LC Paper No. AS 67/98-99

Ref: AM 15/01/01 (VIII)

Subcommittee on
Review of Allowances for Members of the Legislative Council

Minutes of Meeting held on
Wednesday, 29 July 1998 at 11:00 am
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 Christine LOH
Hon Bernard CHAN
Hon WONG Yung-kan
Hon Howard YOUNG, JP
Hon Ambrose LAU Hon Chuen, JP

Clerk in attendance :

Mr Joseph KWONG
Principal Assistant Secretary (Administration) (Acting)

Staff in attendance :

Mr Ricky FUNG
Secretary General

Mrs Queenie YU
Senior Assistant Secretary (Administration) (2)

I. Confirmation of Minutes of the Last Meeting

Minutes of the meeting held on 24 July 1998 were confirmed.

II. Financial Arrangement for Reimbursement of Operating and Setting Up Expenses
LC Paper No. AS 48/98-99

2. Mr Joseph Kwong briefly outlined the proposal of providing an advance of operating funds to facilitate Members to finance their daily office expenses (at a ceiling equivalent to two months' operating expenses, i.e. $225,000) and setting up expenses ($100,000 for setting up district office(s) and $50,000 for setting up the office provided within Council premises) as set out in LC Paper No. AS 48/98-99. He said that subject to the Subcommittee's views and the endorsement of the House Committee on 4 September 1998, the proposal would be submitted for the consideration of The Legislative Council Commission at its next meeting to be held on 10 September 1998. If the proposal met with the approval of the Commission, Members would be invited to apply for the advance amount needed within the approved ceiling. Mr Joseph Kwong anticipated that advance payment could be effected within one week upon receipt of Members' applications. Members supported the proposal and considered it fair that the advance should be made upon application as not all Members might require the facility.

3. Miss Christine Loh said that she had been relying on a bank loan, for which interest was levied, to finance her office expenses before she obtained the reimbursement. She asked whether such interest expenses would be reimbursable, as they were incurred in relation to the performance of LegCo duties. Mr Joseph Kwong said that interest payment was not within the list of approved expenses that could be paid out of the subvention obtained from the Government. Whilst agreeing that Miss Loh's request was not unreasonable, members generally opined that it might not be worth pursuing in view of the small amount involved and the complications that might arise, e.g. how to handle situations where different interest rates were charged by different financial institutions, whether Members using their own funds or borrowing from their relatives and friends should be allowed claims for loss of interest income, whether deductions should be made to the interest earned by Members from the operating fund advanced to them, etc.

4. Commenting on Miss Loh's further suggestion that Members might keep a separate bank account for their LegCo related advances and payments so that any interest income or expense could be clearly accounted for, members said that this might cause inconvenience to Members as payments were usually effected by various means (e.g. personal credit card, cheque, cash), it would be administratively complicated to route all and only LegCo business related expenses through a dedicated account.

Setting Up Allowance

5. At present, LegCo Members were provided with separate one-off allowances in the amounts of $100,000 and $50,000 respectively for setting up their district office(s) and equipping a central office provided by the Secretariat. Miss Christine Loh said that the setting up allowance of $50,000 for the central office was insufficient for equipping a complement of four staff members with the necessary computer hardware and software. She suggested that Members be allowed greater flexibility in expending the setting up allowances, e.g. allowance designated for district offices could be used for equipping the central office. In the light of rapid development in information technology, Miss Christine Loh said that computers and software became obsolete and had to be replaced every two or three years. Additional funds should also be provided for their replacement. Mr Joseph Kwong explained that although the two setting up allowances were independent and could not be mixed at present, there were no restrictions barring equipment bought for one office with one allowance to be transferred for use in another office if the need so arose. Mr Howard Young also pointed out that furniture and equipment could be purchased with the monthly operating expenses reimbursement. The Chairman remarked that some Members might have already used up their monthly operating expenses reimbursement for paying staff and other daily expenses, leaving very little spare resources for acquiring furniture and equipment. She suggested and members agreed that the Administration should be invited to review the existing level of operating expenses reimbursement and other allowances provided to Members.

Entertainment and Travelling

6. Referring to the accountable component of $7,030 in the monthly operating expenses reimbursement provided for Members to meet entertainment and travelling expenses, Miss Christine Loh proposed that if a Member so preferred, he/she should be allowed to use the money for the employment of staff. Mr Ng Leung-sing expressed concern that this might generate calls for flexibility in the use of the staff and office expenses component of $84,380 on entertainment. Members generally felt that the entertainment and travelling component could be used to supplement the staff and office expenses component but not vice versa.

7. Ms Cyd Ho observed that whilst the $14,060 under the entertainment and travelling component was generally sufficient in meeting local travelling and modest entertainment expenses, it would not be sufficient in the event of a Member having to make overseas duty visits. The Chairman explained that in accordance with the existing practice, costs for overseas duty visits arranged in the name of the Council/committees of the Council were paid by the Commission. Members paying personal overseas visits in their Member's capacity would invariably be required to bear the costs which exceeded the reimbursement ceiling. Members generally considered that it was not necessary to change the existing system or raise the reimbursable ceiling to cater for overseas travelling, because such visits occurred at irregular intervals and their expenses were highly variable.

III. Letter from the Association of Assistants to Legislative Councillors of Hong Kong

8. The Chairman invited members' views on the various points raised by the Association of Assistants to Legislative Councillors of Hong Kong as set out in its letter to the Subcommittee tabled at the meeting (Appendix I).

9. On the Association's suggestion that a certain portion of Members' operating expenses reimbursement be designated for the employment of staff, members considered that Members should be given the flexibility in their office operation, particularly in determining the number and type of staff required as well as their level of remuneration.

10. Members were not supportive of the Association's proposal that directly elected Members should be provided with more financial support. They opined that all Members should be accorded equal treatment irrespective of the channel through which they were elected.

11. Members noted the Association's concern that some Members might have overlooked the legal requirement to provide insurance coverage for their employees as stipulated under the Employment Ordinance. They suggested that the Secretariat should, through issuance of the reimbursement guide, draw Members' attention to their legal obligations. As regards how and what form of fringe benefits should be provided to Members' assistants, it would be better for the employer and employee to negotiate a mutually acceptable remuneration package.

IV. Allocation of Members' Offices in Housing Estates

12. The information note provided by the Housing Authority concerning allocation and application procedures for LegCo Member's offices at public housing estates was tabled at the meeting (Appendix II). Members considered the allocation policy, in particular the space entitlement (70 M2), outdated and too restrictive. They pointed out that the size of certain geographical constituencies had increased to a million or more people and the corresponding area increased by three to four folds, the restriction that a Member could only lease two offices in public housing estates should be reviewed. Members agreed that the matter should be taken up with the Administration.

V. Name of the Subcommittee

13. Members found the term "allowance" misleading, as the public might think that the allowance was one form of income for Members. A more appropriate term, such as "operating expenses reimbursement" should be used to reflect correctly the purpose of the financial resources provided to Members. It was also suggested that the name of the subcommittee should be changed to "Subcommittee on Matters Related to the Reimbursement of Members' Operating Expenses".

VI. Date of Next Meeting

14. Members agreed to meet on 17 September 1998 at 2:30 pm. The Director of Administration and the Director of Housing would be invited to attend the meeting to discuss the following issues -

  1. level of operating expenses reimbursement for LegCo Members; and

  2. allocation of LegCo Member's offices in public housing estates.

VII. Adjournment of Meeting

15. The meeting ended at 12:30 pm.

Legislative Council Secretariat
August 1998