LC Paper No. AS 315/98-99
(These minutes have been
seen by the Administration)

Ref: AM 15/01/01 (IX)

Subcommittee on
Review of Operating Expenses for Members of the Legislative Council

Minutes of Meeting held on
Thursday, 1 April 1999 at 2:30 pm
in Conference Room B of the Legislative Council Building

Members Present :

Hon Emily LAU Wai-hing, JP (Chairman)
Hon YEUNG Yiu-chung (Deputy Chairman)
Hon Cyd HO Sau-lan
Hon Fred LI Wah-ming
Hon NG Leung-sing
Hon Ambrose LAU Hon Chuen, JP

Members Absent :

Hon Christine LOH
Hon Bernard CHAN
Hon WONG Yung-kan
Hon Howard YOUNG, JP

Public Officers Attending :

Mrs Carrie YAU
Director of Administration

Ms Miranda CHIU
Deputy Director of Administration

Mr Jacky LUM
Assistant Director of Administration

Clerk in attendance :

Mrs Angela LEE
Principal Assistant Secretary (Administration)

Staff in attendance :

Mr Ricky FUNG
Secretary General

Mr Joseph KWONG

I. Proper Description of the Reimbursements to Members

Referring to the Administration's proposal to revise the reimbursement package for Members' operating expenses, the Chairman pointed out that the term "allowance" used in the proposal was inappropriate. It gave a wrong impression to the public that the money was part of the Members' remuneration. Mrs Carrie Yau agreed to adopt the term "reimbursement" as being used by Members.

II. Proposal

2. Mrs Carrie Yau briefly introduced the Administration's proposal and explained the rationale behind: As Hong Kong was compact, communications systems well developed and transport convenient, the Administration saw little need for Members to have more offices. In particular, Members could only be in one office at any one time. Therefore, instead of higher reimbursement ceilings, they proposed more flexibility by combining the present general expenses reimbursement (which covered staff expenses as well) with the district office expenses reimbursement. Regarding the reimbursement for entertainment and travelling expenses, it was proposed that there would be no need for receipts to be produced to minimize administrative cost. It was also proposed that the setting up expenses reimbursement for the central office provided by the LegCo Secretariat be combined with that for district offices. A $100,000 reimbursement for information technology and communication equipment for each Member in each LegCo term was also proposed, subject to certain conditions detailed in the paper.

Impact of the Present Economic Downturn on Members' Operating Expenses

3. Mr Fred Li questioned the validity of para 4(a) in the Administration's proposal. No rental reduction was granted by the Housing Authority for his district office despite varying degrees of reduction enjoyed by other shops in the same estate. Therefore, the statement that "costs incurred in running offices should have come down" was untrue. Ms Miranda Chiu responded that enquiries with the Housing Department revealed that in reconsidering the rental rate for each tenant, the Housing Authority took into account factors such as the business prospects for the tenant, location of the premises and volume of pedestrian flow. As Members were not operating on a commercial basis, and Members' reimbursable ceilings had not been reduced, the rental rates for Members' offices were not revised. Mrs Carrie Yau agreed to take up the rental issue with the Housing Authority.

4. The Chairman supported Mr Fred Li's comment. At the invitation of the Chairman, Mr Joseph Kwong said that he was not aware of any rental or salary reductions. He added that rental rates were fixed by agreements, and salaries offered to new staff could not be compared straightly with those paid to staff who had left, because the duties and workload could be different. Mrs Carrie Yau agreed that it might be more appropriate to say that the expenses "would not increase". To set the record straight, Mr Ricky Fung agreed to provide statistics on Members' expenses for the Administration's consideration.

No. of District Offices Needed

5. Regarding the assumption that Members could not be present in more than one office at any one time, Mr Fred Li doubted whether the Administration understood the way Members operated. He said that between Members' visits to their district offices, the latter were manned by staff. The public preferred face to face discussion to communication by fax or email. He did not expect members of the public would have the equipment for video-conferencing. Even if this new channel were feasible, it would not divert the existing type of complainants to the new channel. On the other hand, it might attract a new segment of the public to seek Members' assistance. Mr Ng Leung-sing remarked that even in the business sector, seldom was there any video conferencing among local offices themselves. The Chairman also commented that as traffic expenses were high, most people preferred to meet a Member in their own district even if it would mean waiting for a longer time before voicing their grievances. Miss Cyd Ho also added that the Administration had ignored the enlarged population size in each geographic constituency and the consequential increase in cases to be handled. On the issue of video conferencing, she pointed out that before the public could use such modern equipment at a Member's office, there should be a conveniently located ward office first.

Staff Employed with the Travelling and Entertainment Expenses Reimbursement

6. The Chairman alerted the meeting that as the travelling and entertainment expenses reimbursement had not been proposed to be merged with the general expenses reimbursement, Members who used this reimbursement for employing staff would have to bear the related severance pay, because only severance payments related to staff employed with the general expenses reimbursement were reimbursable. Mr Yeung Yiu-chung suggested that instead of using the whole reimbursement amount for monthly salaries, a certain amount could be set aside for future severance payments. Miss Cyd Ho, however, requested the Administration to reconsider whether the travelling and entertainment reimbursement could be merged with the general expenses reimbursement, so that if the amount was really used for employing staff, future severance pay could also be reimbursed. She added that doing so would only involve an additional commitment of approximately $10,000 each year for each Member. Mr Yeung Yiu-chung cautioned that it might not be too appropriate if the whole amount was completely merged with the general expenses reimbursement, because it might imply that a Member could use the whole merged amount on entertainment, which, under the new proposal, would be non-accountable. As an alternative, members suggested that one might choose to merge a portion of it with the general expenses reimbursement, leaving a small portion for non-accountable travelling and entertainment expenses.

Information Technology and Communication Equipment Reimbursement

7. Mrs Carrie Yau stressed that the proposed new reimbursement was for communication purposes only, therefore it should not be used for other purposes, such as furnishing.

8. Miss Cyd Ho expressed her concern that Members might have reached the quantity limit under the present reimbursement guidelines. Therefore, they could not purchase more IT or communication equipment. Mrs Angela Lee reassured Members that the quantity limit would be modified in view of the new reimbursement.

9. In response to Miss Cyd Ho's inquiry, Mrs Carrie Yau confirmed that consultancy fees for setting up a Member's website could be reimbursed under this new item.

10. Mr Ng Leung-sing proposed that the new reimbursable amount could be spread throughout a LegCo term as a recurrent item. Mrs Angela Lee also suggested that it could be combined with the setting up expenses reimbursement.

Reconsideration by the Independent Commission and Implementation

11. At the suggestion of the Chairman, Mrs Carrie Yau agreed to reflect Members' views and suggestions to the Independent Commission on Remuneration for Members of the Executive Council and the Legislature of the HKSAR. The meeting was also informed that since merging of several reimbursable items would be involved, Finance Committee's approval would be needed before a finalized proposal could take effect. Realizing that the approval process would take some time and the current LegCo term would end in June 2000, Mrs Carrie Yau agreed to present a new proposal to the Subcommittee as soon as possible after consulting the Independent Commission.

III. Financial Provisions for Staff's On-costs

12. As the "Breakdown of calculation of staff cost" provided by the Administration (Appendix I as tabled) only mentioned the provision of mid-point salaries to cover staff costs, the Chairman inquired whether the present general expenses reimbursement had included financial provisions for staff medical, insurance and retirement benefits as initially suggested in a 1993 Finance Committee paper. Ms Miranda Chiu explained that the present system was laid down by FCR(95-96)44, consequent to a survey in 1995 on Members' actual expenditure. The revised basis reflected the then actual staff costs and was approved by the Finance Committee. As the matter involved detailed reference to documents since 1993, the Chairman requested Mr Ricky Fung to verify the change in the basis for calculating staff costs.

[Post-meeting note: According to Enclosure 2 to FCR(93-94)28, the mid-point salaries were used to give a notional provision for salaries and standard fringe benefits for Members' staff.]


13. The meeting ended at 3:35 pm.

Legislative Council Secretariat
May 1999