials are aware of such cases. The question lies in whether they are willing to sympathize with what is happening to the employees. The FTU has repeatedly asked the Government to enact legislation to require employers to give notice to employees in cases of wage cuts. This will give employees a legal status and the means to discuss with trade unions and take part in negotiations so that they can fight for reasonable, legal and sensible arrangements in order to safeguard the treatment they receive. But regrettably, officials of the relevant departments have so far refused to accede to this request.

I wish to stress one point in particular and that is even if the Government has no intention to deal with matters of employer's responsibility, it ought to look at the Protection of Wages on Insolvency Fund. If the depression continues to be with us after the Chinese New Year, many companies will wind up and employees will receive no wages. According to the existing legislation concerning the Fund, employees will only be compensated with wages for the month before they are sacked. But after going through all these salary cuts and benefit cuts this year, how can the Fund give protection to employees next year? Therefore, there is a need for the Fund Ordinance to be amended to ensure that the Government will pay wages to employees according to its original plan in case our economy suffers a massive collapse next year. It is therefore necessary for government officials to step forward to assess these issues.

Moreover, I find it strange that the policy address is silent on the foreign labour, an issue which should originally come under review on this occasion. In fact, I am of the view that this issue should be reviewed from the perspective of its impact on the entire community. During the meetings I held with residents every evening, some people asked: Why did the Government fail to review the issue concerning foreign domestic helpers? I am not saying that members of the community do not accept foreign domestic helpers. Neither do I mean that the community refuses to provide welfare to them. But the fact is some foreign domestic helpers lose their jobs after coming to Hong Kong. Theoretically speaking, they should go back to their home countries within 14 days. But instead of leaving Hong Kong, they are stranded here. What has the Government done in tackling this situation? It has enforced part of the legislation which is relevant to construction sites only. As for the other part, it has not done anything. What should the Government do in order to tackle the prevailing phenomenon where foreign domestic helpers take up the posts of private drivers? Not long ago, I asked the Director of Immigration this question and he seemed to suggest that this matter should be taken up by Mr WONG as it is of no relevance to him. I wonder whether Mr WONG will tell me which person should be responsible for this matter.

Both workers' unions and the labour sector have, in the past, asked the Government to deal with problems similar to the foreign helper issue. Given the fact that there is such a small number of vacancies available in various fields, I hope the Government can pay more attention to these issues and try to work out the solutions. We would like to ask the Government to show more concern for the unemployed and move one step forward for them.

Another issue I would like to raise concerns the unemployed, who are under extreme pressure at the moment. But we notice that the Government recently sent out the signal that it would review the Comprehensive Social Security Assistance (CSSA), or even probably have it cut, especially for some unemployed people. I have been working for the labour sector for 30 years. I can see that the people of Hong Kong have all along been working diligently. They prefer earning their own living to relying on government assistance. But in view of the gloomy situation in the job market and because foreign workers have snatched away their rice bowls, they have failed to find a job. In fact, they are not willing to seek help from the Government. They will do so only when they come to a dead end.

But in spite of this, the Government incessantly sent out the signal that CSSA would nurture lazy bones. I believe the Government said so intentionally to mislead the public. In fact, the needs of members of the community are varied. For instance, for the elderly people who have no one to turn to, the Government naturally needs to take care of them. But the case is different for the unemployed people. What they need is short-term assistance from the Government only. The most important thing is to help them find a job again, and this is also what they want the Government to do. The Government should not regard them as CSSA recipients. Instead, it should, as was proposed by the FTU, set up a re-employment support scheme. In other words, it should provide financial assistance in addition to skills training and group assistance so as to help the unemployed to join the workforce again. I am not prepared to go into the details here. My colleague, Mr CHAN Wing-chan, will speak on this issue tomorrow.

Faced with the present situation, Madam President, in addition to the labour issue, I would also like to talk about the housing problem, a matter of great concern to me. It has been the consistent view of the FTU that our housing policy should aim primarily at rental housing, with Home Ownership Scheme housing occupying the secondary place and the private sector playing a supplementary role. I understand it was for the sake of meeting the long-term needs of the population that the Chief Executive had put forward the objective of building 85 000 flats, streamlining the vetting and approving procedures, shortening the waiting time for public housing and so on. This year, the policy address continues to hold fast to its commitments by continuing the construction of an average of 50 000 public sector flats each year. The FTU supports this proposal and we think that there is a need to implement the proposal.

Now I would like to tell the Government that, apart from supporting the Government's insistence on the policy of supplying 50 000-odd public sector flats, we would like to remind the Government that more than 150 000 people are now on the Waiting List, and the waiting time is five, six or even seven years on average. For some single people, they even need to wait for nine years. On average, it will take at least six and a half years before they can be allocated with public housing for an improvement of their living environment, despite the fact that the Government has repeatedly promised that it will shorten the waiting time for public housing. On top of these hundreds of thousands of people, I would also like to remind the Government that we have 150 new arrivals each day, many of whom need to public housing assistance. It is therefore necessary for the Government to speed up its public housing programme in order to tackle this problem. At a meeting held by the Legislative Council Panel on Housing earlier, I also asked the Government whether there was a need to raise the number on the basis of the 50 000 flats. In this respect, the Government should either assess the situation or set up a mechanism. I hope the Government will not break the promise it gave the public and keep up with its efforts instead.

Talking about housing, I would also like to raise another issue. At a time when our economy is experiencing difficulty, the Housing Authority (HA) suddenly proposed that those waiting for public housing had to undergo an unprecedented assets test. The means tests the HA conducted in the past were family-based instead of assets-based. Let me take a family of four as an example. If it has $470,000 in assets, it will lose its eligibility ─ I would like to stress that it will not be allowed to be included on the Waiting List. Perhaps Members can imagine these people with a monthly earnings of $10,000. It sounds like they are having a lot of money if they have $400,000. But if they are required to rent a flat, the money will not last long. Why does the Government choose to make such a proposal at a time when the economy is so depressed? These people are now facing a situation where they have no idea what will happen to them the next day. What if they lose their jobs tomorrow? Has the Government thought over this seriously in considering this policy?

I wish to stress in particular that the $470,000 does not refer to cash only. Even the tools for making money are included. For example, if you are a self-employed driver, the vehicle operated by you is consider as your tool for making money. As such, is there a need for the Government to reconsider this matter? I think the Government should not do something like this. Instead, it should maintain the original policy.

Recently, the Government proposed that it might halt the sale of public housing or adjust the scheme. Of course, according to the Secretary for Housing, this proposal is still under consideration at the present stage. Nevertheless, the Government has the habit of flying balloons to test responses. I think I need to remind the Government this: Why must we link HOS flats with the market? Why is it impossible for the Government to offer a price only slightly higher than the cost, say selling a flat to residents at a price range of $200,000 to $300,000? Why did the Government choose not to improve the housing problem for the grassroots when the current property prices are still low? These are issues that the Government needs to consider seriously.

Madam President, in drawing a conclusion on the composition of our economy in the face of the prevailing economic difficulties, the new Government noted that there was a preference for the financial and real sectors. After drawing a lesson from the bitter experience, the Government decided to restructure the composition of our economy and proposed a series of measures. These we support. In particular, the Government has earmarked $3.3 billion for constructing the Science Park and $5 billion for implementing projects related to the development of scientific research. We greatly support the Government's decision. We also consider that there is a need for the Government to do so. Furthermore, the Government always harbours the hope that we can make unremitting efforts to improve ourselves in times of difficulty. It is indeed the wish of all wage earners that they can stand on their own feet and live in a stable condition in spite of all these difficulties. But under such a difficult situation, they will not be able to do so without assistance from the Government. This is very important indeed.

With these remarks, Madam President, I support the original motion moved by Dr LEONG.

PRESIDENT (in Cantonese): Mr Edward HO.

MR EDWARD HO (in Cantonese): Madam President, as Hong Kong is now in an unprecedented economic plight, the public has high expectation of the Chief Executive's policy address. Although the theme of this year's policy address is From Adversity to Opportunity, we can only find in it long-term strategies but not sound strategies for the problems we are facing, for instance, how the unemployment problem and other economic problems can be resolved. Certainly, we must admit that the Government has already adopted a series of measures to relieve people's hardship during the last eight to nine months. Realistically speaking, we should not regard the Government as omnipotent and capable of performing miracles. The problems we are facing do not only result from external factors but also because of the problems left behind by the former government.

The long speech of the Chief Executive lasts for two and a half hours and his policy address comprises 171 paragraphs. I think that paragraph 5 is probably the most important paragraph. In that paragraph, the Chief Executive stresses the adverse effects of the "bubble" economy in the past and an overly narrow economic base. These are precisely the problems left behind by the former government.

The public, probably including myself, are forgetful. Not long before the handover of sovereignty, property prices surged to a level hardly affordable by most people and Hong Kong became one of the cities in the world with the most expensive properties. The speculative activities on properties also pushed property prices to a higher level. Many people even gave up their original jobs, grabbed their mobile phones and joined the speculators in order to make quick bucks. At that time, whenever new properties were pushed onto the market, long queues appeared and the situation got out of control sometimes. Some people earned thousands of dollars by queuing up for the speculators.

This is an unhealthy phenomenon and I believe that this is rarely found in the world other than Hong Kong. Property speculation also immersed Hong Kong in a plight. Those who reaped profits from property speculation would certainly not oppose speculative activities on properties and some might even become happier. Although the Government adopted nominal measures for suppressing speculative activities on properties, there was after all a shortage in land and housing supply. That was the case at that time. The rate of inflation was a two-digit number which greatly crippled our ability to compete against our neighbours.

Madam President, a famous saying of a philosopher Santayana goes, "Those who cannot remember the past are condemned to repeat it". I am very glad that the Chief Executive has reminded us to bear this in mind and I agree that no matter how great the difficulties we are facing, it is essential for us to make a certain degree of adjustment.

We have to adjust such concepts as Hong Kong cannot persist over a long period of time by merely relying on itself. The continued open economic policy and growth of the Mainland will pose a threat on Hong Kong on the one hand, and provide a turning point on the other. The Chief Executive was right in going to great lengths in discussing the so-called challenges and opportunities brought about by the development of the Mainland.

As predicted, our population growth will be around 100 000 a year (but according to our experience, we may have underestimated this figure again). As the Mainland is utilizing its abundant human resources to consistently improve technologies, if the economic structure and development strategies of the Hong Kong Special Administrative Region (SAR) continues to fail to tie in with the Mainland, the SAR will not be able to compete with other regions or the Mainland. How will the job opportunities for 8.1 million Hong Kong people in the year 2011 come about? How can we provide reasonable housing and other public facilities to our gradually growing population? These are very important topics for discussion.

I definitely think that if the SAR is to maintain its competitiveness in the 21st century, in accordance with the principle of "one country, two systems", our planning and economic development should tie in with the Mainland, especially Southern China. I am very pleased that the Chief Executive has pledged that the Government will play a leading role in creating a favourable environment for co-operation between Hong Kong and the Mainland. This will be an important agenda item for the Government and the business sector in the next few years.

An item on the priority list is how the boundary crossing by the public can be made more convenient. Hong Kong and the Mainland must show their sincerity and determination to improve the formalities for crossing the boundary and the infrastructure, as well as the transportation between Hong Kong and China. If such improvements are successfully made, people within and beyond the boundary will definitely be given new opportunities and this will bring Hong Kong benefits in the long run.

Madam President, I would speak briefly in response to certain key points made in the policy address.

Housing and land

Firstly, the Chief Executive has stressed that stabilizing the property market is one of the four important factors for our economic revival. I welcome his remark. Last year, the Chief Executive set the objective of supplying 85 000 flats a year which aroused much misunderstanding and confusion among the community. Everybody knows that the supply of 35 000 private housing flats is fully dependent upon market needs and commercial considerations, but it is a pity that the high ranking government officials refused to recognize this fact then and they thought that these two points were not helpful. The confusion resulting from the housing construction objective includes giving people an impression that there was a guiding economy under the SAR Government, and this had made property developers and property investors panic, leading to a dramatic drop in property prices. This is one of the causes.

In fact, the housing construction objective of the Government is a progressive objective of housing and land supply. The number of private housing flats cannot and should not be determined by the Government at 35 000 a year. However, this message is released by the Chief Executive only in this year's policy address.

I find it necessary to review the supply of public housing as the Government tends to take the place of private developers. In any case, the Government should only be responsible for supplying land and infrastructure, and housing development should be private developers' business. Moreover, the Government should provide adequate public housing to those people who are not capable of buying their own homes or are renting private flats.

We must clearly define people in need of housing subsidies. The Liberal Party supports that the Government should carry out stringent income and assets tests on people waiting for public housing allocation, but the criteria for measuring income and assets must be reasonable and fair. For example, as some Members have just mentioned, we oppose using assets possessed only as tools for making a living which cannot generate real income or a certain income level for consideration of granting subsidy.

Moreover, property prices have dropped to such a level that users can afford to buy properties now, and it is a correct move to temporarily suspend the building of flats under the Sandwich Class Housing Scheme. By the same principle, I think that the number of Home Ownership Scheme flats offered should also be reduced. The Housing Authority (HA) should plan and build more public rental housing to shorten the waiting time. At present, there are more than 100 000 households on the Waiting List and they have genuine needs for public housing. Besides, the HA should build more public housing flats to expeditiously solve the housing problem of other people in need such as those living in cage homes, especially singleton tenants, people living in rooftop illegal structures and cottage areas as well as those affected by the urban renewal.

As regards the sites allocated for the Sandwich Class Housing Scheme and the Home Ownership Scheme, they can be used for mixed development. Assisted home purchase flats should also be provided by private developers to ensure quality.

The sale of land for private development should be resumed by the end of March 1999. The Government has suspended land sale for nine months and I do not think that this is generally supported by all developers. After the moratorium on land sale, there is no market price for land. Property prices are actually not affected or determined by land prices alone but mainly by the market response. The suspension of land sale not only affects the ability of small developers in buying land but also all industries related to the construction industry.

If it is the Government's is view that restoring confidence is one of the factors contributing to the recovery of our economy, it should first show its confidence by resuming land sale. In fact, there are many methods of ensuring that land prices will not fall to too low a level. The professional bodies in the functional constituency I represent have submitted many proposals to the Government. For example, a specified upset price or land sale by application. Moreover, payment of land prices by instalment can also assist developers in increasing working capital and alleviating their financial needs. Besides, the time limit for construction should also be extended.

Job opportunities

The Government has pledged to approve some infrastructure projects to help simulate our economy and create job opportunities. During debates in this Council and when speaking to the Chief Executive face to face, I have requested the Government to ensure that local professionals be given the greatest opportunity of taking part in local projects. This is not protectionism but I find that if local professionals can make long-term commitment to society and apply their local experience and professional skills, they can definitely bring the projects real benefits.

I also urge the Government to take the initiative to export our professional services to other regions such as the Mainland. Many mainland projects have been contracted to foreign companies as the heads or officials of those states have made efforts to promote their professional services.

Relationship between the executive and the legislature

Madam President, finally I hope to cite the example of the Victoria Harbour reclamation project to illustrate how problems can be avoided in respect of the relationship between the executive and the legislature as well as how the relationship between the two can be improved. Everybody knows that the Government may have to make material amendments to the reclamation project for Wan Chai and part of Southeast Kowloon as all Members of the Council unanimously oppose the Central Harbour reclamation project. If the executive holds discussion with the Legislative Council before it makes any decision, the above situation can easily be avoided and there will be less waste of the efforts and resources of the executive.

As time is limited, I cannot discuss in detail all the points made in the Chief Executive's policy address. The policy address is elaborate; it covers a wide scope and creates opportunities for long-term development. Although it comprises mostly long-term policies, if plans are not made, such opportunities will never arise. Furthermore, the Chief Executive has pointed out four essential factors for economic revival but I think that a fifth essential factor is competitiveness. If our competitiveness is not enhanced, Hong Kong will not enjoy long-lasting prosperity.

Madam President, I so submit in support of the motion.

PRESIDENT (in Cantonese): Mr CHEUNG Man-kwong.

MR CHEUNG MAN-KWONG (in Cantonese): Madam President, at the time of the handover, the education sector had great expectation of Mr TUNG Chee-hwa as Mr TUNG said that he regarded education highly. However, one year after the handover, our expectation has turned into disappointment and we only find an education policy that has changed in form but not content. More disappointing is the fact that certain errors made during the colonial era have been intensified after the handover to the detriment of the interests of the education sector and students.

The first error is attaching importance to quantity but not quality. The education sector supports the whole-day schooling policy but the primary school class size will increase to 37 while the secondary school class size will remain at 40 after the implementation of this policy. This policy of increasing primary school class size will most probably be maintained for 10 years. In other words, students will still have to attend classes in crammed classrooms within 10 years and teachers will hardly be able to fully attend to the individual differences of students. Therefore, the whole-day schooling system as proposed by Mr TUNG Chee-hwa has emphasized quantity instead of quality to the disbenefit of students' interests.

The second error is discrimination and division. Mr TUNG Chee-hwa likes to follow the example of Singapore and advocates elitism. He has turned the so-called quality education into education for outstanding people and there are only famous schools and elite in his eyes. Mother tongue teaching has created 114 elite English secondary schools while information technology education will create 250 elite computer schools. Some quality private schools will also be created, artificially bringing about division and discrimination among schools and students. The Education and Manpower Bureau has become a bureau for education, division and discrimination. It has forgotten that education must look after every student, regardless of whether they are elite or ordinary students, rich or poor.

The third error is formalism. Information technology education is only about distributing high-grade computers while the teacher training scheme has almost failed. The Government only knows that computer hardware should be purchased but forgets the necessary development of computer software. It only knows that computer technology has to be emphasized but forgets that children should be provided with computers. Computer technology is sophisticated but the Government adopts the mode of a socialist planned economy and exercises centralized authority in respect of hardware procurement, installation and teacher training. As a result, the cart is put before the horse, unwanted goods are purchased and the scheme a failure.

The fourth error is the spoon-fed policy. The spoon-fed policy originally stands for colonial education but now the only difference is that the students who used to be spoon-fed by the British Hong Kong Administration are now spoon-fed by the Government of the Special Administrative Region (SAR). Let us take a look at the schoolbags of students which are getting increasingly heavy. The school curricula have become richer and the number of subjects have increased rather than decreased, examples being Putonghua, information technology and civic education. Even though these additions are reasonable, as outdated or backward courses have not decreased correspondingly, the spoon-fed ducks become even fatter and the SAR spoon-fed ducks are turned into SAR swollen ducks. As a result, students, parents and teachers suffer.

The fifth error is the freezer policy. The kindergarten and special education policies which have been consigned to limbo are still kept in the freezer. University education has newly joined those policies in the freezer. So far, even the target of having 40% trained teachers in every kindergarten has not been reached. Is the Government ashamed? The gift for special education this year is the installation of air conditioners in 17 schools. Is the Government blushing with shame? For university education, there will be an increase in research students but funds will be cut and tuition fees frozen. Does the Government feel ashamed at its refusal to pay? The freezer has cooled down the enthusiasm of teachers and professors. When will the snow melt?

As far as education is concerned, Mr TUNG Chee-hwa has given us hope and we have been expecting the approach of Spring. Now that Spring as marked on the calendar is constantly late, the education sector is extremely disappointed and I wonder if Mr TUNG Chee-hwa has heard the voice of the sector.

Madam President, after the financial turmoil, an extremely pressing economic problem has arisen. Where should our economy go? If our economy has only one locomotive, it must then be the property industry driving the monetary industry and the services industry. In future, it is most likely that we will suffer pain when the economic "bubble" bursts again. If the so-called "from adversity to opportunity" is to be realized, we have to seek a direction for diversified development in an economic recession.

The $2.5 billion loan for small and medium-sized enterprises (SMEs) as proposed by the Government is the first step in reforming our economic structure. However, only $0.2 billion has so far been lent, less than 10% of the total amount. Why is there such an absurd situation that some people do not borrow the money while some cannot borrow money? Has the scheme failed because of excessively high interests, overly complicated formalities, unrealistically short repayment periods or restricively stringent mortgage procedures? I oppose the Government's plan to review this scheme only at the beginning of next year as the development of SMEs is not only favourable to the industrial and business sectors but also to relieving the unemployment problem which is the most serious problem now. Let us think about this: With $2.5 billion, how many job opportunities can be created and how many people can stop feeling helpless?

A few days ago, an unemployed worker won the chance to purchase a Home Ownership Scheme (HOS) flat but he made a suicidal jump as he was worried that he could not afford to make the mortgage payments. In the past, winning the chance to purchase a HOS flat was a happy event but it has now become a tragic event that speeds up people's death. Madam President, unemployment has become Hong Kong people's number one enemy. However, Mr TUNG Chee-kwa does not seek to solve the unemployment problem and he only knows how to shout the slogan that 13 centres have to be built for the future of Hong Kong. These centres cover the financial, technology and cultural sectors as well as the Chinese medicine sector. This shows that Mr TUNG is aiming too high, craving for greatness and success while forgetting that unemployed families have "three withouts"; they are without money, rice and assistance. For these "three-without" families, Mr TUNG's great plan for building up Hong Kong has shown that he is just like Emperor Hui in the Jin Dynasty who wondered why the poor people did not eat meat, ridiculed for knowing nothing about the hardships of the people.

Mr TUNG Chee-hwa wants to build 13 centres in Hong Kong which are really too many. He is too inconstant. Inconstant love is shallow and too many centres is the same as no centre at all. However, I welcome the establishment of an innovative technology centre led by Prof TIEN Chang-lin. The Government has invested $5 billion which is a considerable sum when it is financially tight, but it has to use money carefully. It certainly has to spend money on research in innovation and technology, but it must definitely not spend money arbitrarily or become a spendthrift. I hope that the Government will carefully monitor all schemes subsidized by public money and it should not allow the $5 billion to be wasted and the earnest expectation of Hong Kong people to be disappointed. It should not let the technology centre become a big white elephant or a rose garden.

Madam President, having enjoyed prosperity for some 20 years, we have forgotten the pains of a recession. Recession and hardships are right in front of us now. One misfortune comes in the wake of another and the Government suffering from poverty and ill health is in great sorrow. In the past year, the Government was criticized for not being capable of meeting emergencies and it made many mistakes in respect of the avian flu incident, the new airport, medical blunders and the financial turmoil. The popularity of Mr TUNG Chee-hwa with people has substantially declined just like the stock market. There are numerous articles rebuking Mr TUNG Chee-hwa's administration. Mr TUNG should have heard these voices but he has not made any apologies in the policy address. He has only mentioned casually that "we must and we will strive to do better". Typical of articles in the People's Daily, Mr TUNG Chee-hwa has totally lost his memory and is absolutely evasive in the face of material mistakes. He is not capable of examining himself when a responsible government must be able to conduct self-examination. Therefore, this Council should rightly cast him a vote of regret.

Madam President, what kind of government do we want? Being unselfish, not resentful and feeling no qualms are personal cultivation that can make a good person, but a good person may not necessarily be able to lead a good government. Mr JIANG Zemin said that Mr TUNG Chee-hwa was good while Mr ZHU Rongji said that he was very satisfied with Mr TUNG's performance. However, the praises of the supreme leaders will only mock at the will of the people and it can only illustrate that the Central Government is indeed too far away from Hong Kong people and it fails to observe Hong Kong people's resentment, anger and sentiments. Therefore, Hong Kong people remarked that Mr TUNG Chee-hwa was incompetent and incapable. In their eyes, Mr TUNG has five rather than three withouts. Let us imagine this. As people's minds have changed in just a year's time, how is Mr TUNG going to face the next four years that will be even harder? We admittedly have pity for an old man aged 61 with white hair and black eye rim, but Hong Kong needs a government that encourages the free airing of views, listens to both sides and becomes enlightened, will boldly examine itself and admits its errors instead of a good leader who wishes to fight the floods with people's flesh and blood.

Madam President, after the handover, the political situation has stabilized and the Central Government has basically fulfilled its pledge of not interfering in Hong Kong and letting Hong Kong people run Hong Kong. However, Hong Kong people refer to all Hong Kong people, including various political parties and views in the Council. Nevertheless, in the past year, Mr TUNG Chee-hwa could still not stop keeping a wary eye on the Democratic Party; he regarded the Democratic Party as a burden and a stone blocking his way in administering Hong Kong. Even though he cannot get rid of the Democratic Party, he tries his best to evade them. However, I must say that the Democratic Party sincerely hopes that Hong Kong will succeed and we are sincerely willing to build up Hong Kong. Our criticisms are sometimes right and other times wrong but we try our best to perform our tasks as Members and reflect people's wishes in the Council. Mr TUNG, please do not fear or evade; please put down the burden and regard the voice of the Democratic Party as a voice of Hong Kong people and the strength for running Hong Kong. This way, we are really pulling the wisdom and concerted efforts of everyone as described by the title of the policy address and as Mr TUNG earnestly expected.

Madam President, I so submit.

PRESIDENT (in Cantonese): Dr Philip WONG.

DR PHILIP WONG (in Cantonese): Madam President, the most prominent feature of this year's policy is that it is pragmatic and deals with concrete matters. There are no exaggerated slogans and pledges and it briefs the public on the current economic plight in an extremely frank way. It lets the public know clearly about the actual situation in Hong Kong: there are difficulties and prospects.

We admittedly understand that ordinary people expect the policy address to provide sound solutions and give emergency treatment to the current economic plight and some people are understandably disappointed at the fact that the policy address has failed to satisfy their demands. However, the Chief Executive knows it very well that people have difficulties, but he only proposes in the policy address medium- and long-term policy objectives rather than first-aid measures. This proves two points. First, the Government has all along adopted various possible and feasible short- and medium-term remedial measures for tackling the difficulties and alleviating people's hardships. The measures it has taken within the scope of its abilities include giving tax concessions, freezing charges and expanding infrastructures. It can be said that it has actually done many things within its capability. Therefore, it is impossible for the Government to put forward some new measures for the moment for the sake of the policy address as this is unrealistic and dangerous. Second, the Government attaches great importance to the pledges it made to the public and it is not willing to gloss over the policy address with appealing lies and false pledges. It only insists on acting according to its capability and serving the public faithfully. This attitude alone should have enhanced our confidence in the policy address. The Chief Executive's attitude of briefing the public before making suggestions and making requests will help the community know the situation clearly, unite as one and pull their wisdom and efforts together to tide over the difficulties together.

While we are actively looking for methods to alleviate people's hardships, we have to face the reality squarely. The key to solving Hong Kong's plight is the international atmosphere and what Hong Kong can do on its own is after all limited. To this end, although we have the responsibilities of monitoring the Government and reminding it to do better, we should not overlook the international atmosphere and negate the Government's efforts, otherwise, I am afraid that we will outsmart ourselves.

On the whole, I am in favour of the policy address. I would like to make three points about the relevant policies and measures proposed in the policy address.

Firstly, in recent years, China has strongly advocated "building up the country with technology and education" and it has created the requisite market conditions for creating a knowledge-based economy. President JIANG Zemin and Premier ZHU Rongji have stressed once and again that without technology and innovations, we are always trailing along behind others and our economy will forever be subject to external control. The policy address of the Chief Executive has made me allude to the motion of building up Hong Kong with technology and education. To implement the Chief Executive's proposal to turn adversity into opportunity, and to consider the prospect of our economy, building up Hong Kong with technology and education is a sound strategy indeed. We can see that our neighbours are developing in this direction and if we give no thought to or even knows nothing about this, we will lag behind our competitors.

In my opinion, we should not lightly give up just because we have started later. It is because Hong Kong people are always more adaptable and better at overcoming difficulties. We are good at learning from others' experience and derive unique advantages and results from our conditions.

Secondly, as we all know, the whole world is now encountering the financial crises in Asia, Latin America and Russia. There are internal and external causes for the formation and explosion of these crises. According to the regular pattern of economic cycles, when the economic development of a country or region has reached a certain stage, it unavoidably has to make adjustments. On the other hand, international speculators supported by certain western forces aim particularly at the potential structural imbalance, errors and loopholes of emerging markets. They first initiate a multimedia "psychological battle" to crumble the "psychological defence" of their preys and then carry out a series of attacks and plunders. They make elaborate plans and collaborate from within with forces from without, hoping to achieve specific economic and political aims. Such regional and even global financial crises have increasingly wide-ranging effects and they even make a clean sweep of the "backyards" of those financial bandits themselves and inflict casualties on the United States hedge funds. Such complicated and profound international crises cannot be resolved by anyone alone.

The Hong Kong financial markets are characterized by a high degree of internationalization and openness and the free flow of capital. These features have given us opportunities on the one hand and opened up Hong Kong to challenges and tests on the other. Like other places, Hong Kong was raided by international speculators and suffered heavy losses in the latest crisis. One lesson to be learnt is that we should discover problems early, look squarely at them and take the initiative to clear up corrupt practices, to plug loopholes vulnerable to manipulation. Looking back at the time before the British pulled out, to make their interests last, they maintained their composure while making a number of deliberate plans. For instance, after the stock market disaster in 1987, the Government published the DAVIS report within a very short time which set people thinking. As DAVIS had just arrived at that time, it was indeed miraculous for him to make dozens of recommendations for reforming the securities market of Hong Kong all of a sudden. It is rational for us to query this "miracle". Therefore, we have reasons to infer that the British had actually prepared long ago a package that would facilitate international speculators' slaughter. Among the contents of the package was the import of derivatives with extremely high risks. The British were just waiting for the right moment to throw out the package while waving a pretty flag. As far as our financial system is concerned, the British had juggled things, played tricks and mapped out details. This was no secret and people's worries were not unnecessary. I am pointing this out not because I oppose a financial reform and the development of foreign investors in Hong Kong. I always advocate the establishment of a fair and impartial system that tallies with the actual situation of Hong Kong and safeguards the legitimate interests of Hong Kong people. We should not sacrifice Hong Kong people's wealth to satisfy the appetite of foreign invaders. What happened in the past year has illustrated that international speculators succeeded again and again and kept coming back precisely because they knew the Achilles heel of our financial system too well, therefore, they could exploit the loopholes "lawfully". Under such circumstances, a responsible government can and should adopt corresponding measures to perfect the system, plug the loopholes, train up qualified personnel and consolidate its foundation. In the coming days, it should consider a prudent review of the relevant legislation enacted during the last years of the British rule in Hong Kong, to establish and perfect a mechanism for guarding against financial risks and upholding fairness and order in the market as well as ensuring that our economy is safe.

Thirdly, after Hong Kong has been hit by the financial turmoil, economic adjustments were made and the "bubble" components left behind by the British Hong Kong Administration were removed, but unfavourable factors have surfaced before our eyes at the same time. As compared with other regions, although Hong Kong still have a lot of difficulties and the hard days are not yet over, looking forward to the future, our economic situation has become clearer and is improving.

In my opinion, our plight is transient, and the reasons are as follows:

1. Hong Kong enjoys exceptional geographical advantages; it has an excellent infrastructure and a huge foreign exchange reserve; its economic foundation is still firm and it has relatively sound legal and banking systems.

2. Hong Kong people have rich and flexible free market experience and precious pioneering spirits.

3. Our per capita output and per capita purchasing power still ranks among the highest in the world.

4. After the Government has ameliorated such external factors as weakened US dollar and decreased US interest rate, and enhanced monitoring and the hedge funds have got burnt from playing fire, there are signs showing the contra flow of capital, a declining interest rate and an improvement in the market atmosphere; all these will help consumers regain confidence and check the unemployment rate.

5. There is the mainland China which has huge resources, a large market and a growing economy at the back of Hong Kong. As the major entrepot and financial, trade, tourist, communications and information centres of China, Hong Kong has enjoyed benefits throughout the years. With this China factor, investors all over the world keep rushing to Hong Kong, pushing up demands in the stock and property markets and stimulating the revival of various trades and industries.

In my view, as compared with the Eighth Five-Year Plan, the Ninth Five- Year Plan now implemented in the Mainland will better promotes our economy. In particular, vitalizing the central and western part of China and the strategic reorganization of state enterprises will bring about huge capital demands. Furthermore, after the floods, the urgent need to rebuild people's home towns and build infrastructure gives the Hong Kong financial and capital markets new opportunities. So long as we base ourselves upon Hong Kong and face the world with our motherland at our back, and make efforts to fight, coupled with various internal and external factors, we can be assured of economic revival and the development of innovation and technology and so on.

In the past, Hong Kong people went through great storms and they headed off the disasters after all. At such extraordinary times, everyone of us should have a sense of responsibility for the community and our future. For the interests of Hong Kong as a whole and our well-being in the future, we should make concerted efforts, help each other and support the Special Administrative Region Government and the Chief Executive in performing their duties. In all fairness, the policy address is the Government's projection of the future of Hong Kong and the real outcome will depend on the earnest creation of some 6 million Hong Kong people and our firm belief in the Government. We are going to put the bright future of Hong Kong in the hands of all Hong Kong people who will work hard and make unremitting efforts, and we cannot expect the Government to solve all problems for the public overnight. We have the right to monitor the Government and comment on its administration, but the views we express should be objective and impartial, practical, realistic and constructive. Certainly, we hope that the Government will listen to the views and suggestions of the public and professionals from various sectors with an open mind, conscientiously analyse them and choose to follow good advice. Most important of all, a good government should draw on collective wisdom and humbly accept criticism instead of allowing mistakes to last for the sake of face-saving.

Madam President, I so submit.

PRESIDENT (in Cantonese): Mr WONG Yung-kan.

MR WONG YUNG-KAN (in Cantonese): Madam President, while Hong Kong is being enveloped by the shadow of the financial turmoil, the Chief Executive, Mr TUNG Chee-hwa, presented the second policy address within his term of office aimed at turning adversity into opportunity. Although it does not offer any panacea which can immediately revive our economy, it sets the direction for future development and makes forward-looking suggestions. This helps enhance our competitiveness in the future and when our economy revives, Hong Kong can again compete strongly with other countries.

In the policy address, the Chief Executive has touched upon the future development of almost all trades and industries in Hong Kong but he has mentioned nothing about agriculture and fisheries. As a Member of the Council representing the agriculture and fisheries sector, I would like to say that the sector and I are very disappointed. As the primary industry of Hong Kong, agriculture and fisheries has never been regarded highly by the Government. During the time of the former British Hong Kong Government in particular, agriculture and fisheries was regarded as not indispensable. However, after the handover, the addition of an agriculture and fisheries functional constituency to the Legislative Council makes the sector and I think that we see the bright moon at last after having waited so long for the clouds to clear. But the situation has remained the same. Does the Government think that agriculture and fisheries is devoid of any merit and not worth mentioning?

Agriculture and fisheries has contributed much to our economy and people's livelihood. Many non-staple foods consumed by the public every day come from the local agriculture and fisheries industry. The figures in 1997 showed that agriculture and fisheries supplied the public with 13% vegetables, 19% live poultry, 19% live pigs, 12% freshwater fish and 69% live and fresh marine fish and it had a total output value of more than $3 billion. Agriculture and fisheries is obviously still productive and it plays an essential role in supplying non-staple food.

I find it disappointing that the Government has only adopted piecemeal measures, without a comprehensive plan for assisting agriculture and fisheries. However, we cannot say that the Government is different to agriculture and fisheries. When material problems arise, the Government will give us assistance. For instance, in the avian flu incident early this year, the Government allocated $80 million to the Kadoorie Agricultural Aid Loan Fund (because of the green era), to extend to the affected owners of poultry farms low-interest loans to assist them in tiding over the difficulties. This April, the Government allocated $0.2 billion and $17 million respectively to the Kadoorie Agricultural Aid Loan Fund and emergency assistance fund to offer mariculturists affected by the red tide low-interest loans or financial assistance. Furthermore, last year, the Government injected $0.1 billion to the fisheries development fund, for which capture fishermen could apply in order to renovate their vessels for deep-sea fishing. Nevertheless, the former British Hong Kong Government has not done so.

It can be seen from the above that the Government is still concerned about agriculture and fisheries but it has still failed to formulate a long-term policy for the development of agriculture and fisheries and give the industry adequate support. On the contrary, our neighbouring countries and regions such as Japan, Singapore, South Korea, Taiwan, Malaysia, Thailand and Indonesia attach great importance to agriculture and fisheries and have formulated supportive policies. As we are weakening while they are growing stronger, the competitiveness of our agriculture and fisheries products in the markets for domestic and foreign sales have gradually been crippled.

I have stressed time and again that agriculture and fisheries is not a sunset industry. So long as the Government can give it more attention, it will certainly find room for development. I hope that the Government of the Special Administrative Region (SAR) can allocate resources, establish a agriculture and fisheries research centre and assist the sector in adapting and rapidly responding to the changes in the natural environment, market demands and consumer preferences in pursuit of the greatest economic results. I do not expect the Government remark like the one made by the Director of Agriculture and Fisheries that the Government has already established an industry support fund for application by tertiary institutions to carry out researches. We have to admit that it is a passive act for tertiary institutions to carry out researches. With the initiative not lying with the Agriculture and Fisheries Department or those in the industry, it will not give much help to the development of agriculture and fisheries. On the other hand, China has already proposed building agriculture with technology and education.

In regard to financial support, although the Agriculture and Fisheries Department under the Government is now responsible for managing seven loan funds, most loans are used to assist the industry in buying general tools and meeting emergency needs in the event of natural disasters, and it plays a minor role in importing advanced production tools and technologies. The Government should establish adequate loan funds just like what is done in some foreign countries. In these foreign countries, the industry is given interest-free or low-interest loans to allow them to import advanced production tools and catch up with countries and regions having advanced agriculture and fisheries.

Madam President, the future development of agriculture and fisheries inevitably needs the co-ordination with China. Hong Kong is intimately related to such provinces in the Mainland as Guangdong, Guangxi, Hainan and Fujian and a lot of farms and cultivated land, fishing waters and marine fish culture farms are situated near Shenzhen and Zhuhai. Besides, the marine territories in many mainland provinces are concurrently the fish farms of Hong Kong capture fishermen. At the coastal regions are fish culture farms and farms invested by Hong Kong people and many non-staple agriculture and fisheries products are transported to Hong Kong every day. Therefore, the SAR Government and the mainland government must enhance co-operation and technological exchange to strengthen agriculture and fisheries management, work out an appropriate policy for the import of non-staple agriculture and fisheries products to Hong Kong, put an end to the smuggling of such products to Hong Kong and help to track down farms using illicit drugs and excessive agricultural pesticides, as well as control the unlawful fishing activities of mainland fishermen.

Furthermore, as agriculture and fisheries products are closely linked with people's health, the Government should establish a sound quality and sanitation monitoring system for agriculture and fisheries products so that the origins can be expeditiously traced when incidents happen to minimize the adverse effects.

Madam President, having discussed about the development of agriculture and fisheries, I would like to discuss about marine pollution which is the concern of fishermen. This is the International Marine Year and the Democratic Alliance for the Betterment of Hong Kong (DAB) has launched a series of "I love the ocean" activities not long ago. However, the Government's participation is insufficient. The policy address has mainly focused on infrastructure. Although the DAB recognizes the importance of infrastructure, we find it a bit too narrow if the Government regards this as a long-term policy for marine protection.

The DAB is of the view that besides sewage, the damage done to the ocean by the Government's incessant dredging and dumping is not in any way less than that done by sewage. Since the 1960s, 3 600 hectares of hand have been reclaimed in the Victoria Harbour. From the beginning of the 1990s to 1997, to meet building needs, 260 million cu m of marine sand has been dredged from our seabed and 1 billion cu m more has to be dredged in the next 10 years. Our seabed has already been distorted beyond recognition and it is a vain hope that marine species will be attracted to inhabit there. A more serious problem is that the Government is now preparing to fill sludge back into mud pits and this will once again damage our seabed which originally has the hope of being restored. The DAB thinks that the Government must formulate a long-term policy for marine protection while protecting the quality of marine water to avoid attending to one thing and losing sight of another.

Madam President, when we are walking in the street these days, we often find people walking quickly with their noses covered. Undeniably, the air quality in Hong Kong has become so poor that it is upsetting our daily lives. The Liquefied Petroleum Gas (LPG) Taxi Pilot Scheme launched by the Government last year is drawing to an end and the policy address and the consultation paper just published have made many specific proposals and points of concern. However, the effective implementation of the LPG Taxi Pilot Scheme is dependent upon economic factors, the number of refilling stations, the support and charges of repair technologies. Moreover, we also have to listen more to the views of those in the industry.

However, a fatal drawback of the LPG vehicle scheme is that it is not applicable to large vehicles and the Government has not formulated any effective improvements measures. The DAB thinks that the Government is only sticking blindly to the use of petrol in place of diesel and it has not taken pains to conduct research on substitute fuels. In foreign countries, cooking oil has been used as vehicle fuel and the respirable suspended particulates in the exhaust of vehicles burning cooking oil is less than that of vehicles burning ordinary diesel. The United States has enacted legislation to recognize this transformed "biological diesel" as an alternative fuel. Therefore, the DAB hopes that the Government will carry out more studies in this regard so that large vehicles can become cleaner and the recycling concept can be better realized.

In implementing environmental protection, the public always holds a misconception that environmental protection means expenses and investing in environmental protection is like pouring money down the drain. The DAB is of the view that a new direction for future economic development is to co-ordinate it with environmental protection. Let us take the recycling industry as an example. Several hundred tonnes of waste are produced in Hong Kong every day but the recycling industry is ironically dwindling. Obviously, it is the result of a lack of financial support, the difficulties in collection and inadequate investment. However, the Government has been indifferent to supporting the industry. The DAB thinks that the Government should not regard supporting the recycling industry as an economic policy but one of the important policies for environmental protection. In so doing, in addition to utilizing the resources of the world more effectively and generating wealth for Hong Kong, the pressure and operational costs of various waste disposal methods will be greatly reduced.

Lastly, Madam President, I would like to express my views on urban renewal. The section of the policy address about urban renewal is disappointing. Besides stating once again that an Urban Renewal Authority will be set up by the end of next year and that renewal policies will be considered, the only point worth praising is that the time taken to complete urban renewal projects has been reduced from an average of 12 years to six years. This suggestion will undoubtedly help to pace up the renewal project, but the policy address has not made concrete suggestions for achieving the aim.

Moreover, in the course of urban renewal, the most time consuming step is land resumption. Owners and developers often hold long discussions over compensation. The DAB is worried whether the Government will amend the legislation to speed up urban renewal projects to give the Government, the Land Development Corporation (or the future Urban Renewal Authority) and even private developers more power to resume buildings. For instance, I wonder if it will simplify the requirements for invoking the Lands Resumption Ordinance or even allow private developers to invoke the relevant legislation. Although the DAB supports giving the Urban Renewal Authority adequate power, its power has to be duly balanced to avoid excessively harming the interests of small owners.

The policy address has not mentioned how private developers can be encouraged to continue to take part in urban renewal. All along, part of the local housing supply comes from urban renewal while a large part comes from private developments, and this will remain the same in the future. Since certain more profitable sites in older area have already been redeveloped by developers, developers may be less willing to take part in other urban renewal projects in the future. As there has recently been a property market slump and there can hardly be a material change in our economic situation in the near future, therefore, developers will naturally be much less willing to take part in urban renewal projects.

Mr Bowen LEUNG, the Secretary for Planning, Environment and Lands, has said earlier that the Government will inject capital into the Urban Renewal Authority for urban renewal. Now that the economic situation has worsened, the DAB welcomes the Government's willingness to make such a commitment. However, in the long run, the Government should attract private developers to continue to take part in urban renewal projects. The DAB suggests that the Government can offer them more advantages such as widely pursuing linked sites, relaxing the plot ratio of older areas and giving regnant premium concessions.

Thank you, Madam President.

PRESIDENT (in Cantonese): Mrs Miriam LAU.

MRS MIRIAM LAU (in Cantonese): Madam President, for many years I have been calling on the Government to develop more transportation infrastructure as a form of investment for Hong Kong's future. At that time the local economy was robust and the building of infrastructure facilities therefore had to meet the demands of the territory's development. Now with the economic downturn, there is all the more a need to continue investing in construction projects. This is not as simple as creating employment opportunities, but spurring the growth of the economy. More importantly, this will equip the territory to seize any opportunity that may arise with economic recovery.

I welcome the pledge made by the Chief Executive that there would be sufficient government resources to carry out all major infrastructure projects with funds that had been set aside for the next five years. The Government will also study into the possibility of shortening the completion time for infrastructure projects by 15%. I think that is very important and I give my full support to it. The commitment made by the Government in infrastructure projects alone will not be able to turn the territory "from adversity to opportunity". The Chief Executive in his policy address has outlined his plans to stimulate economic growth. He is of the view that innovation and technology are the major driving forces of economic growth.

I support the idea that we should invest in innovation and technology for the future development of Hong Kong. For we are lagging behind others in this respect and so we must catch up. But it takes time to develop technology and undertake manpower training. If we want to revive the Hong Kong economy within a relatively short span of time, we must find some other engines of growth. The financial turmoil has made us wake up to the fact that Hong Kong cannot rely on finance and real estate alone. But do we have nothing except these two sectors? No, not at all. There are many sectors which occupy a very important position in our economic system and which still have a certain competitive edge. It is only that the Government has not paid enough attention to these sectors in the past. The shipping and freight-forwarding industries are examples. If only the Government can treasure the advantages of these trades that still exist, and to implement matching policies and give proper assistance, these trades will become new engines of growth and will surely lift the territory out of the abyss of recession.

Revive the shipping industry and to make good use of the competitive edge of the sea, land and air freight-forwarding industries

Hong Kong is an international shipping centre, the busiest container port in the world and a global airfreight centre. But success should not be taken for granted. The increasing competition from other countries, the slackening of the volume of sea, land and air freight, plus the exorbitant operation costs and the lack of government support, have all undermined the leading position of Hong Kong in these three areas. Take the shipping industry as an example, the carriage capacity of the Hong Kong merchant fleet has been declining at an annual rate of 3.4% since the onset of the 1990s. The share of the carriage capacity of the local merchant fleet in the world has declined from 11.5% in 1990 to 7.6% in 1997. The number of locally registered vessels has been dropping all the time. Five years ago, 592 vessels were registered in Hong Kong with a total tonnage of 8 million tonnes. But in September this year, only 481 vessels were registered in Hong Kong, and the total tonnage had dropped to 6.07 million tonnes.

During the 1960s and the 1970s, the shipping industry in Hong Kong was at its heyday. The merchant fleet occupied a 12% share of the world carriage capacity and that had earned the territory the reputation of being the international shipping centre of the Far East. But the lack of government attention to the shipping industry led to a slow growth and even a decline in the industry itself, together with related industries such as marine insurance, arbitration, vessel leasing, shipbuilding and repairing, vessel supply and shipping management. Over the past two decades or so, the focus of the Government has been placed on port facilities. This has made Hong Kong fail to compete with other shipping centres like London. But in fact Hong Kong has the potentials to further develop its shipping and related industries and enable it to be a truly shipping centre.

As for the situation in the container port and airfreight industry, I had expressed my worries in the debates on 25 February and 23 September in this Council. I asked the Government to look seriously into the matter of the slackening growth in cargo volume and the current difficulties and challenges faced by the freight transport industry as a whole. But the impression I got from the Government was that they believed in luck more than anything else. They believed that if only the infrastructure was there, loads of cargo would come of their own accord and the position of the territory as an important container port would still stand unchallenged.

On the contrary, our competitors get full support from their governments in terms of infrastructure and policies. But the Hong Kong Government still cling to its own philosophy of "active non-intervention". If that is allowed to go on, Hong Kong will definitely lose its competitive edge. To revive the shipping industry and to steer out of the economic doldrums, the Government must take some proactive policies and foster an environment conducive to the development of sea, land and air freight transport industries.

As far as shipping is concerned, there are many proposals that merit consideration by the Government. These include the use of preferential policies to attract more ships to register in Hong Kong and encourage more shipping companies to set up offices or secretariats here. For example, consideration can be given to model on Singapore and give a 10-year tax exemption concession for overseas shipping companies, assist shipping companies to secure low-interest loans to upgrade their fleet, start and develop shipping education, train people for shipping management positions, and to encourage the development of related industries such as ship repairing and marine insurance. The Government should encourage the Port and Shipping Authority to set up a shipping studies and resource centre in order to facilitate the growth of the shipping industry.

As for the airfreight industry, I have said in a motion debate on this topic on 23 September that the Government should actively encourage the shipping industry to develop its own logistics management centre. This kind of business development will not only promote the growth of the airfreight industry but is also very beneficial to the seafreight industry as well. I think Hong Kong has all the favourable factors to become a regional logistics management centre. All we lack are just the support from government policies and land resources. Therefore, I urge the Government to study into this aspect.

The expensive land transport costs have undermined the competitiveness of the Hong Kong freight transport industry. The Government should actively study into the ways to help the land transportation industry reduce its operation costs, including reducing the customs clearance time for goods vehicles and container vehicles; handle land use flexibly and provide enough land for logistic support for use by the freight transport industry. Besides, the Government of the Special Administrative Region should discuss with the mainland government to reduce the large amount of fees and taxes levied under various names chargeable on goods vehicles. The Government should also discuss with the Mainland to revoke the regulation which requires container trucks to go through customs together with the containers, thus allowing containers and container trucks to be dealt with separately and containers can be stored in either places and so increasing the efficiency in operation of the freight transport industry.

The leading position that the local sea and air freight industries enjoy at present is related to the high efficiency of the river trade and land freight transport. To maintain the competitive edge of the territory in freight transport, there is a need to maintain a diversified transport system to enable the consignor to choose the mode of freight transport as he thinks fit. The river trade terminal which opened last week would certainly bring some beneficial impact on land freight transport and cargo handling areas. In terms of cost-effectiveness, river trade is better than land freight transport. It is because the river trade terminal has much more advanced facilities than cargo handling areas. But land transport is more flexible and it may be better to handle bulk cargo in cargo handling areas. If only the operation costs can be reduced, they can still compete with river trade terminals. In this regard, I urge the Government to complete the reforms in these cargo handling areas and give appropriate assistance to the sector so that each segment in the transport system can bring their functions into full play. I should like to mention in passing that there is a severe shortage of typhoon shelters and I hope that the Government can finalize the plans for typhoon shelters in Ping Chau and Siu Lam, so that cargo vessels can have a shelter to go when there is typhoon.

Creating a favourable environment for competition

The Chief Executive in his policy address stressed that the Mainland gave a strong hand in furthering our economic development and the Commission on Strategic Development also emphasized that Hong Kong's close ties with the Mainland was one of its competitive edges. But I wish to point out that in the past, the Mainland relied on Hong Kong to be an entrepot and so it was our trading partner; now with the improvements made in infrastructure and other matching facilities, the Mainland is emerging as our main rival. Although Hong Kong is now returned to China, it has not been given equal treatment with the other provinces and cities in the Mainland. Therefore, operating costs have been raised for the Hong Kong businessmen and our competitiveness in sea and land freight transport has been reduced.

At present, Hong Kong vessels are treated as foreign vessels like those from other countries and are subject to charges which are higher than mainland vessels. This makes our vessels less competitive. The Government should therefore negotiate with the mainland government to treat vessels registered in Hong Kong in the same way as Chinese river trade vessels and to make Hong Kong vessels receive reciprocal treatment in mainland ports. Moreover, pleasure boats registered in Hong Kong have to undergo very cumbersome port entry procedures when they visit mainland ports. The Government can discuss with the mainland government on the issue of simplifying port entry procedures in order to facilitate Hong Kong sightseeing vessels visiting the Mainland.

There exists unfair competition between land and sea passenger transport. Passengers who depart by land are not required to pay any tax, but those who depart by sea have to pay a passenger embarkation fee of $18. Although the Financial Secretary had lowered the passenger embarkation fee by 28% this February, the charge of $18 is still high in relation to the fare of about $100. In a bid to promote tourism, the Government has slashed the air passenger departure tax by 50%. I therefore ask the Government to further reduce or even cancel the passenger embarkation fee.

Fully utilize the carriage capacity of public transport

In the policy initiatives, the Government aims at increasing the share of railway and public bus services in the overall passenger carrying capacity in public means of transport to two thirds of the total. I agree with the Government's expansion of mass transit systems. But it should also be concerned with the roles played by other means of public transport, in order to fully utilize the overall carriage capacity of public transport.

As taxis and minibuses are privately owned, their numbers will not decrease as a result of the development of mass transit systems. But their living space will become smaller and smaller. To tie in with the development of the districts, I think the Government should increase the efficiency of taxis and minibuses in providing links to mass carriers. Effective links between different modes of transport will provide a highly-efficient integrated transport service to the public. This should be the direction of the development of public transport.

Easing the difficulties faced by the sector

No one can give a definite answer to the question of when the economy of Hong Kong will recover. Even if the Government has introduced a package of measures aiming at rescuing the economy, it is unable to meet immediate needs.

The urgent task at hand is to provide relief to the sector. For the transport sector, I suggest that the Government should give concessions and relief to the fees for various licences and vehicle permits. The Government should issue driving instructor's permits with longer validity periods and lower fees, and it should reduce the number of unnecessary inspections for vessels and container trailers. Although the amount of fees reduced under each item may not be that substantial, it can provide some kind of relief to the difficulties which the sector is presently facing.

The greatest costs of the transport sector are in diesel oil. I am pleased to see the Government reduce the duty on diesel oil in June this year in a bid to provide some relief for the sector. But this tax concession is only valid up to the end of March next year. Hong Kong is still in an economic downturn and the sector is still in deep water. I hope that the Government can extend its tax concession measure and do not push the sector which has just breathed a sigh of relief to the extreme. I also hope that the Government can further reduce the duty on fuels, so that their prices can be made closer to those of the Mainland and nearby places. This will also reduce the illegal use of unmarked oil.

Provide sufficient incentives to encourage taxis to use liquefied petroleum gas (LPG)

The Government has just released a consultation paper suggesting the use of LPG in taxis. As I shall have many chances of discussing this consultation paper in future, I shall give a detailed opinion on that later. But at the present stage, I wish to point out that if LPG taxis are to be introduced successfully, then the sector's worries on rising costs must be dispelled, and sufficient economic incentives must be provided to induce taxis to use LPG. In this regard, the price of LPG is crucial. The Government should give serious regard to the plunge in global fuel prices and deal with the unfair situation in which local fuel suppliers are reluctant to revise the fuel prices downwards. The Government should find ways of making fuel prices adjust to reasonable levels by their own so that such price levels can truly reflect the costs.

Madam President, "From Adversity to Opportunity" should not just stay as a slogan, it has to be accompanied by determination and vigour on the part of the Government which should take a leading role and adopt proactive and progressive policies to steer the local shipping and transport sectors clear of troubled waters.

With these remarks, Madam President, I support the motion.

PRESIDENT (in Cantonese): Mr SIN Chung-kai.

MR SIN CHUNG-KAI (in Cantonese): Madam President, I shall comment on the information technology policy as found in the policy address.

The contents of the policy on promoting information technology found in the policy address can be said to be very vague and lacking in novelty. It makes one worry whether the Government has any long-term and comprehensive development strategy in this respect.

Now that Hong Kong is in a period of economic recession, in order to raise the territory's competitiveness in the age of information technology, it is really necessary to make Hong Kong become a city of information technology or an Internet city and to strive for the development of high value-added industries and information technology. The Chief Executive made "Connecting to the Information Age" a very important policy programme of the Government in his policy address last year. This had made the information technology sector feel very encouraging. But unfortunately, progress is still very slow after one year. In this year's policy address, it is proposed that Hong Kong should be made a centre for multimedia-based information and entertainment services in Asia, an Internet hub and information centre in the Asia-Pacific region, and a leading city in the world for the development and application of information technology, especially in electronic commerce and software engineering. But no new concrete measures are suggested in the policy address, and not sufficient resources are put into these areas. Recently, many people in the sector have talked to me about the areas in the policy address with which they feel disappointed.

After the release of the policy address last year, the Government has in fact done a number of things, including the establishment of the Information Technology and Broadcasting Bureau to promote the development of information technology. But all these are far from being sufficient to turn Hong Kong into an information city. For this year's policy address, people expected there would be plans to develop information technology, so as to revive the local economy. Sad to say, the Chief Executive has not proposed any innovative plans and concrete measures.

The Government's strategic plan for information policy development does not state any long-term objectives and development strategies. There is a re-packaged scheme called "Digital 21" spearheaded by the Information Technology and Broadcasting Bureau and with the limited participation of some other Policy Bureaux. This strategic plan in information technology has set up certain milestones and indicators. Although they are practical, they are limited in scale and are too narrow in scope, and they are unable to turn Hong Kong into an information city. This "Digital 21" plan is at best a plan under the Information Technology and Broadcasting Bureau; it cannot be regarded as a comprehensive plan made by the Hong Kong Government to promote information technology.

The directions of "Digital 21" and the "Digital Hong Kong 2005" which I proposed earlier are quite similar. The only difference lies in the depth and width of scope involved. The Digital Hong Kong 2005 has in fact made references to certain specific contents of the information technology strategic plans of quite a number of countries. I wish to call on the Government to make more efforts to compare the developments of Hong Kong and advanced countries in this respect.

Secondly, the policy address also proposes a series of suggestions such as the plan to set up an Innovation and Technology Fund with an injection of $5 billion, a $100 million Film Development Fund, and a $173 million on-line Government Electronic Services Delivery Scheme. We are viewing these proposals with cautious optimism because although the Government has made these proposals, there are no specific measures and plans on these to date.

The Commission on Innovation and Technology chaired by Prof TIEN Chang-lin will only complete its first report by July next year. I wish to state my view on this here, and that is, in the entire Commission, there is no one with a background from the information technology sector. As information technology will no doubt play an important role in the development of innovation and technology, I hope the Government can urge this Commission to make more contacts with people from the information technology sector in order to gauge their opinions in this respect.

Thirdly, many of the proposals on information technology found in the policy address are only old wine in new bottles. They lack innovation and are not much different from those proposals made in the past. For example, the Science Park was proposed as early as in 1995, the second Industrial Technology Centre and the fourth industrial estate were all mentioned in last year's policy address. And they are all brought up in this year's policy address again. There are in fact no other new plans proposed by the Government. Last year the Government proposed a five-year plan on information technology education and just now Mr CHEUNG Man-kwong has made some criticisms on that. The information technology policy which the Government has introduced this year in fact does not have much difference from the scheme which the Government said 10 years ago that it would implement. So the plans found in the policy are really old wine in new bottles. Recently, I read through some of the newspaper cuttings of 10 years ago about how Hong Kong planned to develop high technology and information technology. I find that the contents of the newspaper cuttings 10 years ago on the development of high technology and information technology are not much different from the present proposals.

On the developments in this aspect, we would like to compare the rates of development in Hong Kong with those from other nearby regions or countries. We cannot, of course, make comparisons with all other countries. However, places like Singapore and Taiwan do have a lot of things for us to learn.

In 1992, Singapore launched the IT 2000 plan and was committed to promoting the development of information technology and making the city state an Internet hub. As early as the 1980s, Singapore had begun to formulate plans for an automated government. The plan was constantly under review during 1993 and 1994. We can see the effects of this plan: Singaporeans can make use of the services provided on the Internet such as making tax returns, paying tax, applying for various kinds of licences and even applying for a civil service job. The Singaporean Government passed the Electronic Transaction Bill this June and this facilitates on-line transactions.

Taiwan's developments in this aspect are no less impressive than those of Singapore. It has made use of the government departments, schools and large-scale companies to develop information technology. The on-line government in Taiwan is launching all kinds of public services and working to develop public infrastructure and to plan for a Certificate Authority. Should Hong Kong wish to be number one in Asia in information technology, it is no small task.

On the one hand Hong Kong said it would strive to become an Internet communication centre, but at the same time it is placing itself in a very embarrassing situation. For when the communication markets in the world are moving towards the direction of liberalization, the Government in this year's report of the review of the sector refuses to further liberalize the market. If we are to become an international communication centre, there must be a completely liberalized market and a set of sound legislation on competition, so that people from different sectors can compete freely and fairly. Only under a competitive environment can the innovation of technology be achieved. I hope the Government can learn from this and when it makes a decision at the end of this year, it can tell the world that it would continue to open up the market.

There must be co-ordination among different government departments if Hong Kong is to develop information technology. Government departments should also work closely with the private sector on this. Take one example, Hong Kong has the reputation of being an international financial centre. In the coming decade, we must plan to make use of information technology to make Hong Kong a digital financial centre or an Internet financial centre. Another example, since the Home Affairs Department and the Home Affairs Bureau have very close ties with the public, they should promote public awareness of information technology and to guide the public on how to adjust to life in a hi-tech and modern society so that they can enjoy all kinds of technologies to raise their quality of life. Information technology is a cross section which cuts across each and every policy area. The Information Technology and Broadcasting Bureau should co-ordinate and promote plans for the development of information technology. We urge the Government to raise the awareness of each Policy Bureau in this aspect and to put in substantial contents for its development.

To develop strategic plans on information technology, we must pay attention to two important factors: (1) manpower resources; (2) business environment. In the area of manpower resources, the Government should be responsible for the training of information technology personnel of different levels through the tertiary institutions and the forthcoming Institute of Vocational Education and even the Employees Retraining Board. For even under the financial turmoil and with the high rate of unemployment, there is still a shortage of information technology personnel in Hong Kong, especially the professionals.

Secondly, about the business environment. We welcome the idea of the Government proposing a timetable for contracting out its many plans on information technology to private firms. I wish to point out that when contracting out these plans, the Government should formulate appropriate measures so that local companies can compete in a level playing field. In this way, manpower resources can be better utilized.

On the other hand, I hope that the Government can study into the issue of the choice of Asia-Pacific regional headquarters for the information technology and hi-tech companies. In the past, these companies would choose Hong Kong as their regional headquarters. But the recent trend is that they would choose two places: if they are after the colossal China market, they would either choose Beijing or Shanghai; if they are after the Asia-Pacific region, then they would pick Singapore as the convenient choice. More and more of these companies do not want to choose Hong Kong to set up their research and development departments. In this regard, the Government must think of certain ways to attract these companies to continue to expand their business in Hong Kong. There must be sufficient manpower if information technology is to be developed. It is a chicken-and-egg situation. If there are such companies around, then local young people can join this sector and train themselves. When they have some knowledge of this field, then they can work out their own plans.

My recent experience in Silicon Valley is that many of those people who set up their business there are people who had worked in some big firms for some years and later made some ambitious proposals and looked for the support from certain innovation funds called "venture capital". The reason for their success is that the entire investment climate there can easily attract more people to go there and start their own business. There are some 60 000 people of Asian descent in Silicon Valley. Of these people, the Chinese in particular, are information technology professionals or engineers. They are attracted by one factor to come to work there, and that is, they can develop their career in information technology. If Hong Kong is to develop this industry, it must improve on the business environment.

In starting to develop strategic plans for information technology, Hong Kong lags far behind many other countries, including neighbours like Singapore and Taiwan. If Hong Kong is to become an information city of the 21st century, we must think carefully and formulate a long-term and more specific blueprint for the development of information technology policy in Hong Kong. We must include different government departments, and organizations from both public and private sectors. Though we start rather late, we need to make our pace faster or we shall make no progress and stay where we are. And in three to five years' time, we shall only watch other countries overtake Hong Kong, make greater progress and become more advanced. By then we shall fall a lot behind them.

With these remarks, Madam President, I support the amendments.

PRESIDENT (in Cantonese): Miss CHOY So-yuk.

MISS CHOY SO-YUK (in Cantonese): Madam President, when the Chief Executive was reading out his second policy address, probably like most people and Honourable colleagues in the Legislative Council, I had an expectation of the policy address. I expected that this year's policy address would soon lead Hong Kong out of the worst recession in 40 years. After hearing the policy address, I probably felt the same way as most people and colleagues here did, that it offered no effective prescriptions that could boost people's spirits immediately and that it carried many visionary goals which, though suitable for Hong Kong, had few measures that were specific and potent enough. My expectations of the policy address have somehow turned into disappointment.

However, having thought it over, I have come to realize that what the policy address can promise to do is very limited. One reason is that the various measures for stimulating the economy, improving the financial system, alleviating the unemployment had, due to the urgent need, already been introduced before the release of the policy address. Another major reason is that Hong Kong is now in the middle of an extremely complex and unfamiliar situation where the effects of the extremely volatile international financial situation, the bursting of our bubble economy and the rapid restructuring of our own economy are all interacting with and affecting one another. At the same time, owing to the diverse uncertain factors, international investors and the various social strata and industries in Hong Kong have been making all sorts of requests to the Government of the Hong Kong Special Administrative Region (SAR). Under such a complex, volatile situation where the future is uncertain and many factors are beyond the control of the SAR Government, would it not be somewhat risky to have the policy address clearly written, positive and aggressive?

There is no doubt that during a recession, the Government can indeed commit more in respect of the economy and society to ride over the hard times with the people together. This is also what people expect from the Government in general. But no one wishes to see the Government continue to expand and extend its intervening arms, sacrifice society's long-term interests for the temporary alleviation of the hardships that will only be here for just a while. It is easy for the Government to step up its commitments but it will not be easy to cut down the people's dependence on it or for it to reduce the intervention afterwards. Everyone has to be alert to the fact that to revive the economy of Hong Kong, it is absolutely inadequate to follow the lead of the Chief Executive's policy address and the Government's actions. It is more important for us to stay calm in the face of adversities, be flexible and act according to circumstances, and constantly strive to become stronger than to depend on the Government in all things. In fact, Hong Kong has experienced many recessions and many financial crises and managed to bounce back every time. The main driving force comes from the people rather than the Government.

Madam President, I would like to talk about my views on several aspects.

First of all, the Civil Service. The 190 000-strong Civil Service has always been a major item of public expenditure and its size even keeps expanding. Taking a general look at the past year, we can see that the Government has blundered in handling various crises. The problem does not seem to lie with the manpower shortage in the Civil Service but with the duplication of duties of government departments which end up blaming one another for shirking the responsibility. I think that to enhance the overall efficiency of the Civil Service, the Government must thoroughly review the problem of mismatch of manpower resources in the sense that some departments are overstaffed while others are constantly understaffed. Earlier, the Hong Kong Progressive Alliance has proposed to the Chief Executive about "zero growth in the number of civil servants" and it is not at all impractical. We hope that the directors of various government departments should, instead of recruiting more staff lightly in the name of fulfilling their performance pledges, save the resources as far as possible and plough them back for reviving the economy. At the same time, the Government can make use of this opportunity to review the present bureaucratic system in order to expedite the Government Electronic Services Delivery Scheme so as to keep up with the rest of the world. I firmly believe that if the Government has the determination, there is little to keep it from achieving that.

Madam President, instead of urging the Government to come up with a grand economic plan which it may like to but has not the ability to carry out, we had better urge the Government to focus on something closely related to the people's daily life such as electronic transactions, something that no one can afford to overlook.

To carry out electronic transactions via the Internet has become a new trend doing business. In particular, in such a tiny spot like Hong Kong, there is limited room for developing the internal market but with the Internet providing a market that covers the whole world, Hong Kong businessmen can be facilitated in building up a vast client network more efficiently.

The Secretary for Trade and Industry indicated a couple of months ago that electronic transactions can become very popular in Hong Kong in two to three years. The policy address also indicates that the Government will promote electronic commerce and public services through its investment in the hardware and software. These are all praiseworthy policies.

However, at the same time when it develops electronic transactions, the Government must expedite its development of security protection for electronic commerce. Although electronic trading is not restricted by space, this trading mode which does not involve currencies does, however, involve banks and financial organizations of various countries. As the international community has yet to come up with the common legislation for the regulation of trading via the Internet, very often mistakes are made during the settlement and there are even commercial frauds. Before the introduction of a relevant legal regulatory framework, the Government must join hands with the sector to set down guidelines and code of practice in regard to issues such as security on the Internet, privacy of the clients as well as the protection of intellectual property.

Another subject relating closely to the people's life is the Chief Executive's decision to scrap the two Municipal Councils, bringing an end to the decades old arrangement whereby the Regional Council and Urban Council are the main promoter of cultural and art activities.

I think that to effectively promote the culture and arts, it does not imply that after scrapping the two Municipal Councils, the Government can step up its direct intervention in the related business. In the past, the two Councils have taken charge of over 80% of the public spending on culture, controlled almost all public cultural facilities and venues and run most of the major cultural and art activities. Such practice is next to monopoly and is unsuitable for the promotion of the diversified cultural and art activities. In the end, much work has been done but little good achieved. The result is the framework providing such services has become bureaucratic and overstaffed, and the activities organized deviate from the public tastes and the utilization rate of the public facilities is low. It will be of little help to solving the problem even the Government is to take over the work, I am afraid. Actually, in terms of the resources used in promoting cultural and art activities, Hong Kong comes just next to Germany in the world, but many people still eye Hong Kong as a cultural desert. It must have something to do with the Government's faulty policies on culture.

The new agency to be in charge of cultural and art activities as initiated by the Government should maintain the merits of the two Municipal Councils in terms of high transparency and relatively few conflicts of interests on the one hand and avoid the Councils' shortcomings of insufficient respect for cultural freedom and at the same time controlling most of the resources for the development of culture and arts on the other. It should not become an independent kingdom like the Hospital Authority, which in the name of professionalism, would often evade public monitoring of its utilization of resources. Specifically, the new agency should be independent of the Government and enjoys autonomy in terms of policy-making, granting of funds and administration.

Madam President, the time of Hong Kong is no longer borrowed. Moreover, we are now witnessing a great era in which the old century is about to end and the new to begin, and society is undergoing rapid changes. Such a new environment with so many things happening at the same time offers Hong Kong a precious opportunity to develop its unique culture and arts. I hope that the Government will grasp this precious juncture to facilitate the flourishing of culture and arts in Hong Kong.

With these remarks, Madam President, I support the original motion and thank the Chief Executive for his second policy address.

PRESIDENT (in Cantonese): Miss Margaret NG.

MISS MARGARET NG: Madam President, this Council should not be grudging in thanking the Chief Executive for his policy address. Although wanting in many ways, the address was given in an effort to fulfil a duty under the Basic Law, so that a familiar Hong Kong tradition can survive.

The transition is far from over. Indeed, the real transition may be just beginning. Premature congratulations are out of place. But we can all feel thankful that, at least so far in the still unfolding history, we are still able to stay here together. I am deeply thankful that the democratic voice has returned to this Council. Though under greater constraints, it is as determined as ever to fight for the rights and freedoms of this community. May this Council never again be deprived of that voice.

There is no question that Hong Kong is going through hard times. The legal profession has not been exempted. Last June, I warned the Government that the sudden abolition of scale fees when coupled with an economic downturn could have serious consequence on practitioners. That is happening now. Many small to medium size firms have been cutting down on staff and staff salary in a bid for survival. When consumers are only interested in pursuing the lowest quotation, morale and professional pride suffer. At the Bar, while a few stars command as high fees as ever and are kept busy, by far the majority, especially at the junior end, has to put up a brave face and contain the anxieties. They are at one with the community in wishing for light at the end of the tunnel. They are working hard to find new directions, to build up the new strengths which will make them more competitive for a better tomorrow.

Madam President, in his last policy address last July, Mr TUNG painted a glowing future with ambitious plans. Those were, in retrospect, in fact the last days of our fat years, the bubble at its highest. Now we face the severity of lean years ahead. I am disappointed that Mr TUNG has not displayed the strength of character and leadership to acknowledge that previous plans must now be revised. True compassion does not lie in a turn of phrase or small gestures of benevolence. It requires a government to do all those things which are necessary to put a community back on its feet, even if this means pain in the short term. Prices have to come down. The cost of services must be allowed to find its own level. Productivity is more than ever the key issue. The Civil Service itself must re-examine pay and establishment with far greater austerity.

"Alleviating hardship" is not a licence for spending money with no justification in terms of effectiveness. It is not the Government's business to prop up the market, or intervene in the private sector's hard commercial decision to adjust to market conditions. Provider and consumer should be left to set the right price level. Employer and employee will work out their basis for negotiation. It is not the Government's business to manipulate or to take sides, but to regulate and maintain the framework of fair play by introducing sound laws and institutions, and, most fundamentally, to uphold the rule of law.

Regrettably, apart from lip service, this Government has shown scant respect for the rule of law. The ill-founded interference with the Rules of Procedure of this Council as well as the disregard for constitutional considerations, due process and a proper legal framework in the headlong rush to abolish the Municipal Councils are only two of the most notorious recent examples. A third example, and one which troubles me even more deeply, is the Government's attitude in refusing to disclose its huge share holding in listed companies following the intervention in August. Officials have told this Council that the Government is not bound by the Securities (Disclosure of Interest) Ordinance. Immunity is claimed under section 66 of the Interpretation and General Clauses Ordinance as amended by the Adaptation of Laws Ordinance in April. The law requires disclosure because it is vital to the public interest to preserve a level playing field. The position that the Government does not have to disclose because in its view it is against the public interest to do so is unacceptable. One official even said that the Government's disclosure would harm the level playing field, though everyone else is required to do so. The impression given is that the Government decides when it should submit to the law and when, in the name of public interest, it stands above the law. We are told that anyway a great many Members of this Council support the Government's intervention and non-disclosure. This is precisely the danger. Madam President, this Council's support must not be used to encourage the Government to disregard the constraints of the law.

Mr TUNG has devoted only one short paragraph to the legal system and the rule of law, and the only concrete policy directives mentioned are strengthening the Prosecution Division to improve the Government's ability to conduct criminal cases in the Court of Final Appeal, and to further bilateral agreements on mutual legal assistance in criminal matters.

This is far from enough. The rule of law requires us to safeguard the independence of the Judiciary and of the legal profession, independence in the decision to prosecute or not to prosecute, the greatest extent of independence possible in legal aid services, and the attention to maintain the highest quality so as to back up this independence.

We need to improve legal education and professional qualification. We need to build up a strong local legal profession with highly competitive skill and exposure. The Government should support the profession's efforts. Protectionism is not an option, but the public sector should promote a more long-term view and take the trouble to cultivate a wider net of able local practitioners by using their services where appropriate. This is the only real way to bring down costs without compromising quality. Over time, it will add first rate, reasonably priced legal services to Hong Kong's strong points as a business centre.

At the same time, the Government should make the courts more accessible to the Hong Kong public. An increase in the jurisdiction of the Small Claims Tribunal and of the District Court is long overdue. The present ceilings of $15,000 and $120,000 respectively are out of date. People are forced either to go to the High Court, where costs are much higher, or abandon their claims. Yet, no amendment bill is in sight in the legislative programme.

It is axiomatic that legal aid services should be as independent as possible, institutionally and operationally, in fact and in perception. The last Legislative Council had supported this. After an in-depth consultancy, the Legal Aid Services Council has come out with a clear recommendation to the Chief Executive for an independent Legal Aid Authority. The proposals are sensible and balanced. The principles are sound, the target is set at delivering better legal aid services, the result will strengthen confidence in the rule of law. Yet, the matter failed to get even a mention in the policy address. I urge the Government to give it priority and the attention that it so manifestly deserves.

Also directly affecting the public is the new regime of land titles registration which will drastically simplify the sale and purchase of properties and lower the cost. Yet, the relevant bill is also absent from the legislative programme. The current draft of the bill still contains defects which will pose unacceptable risks for the consumer. The profession's strong representations to the Government remain unsuccessful. Delay is of no advantage to anyone. I urge the Government to publish a white bill as soon as possible in order to consult the wider public on this matter which is of vital importance to them.

Madam President, the wrongful enactment of the Adaptation of Laws Ordinance caused deep concern to the legal profession, the public and many Members of this Council. We are not satisfied that in making the "State" not bound by Hong Kong laws, the Government's approach is consistent with Article 22 of the Basic Law. Whatever was the past justification, now is the time to raise this fundamental question, and test every adaptation of laws bill against that principle. I am personally determined to go through this exercise with the utmost vigor.

The nature and quality of the Department of Justice is vital to the rule of law. If it is led and staffed by people with a true depth of legal learning, of unswerving principle and professional independence, and if there is a strong amount of experience in private and commercial practice, we may be more assured that the legal policies and advice issuing from it are right for Hong Kong and for the rule of law, and have the respect of the legal profession. Mutual respect and good communication between the Department of Justice and the legal profession in private practice is essential for a healthy legal system.

The rule of law does not stand alone. It has its foundation in a set of values. Of these, the respect for independence is one of the most important. It is the virtue one guards most jealously: in the concept of the independence of the Judiciary ─ not only independence of the Judiciary as a whole from the executive, but also the independence of each individual judge from the influence of even other judges; in the requirement for independent legal advice; in an independent press; and in the independence of regulatory institutions such as the Securities and Futures Commission. Even in this Council, where party politics is becoming a dominant feature, the independent voice must not be stifled.

Independence inevitably also means more critical than compliant views, more devolution than concentration of power, and to some, this may mean weaker solidarity, and less control by the executive. In my observation, the Hong Kong Special Administrative Region Government has brought about a change in the political culture and values. None has suffered greater devaluation than independence. This not only inevitably weakens the rule of law, but it also encourages unopposed power. Power tends to corrupt, Madam President, as Lord ACTON once said, and all too often, it proves true that absolute power corrupts absolutely.

Thank you.

PRESIDENT (in Cantonese): Mr LAU Kong-wah.

MR LAU KONG-WAH (in Cantonese): Madam President, I support the motion moved by Dr LEONG Che-hung.

I wish to respond to the speeches made by Mr LEE Cheuk-yan and Mr Martin LEE earlier. Mr LEE Cheuk-yan said some time ago that he would like to make some very fundamental changes. At that time I did not understand too well what he was saying. Today in his speech he stated clearly that he would like to advocate an economic revolution. He outlined the details of such a revolution very clearly just now. That is, he opposed the motion moved by Dr LEONG Che-hung and opposed one of the foundations of the Chief Executive's policy address. The "economic revolution" that he had in mind was (1) a very substantial increase in benefits; (2) promotion of collective bargaining; (3) setting up of a minimum wage. What kind of revolution is that when the focus is put only on making a substantial increase in benefits instead of making long-term social investments, on collective bargaining while neglecting consultation between employers and employees; on minimum wage and ignoring competition in the market. Is he talking about socialism after all? For at least it is a revolution which goes against free market economy.

On the other hand, Mr Martin LEE said we should make progress in economic development as well as in democracy. That is true. I cannot agree, however, to the idea of putting the blame on the lack of democracy for all the problems brought about by the Asian financial turmoil and the local economic downturn. In fact, at the onset of the Asian financial turmoil, the international media had put all the blame on the political system of the Asian countries, but then when the storm hits the United States now, the international media have silently abandoned this viewpoint. Let us look at the Japanese experience. Japan has a democratic political system. Why is that country in such a bad situation for so many years? Why is Japan unable to make an economic take-off in the past eight years? Let us see the situation of Britain in 1992. Britain is one of the other veteran democratic countries, but why did it come under such attacks and why did recession appear? Therefore, I cannot agree to the idea that any setback in democracy will lead to an economic recession. We can see very clearly that in this financial turmoil, some rules of the game are not laid down by Asian countries or Hong Kong, but by some superpowers. Would you call that fair? The answer is clear.

In fact, when this financial turmoil swept over the United States, the United States had to adopt some measures to get out of this predicament. Thus it can be seen very clearly that international relations are governed by considerations of interest, and so economic problems should be analysed in economic terms. I do not think that economic problems should be politicized. So when these two Honourable colleagues tried to promote an economic revolution or to politicize economic problems, and to use these as the main thrust of their attack on the Chief Executive's policy address and to express their regret, I cannot help but oppose such a move.

I would like to speak on behalf of the Democratic Alliance for the Betterment of Hong Kong (DAB) on the part of transport in the policy address. In general terms, I hope that the land, sea and air transport can be smooth and free from any obstruction.

First of all, land transport. The objective of the Government is to complete its studies respectively on the Second Railway Development Strategy and the Third Comprehensive Transport Study in 1999. I believe that it "takes time" to conduct these studies, but it really "takes time" to undertake such studies three times. Do we need to spend such an enormous amount of time on these studies? The Transport Bureau should know very well that some of the rail projects are very urgent and are badly needed. Certain projects have been under discussion for a long time. Some projects are stuck in their initial stage of making feasibility studies, though there are reports that construction has started. Such examples include the East Kowloon Line and the fourth cross-harbour rail link. When will construction start? And when can these routes of land transport be really smooth and free from obstruction?

Another point, the Ma On Shan rail link is in fact a dead-end. It leads to nowhere. The DAB has time and again asked the Government to extend the Ma On Shan rail link to the urban areas, but the Government remained firm and said there was no need at the present stage to do so. However, if the Ma On Shan rail link only reaches Tai Wai railway station, it will bring no solution to the traffic problems of people living in Ma On Shan and Sha Tin, because residents of these districts usually go by bus to the railway stations in University or Sha Tin and then take the East Rail. In such cases, if the Ma On Shan rail link only connects with the Tai Wai railway station, it is not cost-effective at all. The DAB therefore wishes to put forward its demand to the Government once again, that trains from the Ma On Shan rail link should go directly from the Tai Wai station to the tracks of the East Rail, for this will enable passengers to commute to and from the urban areas.

As for the Government's plan to build a railway extension from Sheung Shui to Lok Ma Chau, the Secretary for Transport undertook in the Panel on Transport that he would discuss the matter with the Secretary for Security to make use of the opportunity of the building of a cross-boundary railway station in Lok Ma Chau to make designs for a border check-point to facilitate movements to and from the Mainland. I anticipate a prompt reply from the Security Bureau and the Transport Bureau so that the public can know the progress in this matter. Public expectations for this are very simple. The public would like to have a choice of taking different means of transport such as trains, buses or taxis to go to that immigration check-point. As we all know, the Lo Wu station is packed with people on holidays. The Kowloon-Canton Railway should not dominate land departure routes. And I do not wish to see the same crowded scene appear in the new Lok Ma Chau railway station. As the Government only makes a study on this through the Kowloon-Canton Railway, I am afraid they may not be able to come up with a comprehensive plan. The Government is obliged to do this.

As for marine transport, I believe the people of Hong Kong are still longing for the days of smooth and plain sailing.

With the expiry of the franchise of the Yau Ma Tei Ferry on 31 March 1999, the Government has invited tender for six ferry routes for outlying islands. The DAB thinks that the following basic criteria should be used when considering the suitability or otherwise of the new operators: whether they have the right amount of experience in management; whether they have a sound plan for development; and whether they have the ability to react to contingencies and so on. On top of these, I think the most important thing is to consider the types of vessels the operators are using to see if they can meet the requirements of passengers for individual ferry routes. For example, ferry service between Tuen Mun and Central should be equipped with some high speed vessels especially during the morning rush hours; there should be some bigger ferries to serve the route from Central to Cheung Chau. All of the above are some of the opinions collected recently by the DAB. As far as I know, the Government is processing the tenders submitted. I hope they will consider the above-mentioned factors affecting service quality.

Another factor which affects marine transport is the problem of reclamation. On the reclamation scheme in Central and Wan Chai announced by the Government at the end of May, the DAB thinks that the scale of these two reclamation projects are too enormous and will bring tremendous damage to the Victoria Harbour. These projects will also pose potential risks to marine traffic. Therefore, the DAB has raised some counter-proposals.

The objective of the reclamation works in Central and Wan Chai should be traffic improvement. We therefore suggest that the land reclaimed should be used to build an underground road link which connects Route 7 with the Island Eastern Corridor to ease the traffic congestion in the trunk road on the northern shore of the Hong Kong Island.

For the South East Kowloon Development, the DAB hopes that the Government can narrow down the scope of the projects. As reclamation is not the only way to increase the supply of land, the Government should consider making provisions of land in places of strategic growth such as New Territories North and the Northwest District where land is already available and there is no need for reclamation. The land so provided will then be used to meet housing needs.

Madam President, after talking about the issues related to land and sea transport, I would like to turn to air transport. To fly in the sky high above is of course our expectation, but the host of problems which followed the opening of the new airport plus the recent spate of safety problems have made us feel very worried.

First of all, for the period of more than three months since the opening of the new airport, there had already been seven cases where aeroplanes were forced to make emergency flights. Last week, an aeroplane even smashed some of the ground safety lamps when making a touchdown. This incident has caused our great concern. I feel that the incidents must have something to do with the ability of the airport management and the airport to respond to emergencies. I hope that the Government can give an explanation to the public on these incidents as soon as possible. Safety is something that can never be compromised in an airport.

As for the Airport Authority (the AA), its major task initially was to oversee the airport project. It will be charged with a more important role in future, for it will be responsible for the operation of the entire airport. The DAB is very concerned about the method of appointment and the terms governing such appointment of the Chairman and Chief Executive of the AA. We also call on the Government to make the related mechanisms known as soon as possible. The AA is now at a stage of adjustment and the Board of Directors in future must be filled up by some people experienced in airport operations and finance matters. To ensure effective supervision of the operation of the airport, consideration can also be given to the appointment of people from the sector and elected Members of this Council to the Board of Directors.

Madam President, on the question of supervision, I wish to point out in passing that there has not been much progress in the mechanism on overseeing public transport services. The Government is still unwilling to expand the powers of the Transport Advisory Committee so that public transport services can have a broader base in public opinion. I think the Government will not forget the debate on whether this Council should be conferred with the power to vet fare increase proposals from the rails and the buses. At that time, the Government had put in a lot of efforts, and foreign experts were invited to look into the local mechanisms. The DAB compared different proposals and agreed that the Chief Executive in Council should make a detailed but policy neutral reply through a consultative committee, then a final decision is made of the vetting of the application to increase fares for public transport services. This kind of decision-making flow is definitely a mechanism which can balance the interests of the public as well as those of the investors.

The current decision-making flow should be improved, especially the Transport Advisory Committee which represents the public. If the Committee can be more independent and possesses more professional vetting powers, if it can conduct opinion surveys to gauge public opinion, and if it can gather and compile its findings on the studies on public transport, then the disputes which may arise out of applications for increase in fares of public transport services will be reduced. I therefore ask the Secretary for Transport to carry out public consultation on the working mechanisms of the Committee, and to ask for more funding for the Committee so that it can carry out substantial research work.

Madam President, after looking into problems related to sea, land and air transport, I wish to highlight the issue of transport expenses. The current year has seen a downturn in the local economy and a downward revision of the wages of the public and a similar lowering of public transport costs. The affordability of the public has dwindled, and transport expenses have become relatively expensive. Earlier on, the DAB made a number of proposals before the policy address was publicized. These proposals asked the Government to relieve the burden the public has to bear regarding public transport expenses. Now that the policy address has been published, but there are no effective initiatives to ease the people's burden. And recently, the Secretary for Transport indicated that he was reluctant even to make an appeal to the public transport organizations to reduce fares.

On the public demand to lower railway fares, the Secretary for Transport has made some very surprising remarks. He said the railway services were not a monopoly, the public could have other options as well. But I wish to confront him with this example: If someone has to travel from New Territories Northeast to Hong Kong Island to work, despite the so-called availability of options, he still has to ride the Kowloon-Canton Railway or the Mass Transit Railway (MTR) because he simply has got no other choice. The Secretary himself should take a ride in the MTR during the rush hours and experience its packed compartments, then perhaps he may know whether the public has any choice at all.

The DAB therefore hopes that the Secretary for Transport will reconsider very carefully to see whether he would join our ranks to talk to the public transport operators and discuss with them the workable options to reduce fares. These companies may have to give up a little bit of their profits and may have to launch measures like multi-trip concessions and monthly tickets, but these can surely ease the burden of the public in public transport expenses.

Madam President, I so submit.

PRESIDENT (in Cantonese): Mr Kenneth TING.

MR KENNETH TING (in Cantonese): Madam President, the Federation of Hong Kong Industries (FHKI) welcomes and supports the industrial policies contained in the policy address. Last year, Mr TUNG Chee-hwa made it clear in his first policy address that he would redevelop Hong Kong's industries towards the goal of high added value and high technology. This year, the policy address further continued his effort in this area by listing a number of concrete proposals such as the establishment of the Innovation and Technology Fund with an injection of $5 billion, the establishment of the Applied Science and Technology Research Institute, supporting mid-stream research development and introducing a series of measures to strengthen the links between the industrial and the academic sectors. In addition, the Government will endeavour to strengthen co-operation between technological talents and resources between Hong Kong and the Mainland. All these will lay a firm foundation for our industrial development in the future.

Undeniably, it takes time to develop high value-added and hi-tech industries. We may not be able to see any obvious result in a couple of years. But this direction of development ensures that Hong Kong will be on its way to success in the future. Nevertheless, the implementation of proactive industrial policies necessitates the co-ordination of other favourable factors such as a stable external financial environment and a stable yet low interest rate environment in Hong Kong. The industries of Hong Kong will then be able to develop rapidly.

Madam President, Hong Kong is an open economy susceptible to external influence. The Government of the Hong Kong Special Administrative Region (SAR) is thus unable to control the pace of economic recovery. However, the FHKI is of the view that the SAR Government can at least play an active role in adopting a more positive attitude and measures in two areas for the purpose of speeding up our economic recovery.

First of all, I should like to talk about the trend of interest rates. The level of interest rates has a direct bearing on the development of industries. Madam President, high interest rates have dealt a serious blow to Hong Kong's industrial development in the past year. Interest rates in Hong Kong was pushed up to double digits because of the financial turmoil. Manufacturers were unable to secure adequate working capital and capital for developing their business due to the credit crunch. Even if they were lucky enough to secure loans from the banks, their operating costs had been drastically increased because of repeated rises in interest rates. The external environment has stabilized only when the Japanese yen rebounded recently. The Hong Kong Monetary Authority has also gradually lowered the discount rate after the interest rates in the United States were lowered twice. Under such circumstances, the industrial sector considers that interest rates in Hong Kong should at least go down in the same magnitude as those in the United States. It is a pity that although the Hong Kong Association of Banks has a lot of room to reduce the interest rates, it has only reduced the interest rates by 25 basis points. The industrial sector is very disappointed at this belated and negligible reduction. Madam President, the FHKI is of the view that at the present stage, reducing the interest rates is the simplest, most direct, quickest and most effective way to stimulate the economy, without having the need to use public funds. We urge the SAR Government to persuade the Hong Kong Association of Banks to reduce interest rates again so as to alleviate the burden of all trades and industries.

On the other hand, with regard to the $2.5 billion Special Finance Scheme for small and medium enterprises (SMEs), the SAR Government should also adopt a more positive attitude in improving the Scheme expeditiously. Madam President, the FHKI has conducted a survey among our members on the effectiveness of this scheme and has submitted the findings of the survey to the Trade and Industry Bureau and the Industry Department. Our report has included such proposals as increasing the share of loans shouldered by the Government and extending the term of the loans. I hope that the Administration can listen to the views of the FHKI seriously and provide immediate support to the SMEs which are in difficulties.

During the past year when the industrial sector was operating in difficulty, the manufacturers were forced to try their best to cut costs and open new sources of income. Of course, for the purpose of opening new sources of income, they have to rely on their own efforts by developing new products and sourcing new clientele. But for the purpose of reducing costs, the SAR Government can, to a certain extent, provide assistance to the industry. In briefing us his work objectives for the coming year, the Secretary for Economic Services pointed out that the Administration would ensure that there would be adequate air cargo and shipping facilities to cope with the future growth in freight forwarding. In this respect, the FHKI absolutely supports what the Secretary said. But the industrial sector is of the view that the Secretary should also pay attention to a very important target and that is, apart from ensuring adequate facilities for air cargo and shipping, the Administration should more importantly ensure that the fees and charges are competitive vis-a-vis our neighbouring regions and also affordable to the industrial sector.

Madam President, I have time and again pointed out that the handling fees charged by our container terminals are the highest in the world. Recently, the Secretary for Economic Services has actively intervened in the negotiation between the shipping companies and shippers' organizations in order to help the commercial and industrial sector to fight for a more reasonable level of charges. Yet, the problem has been lingering on for years. I believe the Government may not be able to resolve it within a short period of time. As regards air cargo, costs incurred by the commercial and industrial sector have been on the rise since the opening of the new airport because of the increased charges levied by the air cargo handlers. The Administration must try to reduce the costs of freight in order to enhance the competitiveness of our industries.

On the whole, the industrial sector supports the second policy address of Mr TUNG. We also hope that Mr TUNG, after listening to the FHKI's views, will further improve the policies on promoting industries so as to enhance the effectiveness of the policies.

We support Dr LEONG's motion. Thank you, Madam President.

PRESIDENT (in Cantonese): Mr LEE Kai-ming.

MR LEE KAI-MING (in Cantonese): Madam President, the second policy address of Mr TUNG Chee-hwa is entitled "From Adversity to Opportunity". Clearly, he indicated to us that he wanted Hong Kong to overcome the adversity, to leave behind all difficulties and to stand on its feet again. He would like Hong Kong people to seek more common ground while reserving minor differences to achieve harmony in the community so that we can work together to do what is in the best interest of Hong Kong. This is the only way to go from adversity to opportunity, to tide over difficulties brought about by economic adjustments and to welcome tomorrow when there is economic revival.

The recent trends in the financial markets seem to give support to Mr TUNG's policy address. The United States reduced its interest rates twice in 15 days, giving the Hong Kong stock market a shot in the arm. The Hang Seng Index recovered a lot of grounds, showing basically market confidence is gradually coming back. International punters are licking their wounds. It is unlikely they will assault the Hong Kong dollar again in the near future. The property market is basically stable and is showing some upward trend. I hope this is a sign for an end to the economic adjustment. I hope relevant government officials of the Hong Kong Special Administrative Region (SAR) can stay calm, making more allowance for difficulties and be better prepared for them. I also hope Hong Kong can follow the example of the United States to further reduce the interest rate to stimulate the recovery of our economy.

Though multi-faceted, Mr TUNG's policy address falls short of easing pressure for the people. First, unemployment rate is increasing, and so are the number of layoffs, salary reductions, worsening labour relations and greater disparity between the rich and the poor. Second, our social welfare provision is lagging behind the times and we have housing problems for the grassroots. The policy address does not provide any solutions to these problems. It only pointed out: "This year, Hong Kong's economic growth will shrink by 4%. Our unemployment rate, which has already reached 5%, will continue to rise...... . This difficult economic situation will continue well into 1999." It also urges "employers and employees to build up mutual communication and understanding so as to help tide them over these difficult times." I agree that during this extraordinary period both employers and employees should not lose sight of the importance of an economic adjustment and a revival of our economy. They should keep their enterprises going. However, employees must not be made to bear the brunt of the crisis. The recent spate of layoffs and salary reductions have greatly undermined the confidence of our employees. If things of this sort continue, how can we promote labour relations and dialogue between employers and employees?

Madam President, in my comments on Mr TUNG's policy address last year, I said, "One area of concern is whether the increase of the working population can catch up with job vacancies created by economic growth." Now we have a population problem and an employment problem, both of which have reached serious proportions. According to information from the Census and Statistics Department, our population will grow to an estimated 6.6872 million by the middle of 1998, an increase of 2.8% from 1997. Most of the increase accounts for new immigrants and returnees. We understand that most of the new immigrants are not highly educated and so can only worked as non-skilled labour. They will therefore compete with local unskilled labour. They are a burden on housing, education, health care and social welfare in Hong Kong. In answering my question during a question and answer session in this Council this year, Mr TUNG admitted, to the effect that" indeed we have a population problem in Hong Kong. The population is increasing quickly. We will have to face a population problem one day." I think we have to face it now. I urge the SAR Government to face the population problem squarely as soon as it can. It should review its immigration policy to ensure that our population growth matches economic development. It should gradually enhance the quality of immigrants to tie in with our economic development. As we all know, high technology cannot create more job opportunities. In future, it is unlikely Hong Kong will see a drastic increase in the number of jobs. Therefore, the Government should review its entire labour importation policies, including the importation of experts, foreign domestic helpers and the supplementary labour scheme. It should conduct a comprehensive review and an extensive consultation exercise before formulating new policies.

The policy address announces an injection of $500 million to the Employees Retraining Board (ERB), thereby increasing the retraining quota by 6 000 to 80 000. At the same time, to enhance the credibility of courses organized by the ERB, the Government is designing an accreditation mechanism to facilitate trainees in seeking employment. According to data from the Government, 75% of the graduate trainees found jobs last year. This year, more than 70% of the trainees found jobs after graduation. The Government should solve the following problems as far as employees retraining is concerned. (1) Courses should cater to the needs of the market. The ERB should match the Government's infrastructure plans by providing more tailor-made courses. (2) The Government should lay down long-term training programmes. It should not focus just on the short-term goal of enhancing employment. Rather it should train people and make reserves in human resources for development in the future. It should make use of the opportunity offered by a high unemployment rate and people caught in prolonged periods to retrain the unemployed, for this is adult education and investment in human resources. When the economy revives, productivity may then be increased. Retraining can also help the unemployed ease their pressure for the time being. (3) The Government may provide more temporary jobs and strive to implement the recommendations of the ad hoc group on employment so that trainees may find jobs soon after retraining.

According to data from the World Bank (WB) about distribution of national income, Hong Kong has a severe disparity between the rich and the poor. 41.8% of the wealth in Hong Kong is in the hands of the top 10% of the high income group. People with the lowest 10% income can enjoy only 1.1% of the wealth. So, there is a difference of nearly 40 times. Among the 93 countries covered by the WB data, Hong Kong ranks 14 among the worst in terms of disparity between the rich and the poor. This should be a cause of concern for the SAR Government which should have a lot of work to do to minimize the disparity so that there is a more reasonable redistribution of wealth. Expenditure on social welfare has been on the rise and exerting an enormous financial pressure on the Government, making it necessary for the Government to review the Comprehensive Social Security Assistance (CSSA) Scheme. But I must point out that that more people are living on CSSA not only because some of the unemployed need it but also because the community has an aging problem, which is an important factor. We should not take rash action in cutting CSSA payments in order to avoid more social unrest.

As our population ages, Hong Kong has 968 000 people who are aged 60 or over by mid-1998, which is 29 700 more than the 1997 figure and amounts to 15% of the total population. The elderly spent their golden years making contribution to the prosperity of Hong Kong. Many of them have to rely on CSSA now because in the past the colonial government neglected people's livelihood and retirement protection for the workers. As at July 1998, there were 116 254 cases in which applications for CSSA were made by the elderly. The number amounts to 55.1% of the total of 211 008 cases. Thus I would urge the Government to act with care in dealing with the issue of welfare for the elderly. It should face the facts, iron out the problems left over by history and refrain from cutting welfare for the elderly. The Government should take steps to ensure the elderly can enjoy their twilight years in dignity and set an example in respecting and helping them.

Due to the great disparity in income, the grassroots have an enormous demand for public housing. In the policy address, the Government said it has "pledged to reduce the average waiting time for a public rental unit to three years by 2005, and we are on target to achieve this." Despite this, Mr TUNG seems to have avoided the long-term target of 70% home ownership mentioned in the last policy address, and the target for the production of 141 000 public rental units during the six-year planning period ending at March 2001. In my view, since the grassroots have an urgent demand for public housing and at this stage the Government has the means to produce housing units, it should provide more than 50 000 units per year. Would that not be a great help to those in need?

From the media reports, I understand that Hong Kong is competing with neighbouring regions for the building of Disneyland. If Hong Kong succeeds in winning the project, which is going to be a huge tourist attraction, the development of the local tourism industry will be greatly enhanced. Thousands of low-skill jobs will be created. The underemployment problem will be greatly eased. Although Hong Kong has an edge in terms of transport, communications and geographical position, we must not be complacent or blindly optimistic to miss the opportunity. Officials of the SAR should act with enthusiasm, provide preferential terms and try their best to win the project. The difficult times are a big test for officials of the SAR. The Government needs to have a sense of crisis and be flexible if it wants to grasp every opportunity instead of sitting back and waiting.

With these remarks, I support the original motion. Thank you, Madam President.

PRESIDENT (in Cantonese): Mr Andrew CHENG.

MR ANDREW CHENG (in Cantonese): Madam President, in my capacity as the spokesman on labour policy as well as recreation and cultural policy of the Democratic Party, I would like to discuss the relevant topics in the policy address.

Although the policy address is entitled "From Adversity to Opportunity", it gives people the impression of an average run-of-the-mill report which is well-intended but powerless, incapable of overcoming the present crises. Madam President, crises must be overcome with resolute measures, they must be dealt with by concrete methods. If the Government thinks that a crisis of unemployment does exist at present, it should devise substantive ways to solve the unemployment problem and defuse the crisis.

Unfortunately, although the policy address aims at turning adversity into opportunity, it does not have the substance to do so. The whole policy address comprises 171 paragraphs which discuss separately in detail the issues related to economic strategies, land planning, investment in human capital and a better quality of life, as well as, of course, the plan to "scrap" the two Municipal Councils. However, none of all these paragraphs clearly focuses on unemployment. The term "unemployed" has only appeared five times in paragraphs 107 to 109, and they only talk about how the Government will strengthen training programmes and call on the unemployed people not to become disheartened.

The unemployment problem has been aggravating seriously in recent months, and not a single day passes without any reports of pay cuts and layoffs. This is not only the unemployed's own personal problem, because his family, his friends and even the whole community are all living in an abyss of misery. However, the policy address only spends three other short run-of-the-mill paragraphs on the problem, repeatedly asking the people to rebuild their confidence. The Chief Executive never stops telling us that "with the strong will, flexibility and innovative spirit of Hong Kong people, Hong Kong will definitely be good and China will be good", and so on and so forth. But how can our confidence be built on a policy address which fails to offer concrete solutions and resolute measures?

After the policy address has been delivered, many public opinion surveys show that the public at large are disappointed in or dissatisfied with it. With regard to the employment problem which is the daily worry of almost 200 000 unemployed persons, the solutions found in the policy address are simply striking up an old tune without presenting any new ideas. The only more concrete undertaking is that $500 million will be allocated to the Employees Retraining Board. Each time when the Secretary for Education and Manpower, Mr Joseph WONG, releases the latest unemployment figure, he will stress that the Government has tried its best and will continue to exhaust all means to address the unemployment problem. The Chief Executive also says frequently that he is very concerned with the problem and is both confident and determined to solve it. However, if we look at the policy address as a whole, we would find that it is totally out of touch with the times because, other than appealing to the people to "leave themselves to the mercy of God" and wait for the recovery of the economy, it has not even touched on the financial pressure on the unemployed or the pay cut and layoff problems faced by those employed. The policy address has not only failed to serve as a booster to restoring confidence, but it has further shaken the community's confidence in the Administration's governance. Madam President, when the unemployed worry about their daily meals, all TUNG Chee-hwa does is to reiterate that they should not become disheartened. In the face of a Government which lacks a sense of crisis and commitment, how can its people not become disheartened and disillusioned? The so-called concern, confidence and determination of the Government are eventually unable to conceal the disappointment among the people!

If we go on like this, the unemployment crisis will become a crisis of confidence, and it will become a crisis of social unrest; in the end the Administration will have to face a crisis in governance.

Madam President, the day before yesterday, the Government announced the unemployment figures of the last quarter. Although the unemployment rate is still kept at 5%, the actual number of unemployed people has actually increased by 6 000 to almost 181 000. While the growth in unemployment rate has slowed down, we cannot rejoice so soon and think that the difficult times are already over because companies are going to balance their books in one or two months' time before the end of the year, I believe another wave of pay cuts and layoffs is forthcoming. When the Government stresses the solution to the unemployment hinges on the changes in the external economic environment, and when it stresses that there is no panacea for the unemployment problem, the number of unemployed people continues to rise. The anxiety of the community has been brewing for some time, yet the policy address still has not offered any assistance or protection to relieve the pressure on the unemployed. In the meantime, the Government's intimation that the Comprehensive Social Security Assistance (CSSA) may have to be slashed doubtlessly strikes yet another blow at the unemployed.

Madam President, in paragraph 137 of the policy address, the Government emphasized the necessity of financial prudence and it is in the course of reviewing the CSSA Scheme. The Director of the Social Welfare Department has hinted strongly many times that the CSSA might have to be slashed. The Government's attitude towards this issue reminds us what heroic airs it put on when it spent money like water and injected over $100 billion to save the market, but when it comes to the several thousand dollars spent on the life-saving CSSA, suddenly financial prudence becomes the overriding consideration. Such a way of doing things is like throwing a stone on a person who has fallen into a well, or adding insult to injury!

At least, the Government should improve the present CSSA Scheme and raise the existing assets limit for CSSA in order to let more people receive the necessary assistance.

Madam President, to provide the 200 000 unemployed with an unemployment protection system, the introduction of unemployment insurance is also a proposal that merits study. The departments concerned should proactively study the setting up of an unemployment insurance scheme under which the Government will make an initial injection of funds, with subsequent maintenance being serviced by contributions from both the employers and the employees. People can receive this unemployment insurance at the initial stage of unemployment. The most important thing is, we hope that the Government will use it brains and make studies instead of shutting the door upon hearing unemployment insurance, ignoring the dire straits that people face in times of unemployment.

Madam President, while the wave of pay cut has been surging ahead in recent months, the Government has all along refused to introduce relevant legislation and stressed that it hoped to use some guidelines to facilitate reconciliation between the employers and the employees. The Democratic Party is very dissatisfied with this. Amid the endless occurrences of reductions in wages, double pay and staff benefits, the Government still turns a deaf ear to the situation and keeps on saying that the guidelines are enough. This is in fact self-deceptive and evades the seriousness of the problem.

In face of the economic doldrums and the high unemployment rate, the bargaining power of employees has been on the fall. The Democratic Party thinks that the Government should expeditiously review the existing laws with a view to protecting the employees' interests. First of all, we propose that when an employer wants to cut his employees' wages, he must give them at least 14 days' notice as a cooling off period.

With regard to the issue of a layoff preceded by a pay cut, the Democratic Party proposes to add severance payment and long service payment calculated on a pro rata basis. The calculation should be made on basis of the salary of the employee before the pay cut and multiplied by the number of years of service. Or alternatively, when an employee is to be laid off, his highest monthly salary in the last two years should be used as the basis for calculating severance payment. We also suggest that, instead of using the average salary of the 12 months before the pay cut as the basis of calculating severance payment, the period should be extended to 24 months. By doing so, I hope that the interests of both the employers and employees can be taken care of as much as possible.

Madam President, it seems that the policy address has turned a blind eye on the problem of unemployment among the young people. Unemployment figures of the Census and Statistics Department show that, from May to July, the unemployment rate among youths between the ages of 15 and 19 was as high as 19.4%; on top of this, many fresh university graduates are still unable to find a job up to now. This is not only a tremendous wastage of manpower but will also trigger off a series of social and youth problems. The Government should increase its staff to provide more training and practice opportunities for the unemployed youths, which include arrangement for prevocational training and practice in the private sector, as well as offering allowances or other forms of support to employers so as to encourage them to continue hiring these young people after the practicum is finished. Moreover, the Government should also provide more career counselling services for young people.

As the old saying goes, "things will not become a success without undergoing the pain of reforms". It is now high time for the Government to bring order out of chaos in a bold and resolute manner and do something to boost employment. I earnestly hope that the Chief Executive will suit measures to conditions, gauge the needs of the times and size up the situation and flexibly take effective steps to solve the unemployment problem. He should stop hiding in the Government's ivory tower and unrealistically shouts for more confidence and determination.

Madam President, I shall now turn to the recreational and cultural policy in the policy address. The direction for reforms to district organizations has been stated in the policy address. With regard to the provision of popular recreational and cultural activities, the contributions of the two Municipal Councils cannot be denied. Unfortunately, the Government has set its mind on scrapping the Municipal Councils. When they are gone, the relevant work will be transferred to the Arts Development Council and the Sports Development Council, with executive support furnished by the Government. In fact, from the angle of community participation, such a change has more disadvantages than advantages. Although some members of the Arts Development Council are returned through election among members of the arts sector, their representativeness is still questionable. The Sports Development Council is not even worth mentioning because it is completely a product of an appointment system. When these are compared with the popular election mechanism of the two Municipal Councils, the retrogression in democracy is an indisputable fact.

Last year, Mr CHAU Tak-hay sighed that he was only a commander without soldiers. On the contrary, once we are in the 21st century, I am worried that the powers of professional bureaucrats will see an unchecked expansion. In addition to the gradual erosion of the public right to know, there is also government control over all areas of culture. This year, the issue of whether the Pillar of Shame should be kept can still be vehemently debated in the elected Urban Council, giving the public a chance to understand and to judge. However, without the open decision-making process of an elected council, I am afraid if similar incidents happen in the future, the issue may not even have a chance to be tabled at a meeting of the Arts Development Council before it is secretly barred by the bureaucrats.

Madam President, the Democratic Party thinks that when the Government formulates policies for arts, sports and culture, besides trying to centralize powers, it still stays on the level where money is believed to be the solution to all problems. In the Government's Policy Objectives and Progress Report, words such as "appropriation", "construction of appropriate sites" and "subsidy" abound. But when it comes to how to provide an open, diversified and democratic cultural regime, not only does the Government lack a vision, even a view of its own. The Democratic Party expresses its deepest regrets over this.

Madam President, as there are still two minutes left, I would like to talk about the Ma On Shan rail link in my capacity as the deputy spokesman on transport policy of the Democratic Party. So far as political stance is concerned, I really have not much to talk with Mr LAU Kong-wah of the Democratic Alliance for the Betterment of Hong Kong. However, just now when he mentioned the Ma On Shan rail link, I shared his feelings. The Secretary for Transport is still sitting here, I hope that he would listen carefully. We conducted a telephone survey in the district in early October and successfully interviewed 1 115 residents of Ma On Shan and Sha Tin. The findings of the survey show that 58.9% of the interviewees do not think that the Ma On Shan rail link should terminate at Tai Wai only. When we asked the interviewees if they would choose to take the Ma On Shan rail link when it is finished, 53.2% of them said that they would rather not. More than half of the interviewees said they would continue to go to the urban areas by taking the present modes of transport. Most of them go to the urban areas by bus from Ma On Shan to the railway stations at University, Fo Tan or Sha Tin, and they will not choose the Ma On Shan Railway when it is completed. Therefore, I hope the Secretary for Transport will understand that the people actually anticipate a direct and effective Ma On Shan rail link. We do not want to see the Ma On Shan rail link become an inefficient and losing rail link the cost of which will only be shifted onto the other passengers of the Eastern Railway in the future.

Madam President, I so submit.

PRESIDENT (in Cantonese): Mr HUI Cheung-ching.

MR HUI CHEUNG-CHING (in Cantonese): Madam President, I am afraid that the past one year must have been the toughest year ever for the import and export sector of Hong Kong. First of all, we have to bear the pressure resulting from the drastic currency depreciation of our neighbouring competitors. Then, the paralyzing of the air cargo service at our new airport, dealt us another blow. Right now, we are faced with the rare threat of deflation. It can be said that the import and export industry is faced with both internal and external problems. In spite of this, the public seems to have been looking only at those worst-hit sectors such as the property market, the financial services, tourism and the retail businesses. As for the plight of our re-export and import and export industries, the pillar of our outwardly-oriented economy which had a total trading volume of $3,000 billion last year, the public does not seem to have accorded sufficient attention.

Over the recent few months, the Government has launched a number of financial measures in a bid to help the import and export industry tide over its difficulties. These measures include the lowering of declaration duties for imports and exports, reduced premium and annual premium waiver introduced by the Hong Kong Export Credit Insurance Corporation, and a $2.5 billion fund to assist small and medium-sized enterprises (SMEs). These steps are in the right direction. The Chief Executive has, in the policy address this year, stressed the importance of maintaining a stable exchange rate; this has further removed the worries of businessmen about fluctuations in prices when they place or receive orders. I welcome this.

There is no doubt that the relief measures which the Government has put forward to help the import and export industry out of its plight can be further enhanced both in terms of its quantity and strength. The Trade and Industry Bureau has pledged to step up enforcement actions against illegal import and export activities in its policy objectives this year, but that is all about its assistance to the import and export industry. Moreover, the Business Promotion Division under the Financial Secretary's Office has only pledged to improve the operations of the Marine Department and to provide better services to the shipping industry in its policy objectives this year. So it can be said that no concrete assistance will be offered to the industry.

Apart from enhancing its short-term relief measures, the Government should also plan ahead for the future development of the import and export sector. I hope that the Government can note that, the Mainland is becoming more and more well equipped in terms of infrastructural facilities and the operating costs there are comparatively lower; and it is only a matter of time before China joins the World Trade Organization. This will exert unprecedented pressure on Hong Kong as an import and export centre. The ability of Hong Kong to identify ways of turning adversity into prosperity, of coming up with a development plan mutually beneficial to both Hong Kong and China for the further development of the import and export industry, will produce a direct impact on the future prosperity of Hong Kong.

Therefore, the assistance provided by the Government to the import and export industry should not be limited to the work listed in the reports of the relevant Policy Bureaux. Though it could not be denied that the strength or weakness of other currencies will have a severe impact on the prosperity of the local import and export industry, this does not necessarily mean that it is the most essential deciding factor. Besides prices of goods, factors like fast and efficient services, an extensive trading network and management personnel capable of keeping up with the latest developments are also important to the import and export industry. These are areas within the control of the Government, and it should thus do more in these respects.

Madam President, I think the Government can introduce a series of further measures to improve the business environment of the import and export industry:

First, the Government could assist in freezing or even lowering the miscellaneous fees and charges on imports and exports, such as the handling fees of containers and air cargo terminals;

Second, the Government should put trade information on the Internet as soon as possible so as to enhance operational efficiency. That way, the manufacturers can find out more about trademark registrations on the internet and do not have to spend time on making enquiries at the Trade Marks Registry;

Third, the Government can enhance the functions of the Export Credit Insurance Corporation by, for example, allocating more resources for research and studies and by extending the scope of places under insurance cover;

Fourth, the Government should improve the effectiveness of the existing support measures for the actual benefit of SMEs. An obvious example is that although the Trade Development Council Link is already in service, a lot of SMEs still have to rely on the various chambers of commerce for additional computer support for submitting their applications. The Government should immediately enhance its training programmes for the SMEs and to employ more staff to answer telephone enquiries;

Fifth, apart from improving our internal business environment, the Government should also enhance the global competitiveness of Hong Kong. According to those in the trade, tariffs levied by the European Union Market on goods exported from ASEAN countries are much lower than those levied on goods exported from Hong Kong. The Trade and Industry Department should send more professional negotiators and lobbyists abroad and also seek assistance from the Central Government to fight for preferential treatment for Hong Kong;

Sixth, the Government should improve the mechanism for granting loans to the SMEs from the $2.5 billion fund as soon as possible, and offer them more incentives through lowering interest rates and relaxing the additional requirements on guarantors for those who apply for loans from banks;

Seventh, the Government should find ways to secure the sources of business for the local re-export, new airport cargo and container businesses. I would like to urge the Government of Special Administrative Region (SAR) to identify concrete solutions with the Mainland, so as to solve the long standing congestion problem at the boundary checkpoints. This should not be delayed any further; otherwise in a few years' time, Hong Kong will lose its status as a regional trade shipping centre as the import and export industry gradually ceases to use the container port facilities of Hong Kong for re-export and shipping processed goods from Hong Kong to China;

Eighth, in recent years, the overseas markets of the local import and export industry have been extended to the Middle East and East European countries. But unfortunately, many of these countries do not offer visa exemptions to SAR or British National (Overseas) passport holders, and at the same time they do not have consulates or other representative offices in Hong Kong for providing visa services. In other words, if Hong Kong businessmen want to travel to these places on business, then they would have to go to places where there are consulates of these countries to apply for business visa in person. This is really cumbersome and time-consuming.

I hope that the SAR Government would seek assistance from the Central Government, so as to attract those countries which have not yet set up consulates in Hong Kong to set up their offices here. I hereby urge the Government not to ignore this as a matter of foreign affairs, for an improved access to visa service would help Hong Kong businessmen in opening up new markets and in elevating the status of Hong Kong as a commercial centre.

Madam President, all great plans, all scientific and technological infrastructures and all social services must rely on a constant supply of revenue for support. The import and export industry is an important pillar of our economy, and it generates a vast amount of foreign exchange and stimulates a lot of related trade activities. I hope that the Government would do its best to improve the business environment for the import and export industry, lower its operation costs and enhance the competitiveness of Hong Kong, so that the import and export industry of Hong Kong can prosper.

With these remarks, Madam President, I thank the Chief Executive for his second policy address.

PRESIDENT (in Cantonese): Mr Timothy FOK.

MR TIMOTHY FOK: Madam President, if this Council is fair, it would admit that the policy address is the best Hong Kong has heard in a long time. For some years, we have been given policy addresses that were political and divisive. This one focuses on the quality of life and tries to bring us together.

The Chief Executive has not promised us miracles. He has told us to brace immediate hardships and not to lose faith. He has admitted that the Government cannot create jobs, aid is sparing, the deficit looms, and resources are limited. He has maintained that we will not suffer alone because his Government would also make sacrifices.

But amid the present gloom, he has not been blind to the future. He knows that we will come out of the recession if we turned adversity into opportunity to meet the challenges of the new century. We owe it to ourselves, to our community and to our children to abide by him. We must not desert him at those difficult hours when he is standing by us.

Leadership is forged in crisis. Leadership entails making tough decisions. Leadership is about risking short-term pain for long-term gain. Mr TUNG Chee-hwa has decided after public consultation that the Municipal Councils shall expire when their time is up next year. We should not recriminate over whether those Councils ought to stay. We should seize the moment by helping the Government find an alternative to the Councils that would be more efficient, more cost effective and more in tune with the public needs.

I represent the Sports, Performing Arts, Culture and Publications Functional Constituency. We will be more affected by the retirement of the Councils than anyone else. The two Councils together manage about $2.5 billion worth of services for sports, recreation and arts each year. They also are responsible for some subsidies and training programmes at the grassroots level. If there are people who should be most resistant to change ─ and change is always unsettling ─ they are us. But we are not overwhelmed by panic. We are, instead, calm and deliberate because yelling and fretting get us nowhere.

We have told our constituents that there might be some inconveniences at the beginning when one system replaces another. We have also told them that now, there is a chance for us to advise the Government on how best to deliver the services and funds to the end-users. Instead of criticizing, which is too easy, we should be contributing. This is our role.

Last year in his first policy address, the Chief Executive only briefly mentioned sports, arts and culture. I consider that an oversight, because those areas of public interest influence the people's lives in the most direct way. Our identity, aspirations and everyday living are wrapped up in the sports that strengthen our bodies and character, the arts that inspire us and culture that galvanizes us. I am pleased that my constituents have converted the Chief Executive to our point of view. I am especially glad that he shares our vision of a cosmopolitan Hong Kong as the London or New York of the Orient. We must make the dream a reality.

The policy address proposes a multipurpose stadium complex, an aquatic centre and an arts centre in West Kowloon. The Government is to embark on a feasibility study next year. If we are overly eager, we should be excused because we have waited what seemed like eternity for such an enterprise. I personally have been seeking for Hong Kong to concentrate its heart and soul in an area, which will be a combination of bazaar, carnival, gallery, and sports extravaganza that must be self-financing, expertly managed and esthetically impressive. I think the Greeks have a word for such a place called "lyceum", which is no monument to ego but has to be functional.

We urge the Government not to delay. Time is pressing. Other rival cities in the Mainland and throughout Asia are investing a lot on projects of arts and sports to nurture civic pride and to attract the tourists. We cannot lag further behind when we are already late in entering the race.

We also expect a direct say in what the complex should contain because we ─ sportsmen and artists, not bureaucrats ─ are the experts. We have competed and performed at some of the most astonishing venues. We have absorbed the knowledge and are keen to impart it, free of charge. We accept that it is a part of the Hong Kong corporate culture to hire expensive consultants. This is "okay" with us as long as we provide the insights to go with the consultants' mechanics. We have had too many fiascoes ─from stadium grass that would not grow to airport computers that did not work ─ to leave everything to outside consultants. What we want is a partnership. The Government says it has to be prudent and there is nothing more prudent than to tap information ready at hand for no fee.

The policy address offers our film industry $100 million for technological innovations. This amount is not really a lot of money in today's film industry. A typical big budget Hollywood movie can cost many times of that. We, nevertheless, applaud the generosity but we must stress that what hurts our once dynamic film industry, the third most productive after Hollywood and "Bollywood" (Bombay), is not just the absence of state of the art wizardry.

Hong Kong has a lot of film making talents. I know we are masters of improvisation. Making movies on a shoestring is our stock in trade. But now people want big bucks and big bangs in their movies because Hollywood has spoiled everyone.

The film industry in Hong Kong wants the Government to recognize the valued role of movie making that goes beyond giving subsidies. We would like the Government to ease the red tape so that we may film on location in many more places of spectacular scenery and setting. I understand that New York, Toronto, Vancouver, London, Paris and others welcome film making that publicize their outstanding features. Why not Hong Kong?

Ultimately, the problem with our movie industry is that we are not producing films that sophisticated and discriminating audiences want to watch. Today, there are many entertainment options to movies, especially bad movies. We must produce films that draw on our heritage and other new themes that can come vividly alive on screen with help from the most advanced special effect technology.

We ask that, besides the $100 million fund, more money should be invested in the arts of movie making, story telling, plot molding and script writing. We must have films that portray the dignity of our civilization and the integrity of the people rather than pander to stereotypes. Maybe time has come for a proper film academy modelled on the famous UCLA Film School, which gave the world COPPOLA, SPIELBERG and LUCAS.

We are aware that the Government is reviewing sports subsidies. Our advice is that the Government should ensure that funds be delivered most efficiently to athletes and coaches. These sportsmen are the ones who bring Hong Kong glory and pay their price with their youth and dedication.

Please allow me to do a bit of plugging for the Amateur Sports Federation and Olympic Committee, of which I have been elected President. We have to realize that the Olympic movement is not just about the Games that take place once every four years. We live, breathe and embody the Olympic spirit of volunteerism and love of fair competition every day of the year. This is our mission.

Now, let me end by repeating my praise for the policy address. Now also, let me appeal to my fellow legislators to vote for the address after registering their concerns. We could all learn from the sportsmen, who are fair in their assessments, and from the artists, who evoke if not beauty, then the longing for it. Madam President, I support the motion.

PRESIDENT (in Cantonese): Mr YEUNG Yiu-chung.

MR YEUNG YIU-CHUNG (in Cantonese): Madam President, the policy address this year is an especially challenging report. First of all, given the turbulent economic environment, it is already a big challenge to compile this policy address. We are experiencing a particularly adverse economic situation, the worst in 30 years, internally with a negative growth recorded for two consecutive quarters and an ever-worsening unemployment problem, and externally with the vicious attacks by international speculators. It is indeed a highly difficult task for the Government of the Hong Kong Special Administrative Region (SAR) to save the economy in Hong Kong and to restore the people's confidence. Moreover, the response to the policy address is also a big challenge, for it has met with many diverse responses, some regarding it highly while others condemning it. This has indeed posed a great challenge to it.

Is the policy address really that disappointing? Madam President, two weeks ago when my colleagues and I were sitting here together listening to the Chief Executive reading out his policy address, I felt that although it did not bring us any surprises, it was still acceptable. When I heard some people criticizing it so severely and regarding it as almost worthless, I thought I had not read its contents clearly enough. So I read it over again a few times, but still I cannot find any proof that it is so very poor.

The measures put forward by the SAR Government to stabilize the property market should be considered practical, very correct and are also in line with the interests of the general public. Everyone knows that if the property market is unstable, the economic is doomed. Only when the stock and property markets are stabilized will the people's confidence be restored.

Madam President, in the policy address this year, the Government, other than proposing to enhance the existing vantage positions of the financial services sector, the tourist industry, small and medium-sized enterprises and the manufacturing industry, has also provided a long-term strategy on economic diversification, as well as the development of innovative technology and high value-added industries. All these goals and strategies are in line with the overall and long-term interests of Hong Kong and are perfectly correct.

Regrettably, luck was not on the side of the Chief Executive. Because of the unfavourable international economic climate, the economy of Hong Kong has also been plunged into unprecedented difficulties, consequently, the policy address was met with criticisms and discontentment of the people as soon as it was published, and this was totally understandable.

However, it is unfair to find fault with the policy address on this basis; and it is even more unfair for some to lash out bitterly and sarcastically at the Chief Executive himself. If we ask those who have criticized the Chief Executive so mercilessly to rewrite the policy address, will they be able to come up with a more concrete and better package to solve the various problems? Will they be able to meet the extensive demands of the various social strata in a more comprehensive and balanced manner?

Some have also criticized that the policy address makes no mention of democracy and is therefore unacceptable. No one would object to having a passion and support for democracy, but I resent the stereotyped propagation about democracy, giving everything a simplified way out alleging that democracy is the cure for all problems. This only gives people a feeling that democracy has been taken as the Tiger Balm Oil, which is by no means a scientific approach to solving problems. The correct attitude should be practical and realistic, administering the right medicine to the case. Hearing these people chanting the stereotyped propagation about democracy, I seem to be hearing Confusion moralists preaching the stereotyped morality, and the two achieve the same effect. The two "preachers" share one common feature, that is, they like to moralize everything, or they relate all problems to democracy. For instance, they say, to resolve the economic crisis, the most important thing is to reconstruct democracy; to resolve the employment problem, the first thing to do is to enhance democracy; then, for social development, they reckon it must be done in the democratic direction. All such stereotyped propagation on democracy will only stifle democracy itself.

Of course, there is no doubt that the policy address still leaves much to be desired, but our analysis and evaluation must be objective and to the point. I believe that one of the major reasons why the policy address has attracted so many negative criticisms is the failure on the part of the Administration to conduct a relatively comprehensive review to look deeply into the administrative blunders in the past year. Avian influenza, medical blunders, the new airport fiasco and the financial crisis have all exposed the lack of a crisis consciousness in senior government officials and their incapability in handling emergencies. The failure of the policy address to look squarely at and probe deeply into these problems has made it inevitable for people to harbour grievances and resentment. This is what the Administration should take a lesson from.

Madam President, in what follows, I would like to express, on behalf of the Democratic Alliance for the Betterment of Hong Kong (DAB), views mainly on the areas of education and information technology.

Although Hong Kong is suffering from a serious economic downturn, the SAR Government has shown that it does have a visionary perspective and a commitment to the community by continuing to increase its spending on education and giving education a top priority. The DAB commends and supports the Government for its efforts, for all along, the DAB has requested the Government to increase expenditure on education to 4% of the GDP.

The policy address has put forward some specific education policies such as the implementation of whole-day primary schooling throughout the territory in the year 2007, providing grants to schools to help them draw up management programmes, setting up information technology co-ordinator posts and encouraging the expansion of private schools. All these are generally welcomed by fellow colleagues in the education sector.

However, the policy address has actually offered very few innovative ideas in regard to the education policy, but there are existing problems mainly in the following areas:

First, the failure to set down the timetable and specific measures for recruiting all new teachers at graduate level and for teacher training. This has been undertaken as a commitment in last year's policy address and the Government has received the Education Commission's review report a long time ago, but it has yet to come up with a finalized timetable. The DAB hopes that the Government will give the public a definite answer without delay.

Second, the lack of a major breakthrough in the use of the mother tongue as a medium for teaching. As the Government has emphasized the value in the existence for government-run schools, saying that they are testing grounds for education reforms, these schools should try out, demonstrate the effect of and take the lead in the education reforms introduced by the Government. The DAB considers that government secondary schools should take the lead in implementing mother tongue teaching in the lower forms to indicate the Government's determination and sincerity in promoting this policy.

Third, the failure to improve the teacher-student ratio. We understand that in order to expedite the implementation of whole-day primary schooling, the Government has to increase the class size of primary one by two students and shelve the reduction of class size in secondary schools. But the policy must have complementary measures to go along with it. The Government should recruit more teachers and improve the ratio of teachers to students in order that the quality of education could be safeguarded. To satisfy both ends, the DAB proposes to increase the number of teachers according to a specific teacher-student ratio. It will resolve the problem of insufficient accommodation for the implementation of whole-day schooling, and at the same time without incurring extra government resources.

Fourth, no mention of the idea of "one social worker per school". The current practice is that two schools have to share one school social worker. The Government has only promised to strive for having three schools sharing two social workers, which falls far short of the strong request of the education sector over the years. The DAB hopes that the SAR Government will set down a specific timetable for the implementation of the policy of "one social worker per school" with no delay.

Madam President, although only very few innovative ideas have been put forward in regard to education policy, we can still see that the policy address intended apparently to convey a new idea in education policy. That is, the Government has changed its past "across the board" approach in the allocation of resources and has introduced competition into the system to support the strong and assist the weak. We reckon that this change implies a definite progress, and it will bring about a more pragmatic, flexible and cost-effective application of resources.

In respect of information technology, the policy address this year has obviously shown a clearer direction. The Government wants to build up an open general interface which will be conducive to the development of electronic public utilities services and electronic commerce. A broad view of all the proposals, however, will show that the Government is still devoid of practical measures to reinforce the construction of a good broadband network system to cover the whole territory.

Madam President, electronic commerce is a revolutionary trend for business operations in the future. The policy address shows the Government's awareness to the importance in developing electronic commerce. But I would like to remind the Government here that our neighbours have already set off their ventures in this area for quite some time. Singapore has already introduced a law on electronic transactions and is planning to become the world's hub for electronic commerce in five years' time. The Singaporean Government has also joined hands with a certain consortium to develop the technological application of Java. The Taiwan Government has, too, started to adopt electronic technology in the registration of identity cards since 10 October to facilitate the development of electronic trading. There is a genuine need for Hong Kong to pick up the speed in order to catch up with them.

From what has been said, we can see that it is not easy for Hong Kong to become an Asian electronic commercial and trading centre. The DAB suggests that the Government should vigorously create a favourable environment for the development of electronic business, which includes:

1. Opening up sufficient bandwidth for communication. This is the deciding factor for the development of electronic trading. To achieve this, there is a need for Hong Kong to have an electronic information environment that is open to global competition.

2. Ensuring personal data will be respected and properly protected. In this regard, both the industry itself and the Government bear definite responsibilities because any slight oversight will undermine consumer confidence in the enterprises. As for the Government, it must establish a safety mechanism to ensure the confidentiality, authentication and payment. The proposal by the Government to establish a public certification authority is one of the key factors in safeguarding electronic commerce.

3. Drawing up relevant legislation to establish a sound and effective framework to ensure that intellectual property rights are duly respected. In addition, the legislation must have the power to protect the interests of the industry and the consumers, while at the same time facilitate the operation of the market.

4. Setting up a safe and user-friendly electronic payment transfer system.

5. Causing the system, apart from considering the demand of the local market, to be compatible with the international system so as to attract foreign operators and consumers.

6. Developing novel commercial techniques, for to most enterprises, these are the requirements in addition to workers well versed in information technology when conducting electronic commerce, so it is essential to step up the training of human resources.

As regards the problem of the millennium bug, with what the Government has done so far, is it enough to solve it? This is indeed worrying. The Government once estimated that before June 1996, 99% government departments would be able to rectify the numeral representation of the year 2000 in the computer and starting from January 1999 they will be able to report on the progress of the rectification every month. The DAB hopes that the Government will immediately collect the information, estimate the losses incurred in cases where the millennium bug could not be properly eliminated, and take measures without delay to help the whole territory tide over this crisis. The DAB also urges the Hong Kong Government to co-ordinate a try-out for all departments and make public the findings afterwards. The Government should also draw up a contingency plan to prevent the breaking out of disasters.

With these remarks, I support Dr the Honourable LEONG Che-hung's Motion of Thanks.

Thank you, Madam President.

PRESIDENT (in Cantonese): Mr LAW Chi-kwong.

MR LAW CHI-KWONG (in Cantonese): Madam President, the debate this year is very interesting. Other than discussing the policy address itself, Members also comment on articles commenting on the address. I do not intend to comment on the comments made in such articles. I will only express some opinions about the content of the policy address.

Some of my views are relating to social welfare. In this year's policy address, the part about social welfare could be finished within a short time as it is extremely brief. Very little has been said about it and very little has been done, and I can just say that much. However, in today's debate, I cannot but speak on something that I cannot hold back.

Everyone understands that in the face an economic recession, the society, individuals and families will all encounter difficulties and the number of people in need of help would be much higher than that when the economy was good. However, according to the Government's way of managing the finances or allocation of resources, any increase in new resources for the coming year is calculated on the basis of Medium Range Forecast of economic growth. When there is a downturn, resources available for allocation would be limited, but at the same time, the demand on social welfare would increase more rapidly because of the economic situation. On the one hand, fewer resources are available, but on the other hand, the demand increases substantially, so very obviously, when there is a downturn, the increase in the social welfare services will not be able to catch up with the increase in their demand.

Even when the economy is in a good shape, it does not necessarily follow that the Government will improve on social welfare services. In 1993, when the former Governor, Mr Chris PATTEN, attempted to make some slight improvements in the expenditure on the social welfare services to make up for some so-called shortfalls previously, he was immediately accused of driving Hong Kong into a car-crash in which heavy casualties could result therefrom. Some even considered it as conspiracy on the part of the British Government, alleging that its real intention was to import into Hong Kong the opium of welfare before its departure. This rightly explains why there have not been any improvements in many areas of welfare services, and instead the services have fallen short of the real demand and lagged further and further behind the targets. This year, I want to again cite an example which I have brought up on many occasions: In 1981, the Government has set the standard for the family casework service at the ratio of one social worker to 50 cases. Up till the Budget for year 1993-94, the Government adjusted this ratio to one social worker to 65 cases, an increase from 50 to 65 cases. That is to say, after 10 years, the number of cases to be handled has increased by 15. Then, on the 12th of this month, government representatives have even told us that the target was 70 cases rather than 65. Actually, now each social worker has to handle about 78 cases instead of the target of 70 set by the Government. If, according to the policy address, only 29 additional family social workers will be recruited next year, then each one will have to handle about 85 cases a year. To put it in a nutshell, this constant pushing back of the targeted ratio has always maintained an enormous gap between the real situation and the target. This is an interesting phenomenon which we can find in the development of social welfare over the years.

In view of this, early this year, the welfare sector, including the Hong Kong Council of Social Service, the Hong Kong Social Workers Association and the Hong Kong Social Workers' General Union, proposed the establishment of a social welfare services development fund. At that time, this proposal did receive the support of all political parties, but government response was far from vigorous. An obvious reason was that the bureaucrats in the Government felt that this proposal has deviated from their usual way of handling things. I hope that the Government will adopt a pragmatic attitude and take a fresh look at the present situation again whether there is a need to establish a fund to maintain a steady development for social services in order to meet the demands of the needy on such services.

Another issue concerns the support for the unemployed. In this policy address, apart from granting more funds to the Employees Retraining Board, there is practically no other proposals for relieving the hardships of the unemployed and their families, or helping them find jobs. As my colleagues from the Democratic Party will discuss this issue later, I will just bring up a few points now for consideration of the Labour Department.

The Labour Department only has a limited number of offices, about 10 of them, which provide services for job seekers. A few months ago, some district members of the Democratic Party tried out a new service. They posted the information about job vacancies from Labour Department in their own offices and many job seekers have also made use of this service, but these district members could not provide further services due to limited resources. I hope that the Labour Department will consider letting some voluntary organizations take over the service of providing assistance to job seekers, for on the one hand, the service can be made available further into the various districts, providing information to those who need it, and on the other hand, the Labour Department can also make use of the driving force of these voluntary organizations to provide more innovative forms of services with the objective of giving the unemployed a better chance to successfully secure jobs.

Another related issue that can be considered is about the development of the market for part-time domestic helpers. Right now, many women, including those receiving the Comprehensive Social Security Assistance (CSSA), do want to find part-time jobs. But at the moment this market is not mature enough, though some people would hire the foreign domestic helpers of their relatives or friends to help them out with their housework on a part-time basis. I believe that some of these people do not know that this is against the law. Moreover, it is in fact very risky to employ a part-time domestic helper as the employer does not know if the helper would steal things from them, while the helper is also ill at ease as regards what would happen in the employer's place. Therefore, to develop this market, the Government should consider subsidizing some organizations to provide training and referral services to the part-time domestic helpers. This way, both the employer and the worker would have greater confidence in each other. At present, such services, even if they are available, are very limited. Nevertheless, I believe that in three to four years' time, this market, subject to strong promotion, will mature and will be able to provide a large number of jobs.

At present, there are 180 000 foreign domestic helpers working in Hong Kong. If we take out those who work in families that do not need full-time domestic service, say one third of them, then we will have 60 000 domestic helpers who can work for two families and will thus create 120 000 part-time posts for domestic helpers. In this respect, I feel that we should do our best to study how we can help to develop the market for part-time posts.

Another problem is that in the policy address, Mr TUNG Chee-hwa brought up the review on the CSSA Scheme. Last year, some viewed that the review should be completed within a year, and now it is said in the policy address that the review would not be ready until the end of this year. I have already expressed my views on many other occasions, so I do not want to repeat them here, or perhaps I should also shut up. But I truly hope that the Government will not again manoeuvre public opinion to incite public resentment against the CSSA recipients. Last week, an incident occurred involving two elderly CSSA recipients, one is a 65-year-old son and the other is his 87-year-old mother. The son died probably because he was unable to get prompt medical attention after a fall and his paralyzed mother was starved to death as a result of the lack of care. I would feel a pain in my heart whenever I think of this mother who was aware of the plight of her son but being unable to help him, could only wait helplessly for her death. I know that in our society, there are in fact many people living helplessly under great hardship, but our social welfare system and the CSSA Scheme can only provide these people with minimal support. We also know that indeed there are people who would obtain welfare services through dishonesty and we should make an effort to seek them out and impose some punishment on them. But such people account for only a minority among all welfare recipients. We should not disgrace all recipients of the welfare services and the CSSA just because of a few black sheep among them. I hope that the Government will show a little human kindness when dealing with this issue and I also hope that the Government will stop inciting resentment among the public on this.

Recently, perhaps because I have commented on such public opinions, I received some phone calls accusing me of being mentally ill, criticizing me for criticizing the Government and saying that my remarks somehow indicated that I was mentally ill. I do not know what kind of mental disease were they referring me to.

I am the Democratic Party's spokesman on medical policies but I will leave it to the Honourable Michael HO to give a detailed account on the part of medical policy in the policy address. Another issue that I wish to discuss is environmental protection. In the debate last week on sustainable development, I have offered many of my views and here I only want to speak on two points. Last week I talked about air pollution and many colleagues have also spoken on this problem today. In the policy address, Mr TUNG Chee-hwa mentioned that he would require all new taxis to use liquefied petroleum gas (LPG) as fuel by the end of the year 2000. We welcome this policy but the Administration has not made any consideration on how to encourage the present taxi owners to switch to LPG-fuelled cars at the earliest possible time. The Government should consider offering tax concessions or other means to encourage the taxi owners to switch from their present diesel-fuelled cars to those which are more environmental-friendly at an early date.

Another issue concerns waste recycling. In the policy address, it is mentioned that the Government would look further into the possibility of developing waste-to-energy incineration. We are in support of this aspect. But the Government does not seem to be enthusiastic enough about promoting waste recycling. As recycling of waste is not part of the living habit of Hong Kong people, it is very difficult to count on private companies alone to carry out waste recycling. The Government should consider more positive actions. It can develop a waste recycling system through the Environmental Protection Department or some subvented organizations to gradually help the people to build up the habit of separating their waste and putting different kinds of waste in different collection boxes. Although the Government has already made a greater coverage about the environment in this policy address, I still think that it should make more vigorous efforts in order to better protect our environment. I so submit.

PRESIDENT (in Cantonese): Mr LEUNG Yiu-chung.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, from the English colonial period up till now, the policy address as presented by our Chief Executive this year is by far the longest. Over the past two weeks, I have read many public comments about it but they are not at all like what those toadies say, that this policy address is the best of all and that it is flawless. On the contrary, the public opined that the policy address has left much to be desired and that most people share the same view about the inadequacies of the policy address. This has indicated that the policy address indeed utterly lacks substance and shows no guiding principle of administration.

I work as a teacher. When I look at this policy address, I feel as if I am being faced with a student's examination paper which I have to mark. When a student does not know how to answer a question, he will try very hard to make up one, loading it with relevant and irrelevant materials alike, hoping that the teacher would give him a few more points out of sympathy which would salvage him from the verge of failure and secure him a pass. However, this is futile, for unless the marker of the paper does not have any judgment, otherwise, the so-called guiding principles of administration in the policy address means nothing to the general public and it is tantamount to a "blank answer sheet" as it offers nothing whatsoever to address the various needs of the people, and it is a complete failure.

Although people generally consider this policy address a failure, the Chief Executive still praises himself and insists that he has "no selfishness, no grudges and no regrets" in defence. These "three noes" have become a public laughing stock. From my point of view, there are indeed "three noes" in this policy address, but what are they? They are "no guts, no brains and no heart".

What does "no guts" mean? "No guts" refers to the Government's lack of courage to admit the many serious mistakes that it has made in the past, ranging from the avian influenza incident to the new airport fiasco, as well as Mr Joseph YAM's boasting about repulsing the speculators with merely one single stroke of high interest. It would exhaust all books to recount on the mistakes made by the Government's mistakes made in the past year. The Honourable LEE Cheuk-yan has asked the Government to admit its mistakes. His purpose is not so much as to make the Government pay for the mistakes, he has only wanted to show that if the Government of the Hong Kong Special Administrative Region (SAR) is a responsible government, it will have to find out the root of its mistakes, so that improvements could be made from there. Very unfortunately, the SAR Government has no guts to admit it but insists on "saving face" and defending itself. The Chief Executive, in particular, has said something as "things could of course have been done better." But if things could have been done better, why did they not do it but had to gloss over their mistakes? It this what a responsible government should have done?

The senior officials frequently commit mistakes but are still very secure in their position. No wonder the Government has neither the intention nor the guts to promote democracy. Right from the very beginning, in its introduction, the policy address states, "In the past year, ...... the Hong Kong SAR Government [and] Hong Kong people have been running Hong Kong." But in fact, those running Hong Kong are not its people but a small group elected from within a small circle and consisting of the Chief Executive, the Executive Council appointed by him and a bunch of senior officials. We have seen the turnout of 1.5 million voters who enthusiastically cast their votes in the election for the Legislative Council, but regrettably, even under such a circumstance, the Government still carries out its wilful decisions, subject to no monitoring, no restriction and no requirement for accountability. In a bid to maintain these "three noes", the Government naturally has no guts to amend the Basic Law in order to accord the people any chance of actually and genuinely being the master in "running Hong Kong".

As for "no brains", it means that the Government has made no efforts to draw up policies to improve the present economy, particularly the unemployment problem, in face of the present economic crisis. In the last two weeks, we have heard many criticizing the policy address that despite policies proposed none of them is "an immediate aid that can bring us urgent relief". The Chief Executive's excuse is that "the Government has no magic wand and it cannot resolve the economic and unemployment crises overnight". I feel that this is nothing but mere sophistry. It is of course impossible for the Government to lower the unemployment rate from the present 5% to 0% at once but it should at least make an effort to ease the strain. For example, many Members have made quite a lot of suggestions, including to create more jobs such as health care workers and domestic helpers so that more services are available to the grass roots and at the same time more jobs opportunities are developed. The Government should also create more employment opportunities by constructing more public housing units and other infrastructural facilities. However, our Government has been too reluctant to use its brain and just pick up the excuse that "the problem cannot be completely resolved overnight" to evade its responsibility. In respect of the present manufacturing industry, the Government has only barely touched on the subject but failed to consider any specific means to revive it.

Instead of implementing practical measures that need to be done now, the Government has instead spent a lot of time talking about some grand yet long-term projects that cannot be implemented in the short run. As to whether these grand projects and long-term goals can lead Hong Kong in tiding over its difficulties or bring any real benefits to Hong Kong, the policy address has made no mention of that. Of course, I also hope that these long-term goals can really be beneficial to our development, but I can also see that these so-called long-term goals do have many hidden obstacles. Regrettably, the Government's usual tactic is only to set the goal, allocate some money to establish a fund and would then consider its job done, and it never cares about the specific ways of implementation. The Special Finance Scheme for the small and medium-sized enterprises introduced earlier is a very good illustration. It is very obvious that the Scheme has turned into neither fish nor fowl. And now, there is a move to establish high technology industries. But could $5 billion cast a major effect on this project? There is no affirmative answer to that. The Government has not made any assessment and cannot give us a definite answer. On the other hand, the Government is going to allocate $100 million to set up a Film Development Fund, but there is no way to learn about how this money is going to be spent. Even those in the film industry have also queried whether the Government has thought about what it wants to do? To put it in a nutshell, the Government has no strategy whatsoever. Its only hope is to conceal everything by only "reporting on the bright side".

Another issue of concern is that even if Hong Kong could really become an international centre and metropolis in the coming decade or so, will the grass roots who have received relatively little education or skill training be benefited from this so-called international centre or metropolis by that time? If by then, their skills or education level have not yet been upgraded, will they be able to find jobs? The policy address has not answered these questions, neither has it proposed any specific co-ordinating measures to give the grassroots a gleam of hope. This, at most, can only benefit a handful of professionals who would be able to secure a better chance for further development.

All these serve to prove the "heartlessness" of the policy address. The Chief Executive always flaunts his Confucian compassion but he has ignored the minority vulnerable groups in society who are most in need of care. If the Government really sees no prospects of further development for the manufacturing industry, and that it is unable to help the grassroots to meet their everyday needs or to help those petty citizens who are under the constant pressure of wage reduction and the loss of jobs, why does it not consider setting up an unemployment subsidy and increase the CSSA payments to help these people tide over their difficulties? The Government has not done anything of the sort. Not only has it failed to do so, but it has made preparation for cutting on the CSSA payments and at the same time spread such defaming statements as "the CSSA will nurture lazy bones".

As regards housing, the Government has also totally ignored vulnerable groups in society who are most in need of care. Despite the Government's pledge to reduce the average waiting time for a public rental unit to three years by 2005, it has not thought about expediting the construction of public housing. For instance, although the Government is about to suspend the construction of Sandwich Class housing, it never occurred to the Government that such land could be used to construct public rental housing. Not only has the Government failed in doing this, but it has also tried to make use of unruly means, that is, to have the applicants undergo an assets test to sift out a certain number of them in order that the Waiting List could be shortened. Besides, what makes us think the Government should feel even more ashamed is that the policy address has made no mention about the cage homes. Although we have already debated on this subject at our Council Meeting last week, I still wish to reiterate that the cage home problem is the shame of Hong Kong and I hope that the Government will consider practical solutions to deal with it.

Moreover, although the Chief Executive has laid great emphasis on the welfare of the elderly in both of his policy addresses, very regrettably, the Government has yet to attain its past goals. I really doubt whether the Government really has the heart to care for the vulnerable groups in society. At a time when the Government is running a bit short on resources and has to prioritize the interests of the various strata in society, we only see that the Government will first disregard the interests of the grass roots.

Yet, no matter how, there are still merits in the policy address, for in paragraph 18 of the Introduction, it states, "This (change) had led to unease and difficulty, but it can also be a force for stimulating new ideas and creating new opportunities." The Honourable Martin LEE also mentions "novel thinking" in his amendment. This is indeed the time for us to think about what "new ideas" will lead Hong Kong out of these difficult times.

Unfortunately, the present idea of administration of the Government is to stand back and allow the vulnerable groups to run their course, advocating the philosophy that the fittest will survive while the weak will fall prey to the strong. Since only "the fittest will survive", the people should not ask the Government for anything and there is no need for the Government to bear any responsibility, that is, "the people will have to depend on themselves while the Government will only have to stand by the side and watch". No wonder the Chief Executive has asked everyone to lay bare their shoulders and jump into the water to battle the flood, trying to resolve problems with the "subjective initiative" strongly advocated by MAO Zedong years ago.

However, with this kind of attitude on the part of the Government, such a "new idea" will only add to the people's resentment against the Government. Therefore, to maintain an effective rule, the SAR Government must exercise its courage to break the existing restrictions and deal with the present plight with positive new ideas in order that the people could truly build up their confidence.

Here I would like to propose three points which I hope that the Government will accept. First of all, the Government must give priority to the interests of the vulnerable groups, including the unemployed, caged lodgers, single-parent families and the handicapped, from among the various social strata. In this economic downturn in particular, they are the first to bear the brunt and suffer the greatest impact. Instead of trying every way to reduce their welfare, the Government should on the contrary consider increasing it so that they can also lead a decent life.

Second, the Government should stop evading its responsibility under the pretexts of "positive non-intervention" or "not having the magic wand". Instead, it should make vigorous efforts to promote and help revive the economy. In particular, it should take concrete measures to assist the small and medium-sized enterprises and the manufacturing industry which are still in existence in Hong Kong. At the same time, it should also increase public spending to stimulate internal demand.

Third, this is also the most important point. It is really enabling the people to "run Hong Kong" by themselves because only when the Government is elected by and is accountable to the people will it truly act according to the aspirations and needs of the people. That is also the only way to strike at the root of the problem. Therefore, we should strive for amendments to the Basic Law immediately and request the Chief Executive to submit it to the Standing Committee of the National People's Congress for endorsement, so that the next Chief Executive will be elected by universal suffrage and all Members of the next Legislative Council will be returned by direct election.

Lastly, I have also to point out that this very moment is the right time for a change of the leadership. It is not until we have a change in the leadership could the livelihood of the people have any real improvement.

Madam President, I so submit.

PRESIDENT (in Cantonese): Mr Michael HO.

MR MICHAEL HO (in Cantonese): Madam President, in the opening paragraph of the policy address this year, the Chief Executive says that "Hong Kong people have been running Hong Kong in accordance with the Basic Law". Although the people of Hong Kong have yet to really run Hong Kong, the Government of the Special Administrative Region (SAR) which has been "in real charge" should have been a different government from the colonial administration. I have never expected anything from the colonial administration, for it would only have its ultimate interests in mind before its departure, and would not thus plan for the long run. However, the SAR Government should have set down its commitments clearly and tell the people how it is going to set the various long-term objectives and perform the difficult task of revising all those out-dated policies.

The existing health care policy was formulated as long as 24 years ago, in accordance with the 1974 White Paper on Health Care. That is why it is now totally unable to cater for the needs of our present-day society. That the colonial administration did not attempt to up-date this policy is entirely understandable, because to all governments, health care has always been a complex and "thorny" issue, a big headache, which requires very costly solutions. And, as such, only a government with vision and determination will have the courage to make concrete commitments.

Paragraph 140 of the policy address reads: "...... to help us draw up long-term policies, the Secretary for Health and Welfare would review the financing and delivery of health care in Hong Kong." I have read this sentence over and over again for no less than 10 times and cannot help being puzzled by its obscurity. On the one hand, it is quite clear from this sentence that in order to draw up long-term policies, the Government is committed to conducting a review on the "financing" and "delivery" of health care in Hong Kong. This means that the Government is determined to draw up a long-term health care policy, and the studies on these two areas are meant to provide the assistance required, but while the Government pledges to draw up a long-term health care policy, it does not set down a definite date for the purpose; there is no undertaking on the part of the Government as to whether our health care policy is to be revised next year or at some other time in the near future.

I must point out that the consultation exercises which followed many past reports were carried out with precisely the same purpose of assisting the Government in formulating a long-term health care policy. In the case of the 1985 Scott Report, for example, the Government mentioned that an appropriate policy on hospitals would form a very important link in the overall health care policy. Then, the Report on Primary Health Care in 1992 brought about the second link. And, a consultation paper in 1993, entitled Health Promotion, also specified that its aim was to prepare for the formulation of an overall health care policy. This time around, it is similarly said that studies on the "financing" and "delivery" of health care would be conducted to provide a basis for formulating a health care policy. In this way, practically every consultation paper and every study have claimed to be serving the purpose of preparing for the formulation of a long-term health care policy. So, with respect to the formulation of a long-term health care policy, will the Government tell this Council the extent of its commitment? When is it going to publish a white paper on health care? I demand that the government officials concerned should have to give a definite answer to this question. When is the Government going to publish a white paper on health care? I really fail to understand why the present Government, which claims itself to be the "master of its own house", should have failed to do something which even the British Hong Kong Administration had the courage to do as far back as 1974.

The policy address puts forward an Enhanced Productivity Programme for government departments and public agencies. The Hospital Authority (HA) is of course one of the public agencies referred to. However, will the HA still able to deliver a productivity gain of 5%? To answer this question, we need to look at three factors. First, over the past few years, the HA has already accumulated a productivity gain of 8.5% (according to Dr LEONG Che-hung, the productivity gain should be 7.5%): 1% in 1993-94, 2% in 1994-95, 3% in 1995-96 and 2.5% in 1996-97. And, for 1997-98, individual hospitals are required to set their own targets of productivity gains. This means that the aggregate productivity gain up to 1997-98 will certainly be higher than 8.5%. So will the HA still be capable of delivering an additional 5% of productivity gain? Second, for successive years in the recent past, there have been increases in the number of in-patients, out-patients and accident and emergency patients treated by the hospitals under the HA. This in itself represents an obvious productivity gain because the ability to treat a greater number of patients by using the same amount of money should be regarded as having achieved a real productivity gain. And, if we look at the number of in-patients, we will notice that there was an increase of 2.6% last year and an increase of 4.1% in the year before last. For the number of out-patients, there was an increase of 9.3% last year and an increase of 8.8% the year before last. These are substantial productivity gains. Third, the Government is right now negotiating with the HA on its plan to recoup $100 million from the HA in the next financial year. I hope that Honourable Members have heard clearly what I said just now ─ the HA is now required to maintain its existing levels of services next year but the funds allocated will be cut by more than $100 million. The HA will no doubt receive additional funds for the 800 or so new hospital beds, but with respect to the funding for its existing services, there will be a cut of over $100 million. This issue will be discussed at the meeting of the Health Services Panel to be held on 9 November, but I hope that Members not on this Panel will also attend and contribute their views to the discussions. In view of the three factors which I have mentioned above, we must consider very carefully whether the HA will still be able to deliver a further productivity gain of 5%? What will be the consequences if it really does so? In addition, I must ask, why must the Government recoup the $100 million? If this sum of money is the result of an economy drive, why should it not be ploughed back to its services for further improvements? Is not the HA awaiting more resources to effect improvements in many areas, such as nursing manpower, waiting time for out-patients and many others?

Turning back to the issue of productivity gain. In this regard, the Government should also note the experience of the HA in such programmes. Since money is mostly used to employ manpower (for services must be delivered by people), the most straightforward way to enhance productivity, that is, to save money, will be to cut manpower. Alternatively, as with what the HA is doing right now, recruitment of new staff can be deferred whenever any existing employees resign. That way, the number of employees can be reduced, and naturally the goal of saving money could be achieved. However, will such a method lead to inferior service quality? Can the existing standard of services be maintained? And, is there any supervision? Methods as such should not be considered as any genuine productivity gain. On the mode of the provision of health care, I must say that it is now the time for us to review the structure of the HA. For such a gigantic organization like the HA, which manages as many as 42 hospitals and incurs a total spending of $2,900 million in 1998-99, can it be effectively monitored by a totally amateurish Board of Directors? The answer is obviously in the negative. The reason is that it is simply impossible for such an amateurish Board of Directors to spend too much time on the HA. Therefore, I hope that the Government can also note this situation and take it into consideration when reviewing such mode of operation.

In regard to the Department of Health, the policy address mentions that its laboratory facilities will be improved and its manpower be increased, so as to better control the spread of communicable diseases. But is the Government aware of the real problem? Having attended the Health Services Panel meeting on 12 October, I have the impression that the Government was completely muddled as regards the relationship between the control of communicable diseases and food safety, and the measure it has in mind was just half-baked. The behaviour of the Government shows that it regards the "killing" of the two Municipal Councils as the most important, and it has even told Members that the new policy bureau to be established in their place will certainly do a much better job. However, it has failed completely to say how the spread of communicable diseases will thus be put under better control, nor can it explain why it is so sure that the new policy bureau will certainly do a much better job. It seems that the Government does not even know how the spread of communicable diseases is to be controlled, and all it has proposed is that cases of communicable diseases related with food will be handled by the new policy bureau. Given such a division of responsibilities, if there are any outbreaks of communicable diseases in the future, the first thing which is sure to happen will be a dispute between the Department of Health and the new policy bureau on whether or not the communicable diseases concerned are induced by food. That being the case, much time will be wasted before the dispute can be settled. So I cannot see how the proposed arrangement can in any way work better than the existing mechanism.

Let me come back to the Enhanced Productivity Programme. The day before yesterday, Mr LAM Woon-kwong made out a statement that, "This is an order". However, let me just offer him a piece of advice, for an "order" cannot necessarily guarantee any productivity gain, I mean, genuine productivity gain. Having been so ordered, civil servants will certainly come back to the Secretary for the Civil Service later to report that the mission has been accomplished. After all, who will dare to report otherwise to the Secretary? Since "this is an order", who will dare to run the risk of being "beheaded"? I suppose some government departments, I mean, those which are notorious for their inefficiency, may well find it easy to meet the 5% enhancement target, or even a higher one, though I must hasten to add that they should have done so a long time ago. However, some other government departments may well find it impossible to do so, probably not so much because they are not good enough. That is why the Civil Service Bureau must put in place a clear-cut mechanism which can identify genuine productivity gain rather than attempts made by individual government departments to save money at the expense of service quality. These attempts are not genuine gains in productivity. Such a mechanism will also enable people to know whether reasonable decisions have been made to choose the areas for reduced expenditure and manpower cuts. In connection with this point, I wish to make a request here, and I hope that Mr LAM Woon-kwong can respond to it as well in his reply. My request is that all government departments must list out their Enhanced Productivity Programmes and their progress of implementation in their respective annual reports. It is only fair for me to make such a request because members of the public will then be able to assess whether there is any real productivity gain, and if yes, whether the enhanced productivity programmes concerned are effective enough. I think when we look at the reports from government departments, we must not allow ourselves to be satisfied so very easily with claims such as that genuine productivity gain has been achieved by deploying nine people to do the work which was once done by 10.

Finally, let me say a few words on the concluding remarks of Mr TUNG Chee-hwa's policy address. He says, "Images kept flashing through my mind of our fellow countrymen fighting the terrible floods ...... I feel enormous admiration for the spirit and courage of our fellow countrymen." Being also a man in government, how come Mr TUNG did not seek immediately to find out what had gone wrong with our country, to find out the inadequacies of the Central Government in terms of flood control? When I saw my fellow countrymen fighting the floods with nothing but sandbags, prepared to sacrifice themselves, I felt very differently from Mr TUNG. My feelings were one of immense grief. I never expected too much from Mr TUNG Chee-hwa's policy address, but little had I thought that the policy address could have failed to meet even my very low expectations.

With these remarks, Madam President, I support the amendment.

PRESIDENT (in Cantonese): Dr LUI Ming-wah.

DR LUI MING-WAH (in Cantonese): Madam President, the second policy address of the Chief Executive has been criticized by various political parties and interests groups in the community for failing to put forward any effective solutions in relieving the plight of the people and solving the unemployment problem. But we must realize that the economic difficulties faced by Hong Kong now are in fact symptoms of a long-term and chronic illness. The financial turmoil experienced by South East Asia recently is nothing but a fuse which has set off the bomb of our bubble economy at a slightly earlier stage. The outward relocation of our manufacturing industries and the rapid expansion of our service industries in the past decade or so have rocked the structural balance of our industries, thus leading the economy of Hong Kong to rely too excessively on service industries and domestic consumption. The fragility of this type of economy has been fully exposed by the recent financial turmoil. The effects of outside factors have plunged Hong Kong into a period of economic recession, our Gross Domestic Product (GDP) has seen a negative growth of 4%; our unemployment rate has shot up to 5%; and, our assets have depreciated drastically as our stock and property markets plummet. In such very difficult times, I think the Government of the Special Administrative Region (SAR) should, as a matter of top priority, look after the livelihood of the elderly, the weak and families in need, and it must also implement specific measures to revitalize the economy and create more jobs. That said, I must add that since Hong Kong is very much a service-oriented economy and its service industries are over-reliant on outside demands for their survival, we cannot expect the economy of Hong Kong to recover overnight. This is a point which the people of Hong Kong should bear in mind. Sooner or later, the difficult period will be over. However, in the meantime, we must reposition our economy so that we will be able to embrace our future with greater confidence.

On economic development, the Government needs to draw up long-term plans in addition to implementing measures to cope with existing difficulties. We are very pleased to learn that the Government is finally able to realize the inadequacies of our economic development and is thus taking steps to promote economic diversification and encourage the setting up of hi-tech and innovative enterprises. We know that the Government will build a science park at the cost of $3.3 billion, set up an Innovation and Technology Fund by injecting a fund of $5 billion and establish an Applied Science and Technology Research Institute to promote the commercial application of scientific research findings. We also know that the Government will stimulate the collaboration of academic institutions and industry in research and development, strengthen the links of our industrial sector to the technological institutes on the Mainland and consider measures to bring in technological professionals. These measures all come as a great encouragement to the industrial sector and will provide immense assistance in consolidating the economic foundation of Hong Kong. These are all forward-looking measures which deserve our commendation.

However, the Chief Executive has also mentioned in his policy address that the Government will seek to turn Hong Kong into a metropolitan city like New York in the United States and London in Europe, and the Government will also seek to consolidate our position as a cosmopolitan commercial city in the world. This is indeed a very grand vision and thus deserves our support. Yet, we must also note that in the next 50 years, Hong Kong and the Mainland will continue to be separated in terms of customs and immigration legislation. So the Government must be aware of the implications of such legislation. In the next 50 years, Hong Kong should still refrain from turning itself into a cosmopolitan economic entity because if it does so, its economy will continue to rely heavily on service industries. This will mean that our industrial structure will not undergo any substantial changes; our reliance on outside demands will only be increased and our economy will thus become more susceptible to external influences.

We have always maintained that Hong Kong should develop its own manufacturing industries because only industries are the real support of our economy. Therefore, in order to revitalize local manufacturing industries, the Government of Hong Kong should set up an industrial technology council to promote the development of industrial technology, formulate industrial policies and manage research institutes, the Innovation and Technology Fund and the like. The Government should provide low-priced lands or factory plants and offer tax concessions to high-tech industries, so as to encourage Hong Kong enterprises to engage in the production of high-tech and high-value added goods. In addition, the Government should offer preferential terms to overseas investors who want to set up their production lines in Hong Kong, so as to promote product diversification and upgrading.

Another point which should be mentioned is that most of our manufacturing industries, especially the processing industries which require intensive labour input, have already shifted northward to the Mainland. These industries are in dire need of government support because if they are to escape from the fate of eventual extinction, they must receive help in maintaining their competitiveness through continuous improvements in technologies, product quality and management. In particular, the laws and regulations of the Mainland and its sometimes irregular enforcement practices have posed a great deal of serious problems to those Hong Kong manufacturers who run their enterprises there. I hope that the SAR Government can pay attention to the difficulties faced by these Hong Kong manufacturers and provide them with the assistance required.

To sum up, if the Government wishes that our economy could move "from adversity to opportunity", it must set down the right directions, and in this connection, high-tech industries will certainly provide a strong impetus, for only the development of high-tech industries will enable our economy to move from "adversity to safety". I hope the Chief Executive will consider this point very seriously.

Madam President, the second policy address of the Chief Executive has set down the right directions and proposed measures for the long-term economic development of Hong Kong. For this reason, I would support the motion moved by Dr LEONG Che-hung, and wish to thank the Chief Executive for delivering his policy address.

PRESIDENT (in Cantonese): Mr MA Fung-kwok.

MR MA FUNG-KWOK (in Cantonese): Madam President, the economy of Hong Kong has experienced unprecedented changes over the past one year. The financial turmoil has plunged our economy into a period of recession characterized by the plummeting of the stock and property markets, the shrinking of people's assets and a drastic reduction of consumption desire. As all trades and businesses are caught in the midst of difficulties, the unemployment rate keeps going up and our quality of living keeps going down. Given this situation, it is only natural that all of us would expect the Chief Executive, Mr TUNG Chee-hwa, to draw up some measures in his second policy address, so as to deliver the community from their acute economic hardship.

"From adversity to opportunity" is not only the hope of the Chief Executive and the Government of Special Administrative Region (SAR); it is also the hope of the entire community. That said, we should all realize that it is indeed impossible for us to come up with any talisman which can reverse the situation overnight. Hong Kong simply cannot travel back in time and retain the prosperity which it enjoyed a year ago. Actually, as we all know, in a market economy, the government cannot, and simply should not, lightly tamper with the tempo and trends of economic activities. What I am driving at is that the sluggish economy cannot possibly be improved overnight. As for the problem of unemployment, the present economic recession is just the immediate cause, and the most important cause is in fact our own economic restructuring. And, even so, the Government has still put in place quite a number of measures to ease the gravity of the situation over the past one year. However, for as long as the economy of Hong Kong does not improve, how much can these short-term measures help?

At present, the only thing that the Government can do is to approach the problems by looking at the long run. It should make determined efforts to adjust the structure of our economy, so as to maintain our competitiveness. In this connection, it should be pointed out fairly that the second policy address of the SAR Government does indeed aim precisely to work pragmatically on the long-term development strategies for Hong Kong. At a time when we are caught in the midst of economic difficulties, and when all people are looking anxiously to him with high expectations, the Chief Executive still remains committed to the long-term development strategies set down in his first policy address, namely, the development of innovations and technology and information technology, the emphasis on quality education and the determination to revitalize local industries. Although he cannot thus please the public and political parties for the moment, his commitments are still praiseworthy.

Television and telecommunication

Madam President, the Chief Executive says in his policy address that the development of information technology is essential to the maintenance of our competitiveness and the promotion of our economic development. I agree very much. Early this year, the SAR Government set up the Information Technology and Broadcasting Bureau in a bid to centralize the work relating to information technology. This will no doubt help the development of information technology to a certain extent. However, I must add that this should only be regarded as the first step. I hope that the Government will proceed with a faster pace by encouraging as many people as possible to speak up and by collaborating fully with different sectors in the community, so as to boost the work of turning Hong Kong into a city of information technology.

The Government has recently completed the consultation exercise on the development of the telecommunication and television industries. In this connection, I am pleased to learn from the policy address that in trying to implement market liberalization, the Government is committed to creating a level playing field for these two industries, so as to attract more investors and enable consumers to benefit truly from a liberalized market. However, I must hasten to add that what the Government has done over the past one year to enforce fair competition does seem rather ridiculous, because operators found to have violated the rules of fair competition were each fined a mere several ten thousand dollars only. I must therefore emphasize that while seeking to bring in market liberalization, the Government should also make sure that all new operators are always required to shoulder their respective commitment to the television and telecommunication industries of Hong Kong.

Another point worth mentioning is that the liberalization of the television market does not cover the sector of non-subscription television. Although the results of the technical tests for digital television will not be known for quite some time to come, and although it is thus impossible to increase the number of non-subscription television channels at this stage due to the technical constraints imposed by atmospheric radio waves, we should note that non-subscription television can still be broadcast through landed networks. In addition, we can also bring in more operators by liberalizing the channels used by the existing two terrestrial television operators during some specific time slots. We should not wait until the results of digital television tests are available before we consider the liberalization of the non-subscription television market. The Government should bring in competition as soon as possible, so as to enable the public to enjoy better television services.

The liberalization of the television and telecommunication markets, and, more importantly, the intention of the Government to lift the current restriction regarding "disqualified persons", may well produce far-reaching impacts on related trades and occupations. This is especially the case for some industries which require creativity, such as phonographic production, film/video production and advertising. We should put in place measures to make sure that producers of all kinds can all have access to broadcasting channels. That way, we can make sure that Hong Kong can become a centre of broadcasting, information dissemination and multimedia entertainment. The liberalization of terrestrial television channels during some specific time slots can serve precisely this purpose.

When it comes to creative industries, I wish to discuss the film industry in particular. Last year, the SAR Government promised to assist the development of this industry by providing lands for film production and by improving its production environment. This year, the policy address further proposes to set up a $100 million Film Development Fund for the purpose of enhancing the professional and technological capabilities of the film industry. The sum is not too big, I must say, but as a member of the industry, I am certainly encouraged by such a move.

That said, I still want to point out that what the local film industry needs most badly now are good script-writers, good directors, good actors and actresses, creative talents, originality and a healthy market. Advanced technology and special effects will of course help improve a film in terms of production standards and quality. However, the most important ingredients of a successful film should still be its originality and creativity. That is why when we seek to improve the quality of local films and widen their scope of development, we must give top priority to the training up of more creative talents and to the exploration of a much wider range of plots and subject matters. Besides, the SAR Government should also assist the film industry in expanding its market, particularly the Mainland, so that investors can get reasonable returns. That way, they will be induced to make further investments, thus triggering off a healthy cycle of investments and re-investments. The film industry does not have any doubt about the determination of the SAR Government to assist in its development, but the industry also hopes that the SAR Government will actively solicit its views when formulating the relevant policies. In the case of the Film Development Fund, for example, the film industry should be allowed to play a role and air their views, so that the Fund can be used appropriately to cater for the needs of the industry.

The policy address also points out that if Hong Kong is to become an innovation centre, we must respect and protect intellectual property rights. For this reason, the Chief Executive undertakes to commit additional resources to combating illegal activities in this respect and to further increase the efforts to educate the public. I agree that all this is necessary.


Madam President, the section on education in the policy address does not contain anything particularly encouraging on the whole. However, we should still appreciate the good intent of the Government, for it has not proposed any reductions of educational expenses even at this very time of economic downturn. Having said that, I must hasten to add that our educational authorities are in fact in urgent need of reforms. Though we are now very much tortured by the effects of economic adjustment, we must still seek to make sure that the quality of our manpower will always be able to help sustain our development in the future. For this reason, we should apply the concept of sustainable development to the field of education and formulate a policy which can train up our future generations as creative and cultured individuals who are capable of decision-making and self-development. That way, we will be able to have a much bigger competitive edge.

District organizations

I now wish to discuss the issues of culture and arts, but in doing so, I must first express my views about the review on district organizations. It cannot be denied that there is now indeed an overlapping of functions among different authorities with respect to the formulation of policies on food safety, environmental hygiene, culture and arts. This has led to poor resource utilization, inefficient service delivery, ambiguous accountability and many other problems. That is why we really need to streamline the existing framework and revise the existing functions of district organizations, so as to achieve the desired professional targets, particularly those relating to culture and arts. I think most people from the culture and arts circles, and even those from the sports field, will agree that the dismantling of the two Municipal Councils and the adoption of new arrangements will probably enable us to improve the hitherto confined and restricted environment enveloping our cultural, arts and sports developments. However, people from these fields also hope that the Government can at the same time formulate a long-term cultural policy to give our arts and culture more room of development. In conducting its review of district organizations, the Government must allow public participation, and it must make sure that a proper balance is struck between effective utilization of resources and the needs of long-term development.

As long as the new framework can meet the requirements of professional representation and effective utilization of resources; as long as the views of the public are fully respected; and, as long as the legislature can play an appropriate supervisory role, I do not think that the dismantling of the two Municipal Councils is in any way an undemocratic move. I very much hope that when considering this issue, the various political parties can be guided by the interests of the community as a whole. I also hope that they can put forward sensible opinions and suggestions in the course of the relevant discussions, so as to make sure that the new framework thus designed can meet the highest standards in terms of professionalism, efficiency, transparency and well-defined supervision.


Madam President, some critics, when talking about the plummeting of the property market and the current economic downturn, say that the major culprit is the 85 000-unit housing construction target formulated by the Chief Executive last year. However, I think the real culprit should be the policy of high land prices upheld in the past. This policy had gradually led to an over-reliance of our economy on the property market and financial services. As a result, private property is no longer regarded as simply a necessity, but also as a means of investment and even speculation. This explains the rocketing of property prices until quite recently. When the economic bubble thus formed burst upon the onslaught of the Asian financial turmoil, we were plunged into the difficulties that we are facing now.

That the property market has plummeted instead of making a soft landing has not only affected the economy, but also hit most people in Hong Kong, either directly or indirectly. Most unfortunately, the financial turmoil has led to the emergence of a group of so-called "miserable property owners" whose plight is indeed very pitiable, and the impact sustained by local banks as a result is something which all of us do not want to see. From another angle, however, it should be pointed out that the lowering of property prices to levels affordable by the general public is in fact very much in line with the hope of many people in the community. That is why I am of the view that following the recent plummeting of property prices, we must seek to stabilize them, to contain them at the existing levels.

Madam President, I hope the Government will reconsider its target of enabling 70% of our population to buy their own homes within the next 10 years. This may perhaps be a well-intentioned target. However, if the Government seeks to achieve this target at all costs, even by resorting to various administrative measures as a means of boosting demand, we must then consider how much the public should pay to buy their own homes. Is it really worthwhile for a man to buy an apartment measuring just a few hundred square feet and then spend half of his income every month, in his whole life, on paying up the mortgage loan?

The housing policy of the SAR Government in the past one year can be described as all in a mess, one example being its land sale policy. Earlier on, it put huge quantities of lands on auction without any regard for prices, and as a result, the general public and property developers all lost their confidence in the prospects of the property market. At present, however, in a bid to stabilize property prices, it has put a moratorium on land sale. We can of course appreciate that this is just an emergency measure, and we can also see the rationale behind it. However, we must bear in mind that if the suspension of land auctions continues, the supply of private housing will inevitably drop drastically two years later. When this happens, will property prices rocket again by that time? Therefore, as the main supplier of lands in Hong Kong, the Government must monitor the situation closely and make appropriate adjustments. In order to maintain the stability of the property market, it should consider the possibility of resuming land auctions next year. And, the quantities of land supply should be based on market demand.

Besides, with respect to the public sector housing policy of the SAR Government, we also notice inconsistencies and confusion in a number of areas such as the sale of public housing units, means cum assets tests and the various schemes concerning HOS housing, sandwich class housing, home purchase and home-starter loans. We hope that the Government will set up a really competent committee, so that long-term housing policies can be formulated on the basis of improving people's housing quality. It is also hoped that such a committee can step up the work of co-ordination and seek to make sure that there is always consistency and adequate co-ordination among the relevant Policy Bureaux, departments responsible for policy execution, the Housing Authority and the Housing Society when they implement their own policies.

Madam President, in the last part of his policy address, the Chief Executive refers to the spirit and courage of those mainland officials and people who fought against the floods, trying to inspire the people of Hong Kong to show the same spirit of solidarity and overcome their difficulties during the period of economic adjustments. The problem of floods has plagued the Mainland for many years, and many people think that while it is important to fight against the floods when they come, it is even more important to eradicate the flooding problem altogether. Similarly, I am sure that the Chief Executive has written this policy address with the pragmatic approach of trying to eradicate the problem of economic imbalance faced by Hong Kong, which is why quite a number of measures aimed at maintaining our future competitiveness and promoting our long-term development are set out in the policy address.

At this meeting today, many Honourable colleagues have criticized the policy address for the relatively scant attention it pays to measures which can provide immediate relief to the people's hardship, and some colleagues have even moved amendments to the original Motion of Thanks. I wish to point out here that no matter how we think about the contents of the policy address, we should still thank the Chief Executive as a matter of courtesy.

With these remarks, I support the original motion moved by Dr LEONG Che-hung. Thank you.


PRESIDENT (in Cantonese): I now suspend the meeting until 2.30 pm tomorrow.

Suspended accordingly at half-past Eight o'clock.