FINANCE COMMITTEE

Minutes of the proceedings of the Meeting held on
12 April 1996 at 2:30 p.m. in the Legislative Council Chamber

Present:

Absent:

In attendance for specific items:

Mr B J C WOODROFFE, ISO, JP	Commissioner of Rating and Valuation
Mr W R W SPENCER	Principal Valuation Surveyor
Mr Alan SIU	Principal Assistant Secretary for the Treasury
Mr Trevor KEEN	Principal Assistant Secretary for Planning, Environment and Lands
Mr Stephen MAK, JP	Assistant Director of Information Technology Services
Mr Ian STRACHAN, JP	Director of Social Welfare
Miss Margaret TANG	Chief Social Security Officer, Social Welfare Department
Mr Stephen CHAN	Senior Statistician, Social Welfare Department
Mr Y C CHENG	Principal Assistant Secretary for Health and Welfare
Mr Paul TANG	Director of Administration

In attendance:

Mr Alan LAI, JP	Secretary for the Treasury (Acting)
Mr Kevin HO, JP	Deputy Secretary for the Treasury
Miss Pauline NG	Clerk to the Finance Committee
Mrs Constance LI	Chief Assistant Secretary (Finance Committee)

Item No. 1 - FCR(96-97)1

RECOMMENDATIONS OF THE PUBLIC WORKS SUBCOMMITTEE ON NON-AIRPORT CORE PROGRAMME

The Committee approved this item.

Item No. 2 - FCR(96-97)2

CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Rating and Valuation Department
New Subhead Annex III Rent Computer System
HEAD 162 - RATING AND VALUATION DEPARTMENT
Subhead 001 Salaries

2. In response to a members query as to why the proposal was not submitted to the Committee sooner so that more time would be available for developing the computer system, the Commissioner of Rating and Valuation (CR&V) explained that it had taken time to resolve the technical issues and to prepare the necessary legislation to lay down the principal mechanics for the assessment of rateable values and the collection of the Annex III Rent. He assured members that preparatory work was progressing well and he was confident that the system would be completed on schedule. The Chinese Government had all along been kept informed of the developments in this regard.

3. In reply to a member, CR&V advised that the Government rent of 3% would be based on the rateable value of the properties concerned as at the date of demand, i.e. 28 June or 1 July 1997, depending on the expiry date of the non-renewable leases. The rateable value would be adjusted in the course of the normal re-valuation exercises.

4. Referring to the Administrations clarification that the 91 non-directorate posts required for developing the system would be permanent posts to be created under the establishment of the Rating and Valuation Department (RVD), members asked in what way these posts would lapse after 15 months, as mentioned in the paper, and whether this would give rise to the need for recompensing the affected staff upon the deletion of posts. A member also enquired if it was more appropriate to create supernumerary posts and appoint temporary staff instead.

5. In response, CR&V explained that the 91 additional staff should have the necessary technical knowledge and experience to carry out the work. Although the posts would no longer be required after 15 months, the staff could be re-deployed to fill vacancies in the RVD arising from the increase in workload and natural wastage. No redundancy problem was therefore envisaged. The Secretary for the Treasury (S for Tsy) added that the present proposal was to seek an increase in the ceiling of the total notional annual mid-point salary of the non-directorate posts in the permanent establishment of R&VD only for the year of 1996-97. Any subsequent requirements after 1996-97 for the retention or creation of posts to cope with new or increased work would have to be justified through the normal mechanism.

6. Responding to a members question on the on-costs for the additional staffing requirements, S for Tsy agreed to provide the information in writing.

7. The Committee approved this item.

Item No. 3 - FCR(96-97)3

HEAD 170 - SOCIAL WELFARE DEPARTMENT
Subhead 179 Comprehensive social security assistance scheme

8. Members were generally in support of the proposed improvements to the Comprehensive Social Security Assistance Scheme (CSSA) which were to take retrospective effect from 1 April 1996.

9. Regarding the special grant for school-related expenses, some members raised queries on the higher rates for kindergarten and lower secondary students. In reply, the Director of Social Welfare (DSW) explained that the proposed rates were flat rates calculated according to the actual claims from CSSA recipients in previous years. Such expenses covered selected items including books, stationery, school uniforms, printing and copying, graduation fees, school activities and dental expenses. The reasons for the difference were mainly due to higher school-related expenses at kindergartens and lower secondary levels for the purchase of more books and school uniforms. He agreed to provide the Committee with further information in this respect.

10. On the impact of the proposed flat rates for school-related expenses on CSSA recipients, DSW advised that under the new arrangements, applicants would not be required to produce receipts if their claims did not exceed the flat rates. It was anticipated that 90% of the recipients would benefit from the new arrangements because they would not be claiming more than the flat rates. As for the remaining 10% whose claims were likely to exceed the flat rates, they would be required to justify their claims with bills and receipts. DSW assured members that recipients would be advised of the new procedures and would be reminded to retain receipts for claiming higher grants.

11. Referring to the procedures for the new special grant to the elderly for social and recreational activities, DSW advised that it was the intention to obviate the need for the production of receipts. The preliminary thinking was to request the applicants to give an undertaking that the grant would be spent for the purpose. The Department was still fine-tuning the procedures and would brief the Panel on the detailed arrangements in due course. Members welcomed the streamlining of procedures, but enquired if the description of payable on a reimbursement basis referring to the grant would bar the Administration from adopting the simplified approach. In response, S for Tsy said that the proposal to make this grant on a reimbursement basis in the FCai was in line with the CSSA review recommendation to reimburse the elderly for the fees of taking part in recreational and social activities. It would be a matter for DSW at the operational level to draw up procedural arrangements that would meet the ordinary meaning of reimbursement. He noted that SWD would brief the relevant Panel on the procedures and suggested that the issue should best be pursued in that forum. The Chairman advised members to consider the proposal as stated in the paper and discuss the implementation details at the relevant Panel.

12. On the question of whether disabled persons should also be eligible for a special grant for social and recreational activities presently proposed for the elderly, DSW advised that the present package included improvements for disabled persons living with the family. The Chairman advised that the policy issues could be followed up by the Panel concerned.

13. Replying to a member, DSW confirmed that adults in ill-health included those who were chronically ill. He further advised that the Government would be prepared to consider claims for treatment by traditional Chinese medicine practitioners when the relevant regulating and registration systems had been put in place. He also took note of the members suggestion that a more human approach should be adopted in determining the food components for a healthy diet for the purpose of calculating the standard rate for the elderly.

14. The item was voted on and approved.

Item No. 4 - FCR(96-97)4

HEAD 112 - LEGISLATIVE COUNCIL COMMISSION
Subhead 366 Remuneration and reimbursements for Members of the Legislative Council
Subhead 872 Setting up and winding up allowances for Members of the Legislative Council

15. Members were generally in support of the proposal. On the principles and implementation of the proposals, members sought the following clarifications from the Administration:-

whether previously appointed members who were elected to the present LegCo in September 1995 would also be eligible to claim up to 50% of the setting up allowance for office renovation;
whether a member could claim up to 50% of the setting up allowance for the removal, expansion or renovation of more than one office ;
whether the setting up allowance at paragraph 2(b) would have retrospective effect to cover also those offices opened in the current term but prior to Finance Committees approval of the present proposal;
whether claims for the setting up allowance should be made strictly on a one-off basis and what arrangements were available for offices set up by members at different times during a term; and
on what basis did the Administration come up with the ceiling of $180,000 for winding-up allowance to staff employed by members for less than two years.

16. The Director of Administration (D of Admin) responded as follows:-

all members who served on LegCo previously would be entitled to the same treatment regardless of whether they were appointed or elected in the previous term;
members should be able to use the setting up allowance for the removal, expansion or renovation of more than one office provided that the ceiling of $50,000 was not exceeded;
the setting up allowance could be used to cover more than one members office subject to the ceiling not exceeded. As the proposal not to restrict the number of members district offices was made after the commencement of the current term, it would be reasonable for members to claim the allowance retrospectively, and at different times, to cover offices opened during the current term, including those opened prior to Finance Committees approval of the proposal;
while members could claim the setting up allowance at different times during the current term as in paragraph 16(c) above, the Commission on Remuneration for members of the Legislative Council (the Commission) would be asked to review whether the one-off arrangement should apply for future LegCo terms; and

the ceiling for the winding-up allowance was worked out on the basis of the recommendation of the Commission in its Report in June 1995. The D of Admin undertook to provide members with the relevant information.

17. A member pointed out that the present ceiling of $180,000 for winding-up allowance was inadequate to meet members statutory and contractual obligations and other related expenses, and the matter would have to be further discussed by the LegCo Subcommittee on Review of Allowances for members of the Legislative Council (the Subcommittee) on 26 April 1996. In response, D of Admin clarified that under the existing Employment Ordinance, employees with less than two years service would not be eligible for severance payments. The present proposal was made on the recommendation of the Subcommittee and the Commission that severance payments should also be paid to those employees of less than two years service on a pro-rata basis. In accordance with the Employment Ordinance, the maximum payment was to be calculated at the rate of two thirds of the employees last month salary, or two-thirds of the wage limit under the Employment Ordinance for the purpose of calculating severance payment, i.e. $22,500, whichever was the less.

18. In response to a members query, D of Admin agreed to consider using more appropriate terms to refer to members who were elected from geographical constituencies and those from functional constituencies.

19. The proposal was voted on and approved.

20. The Committee was adjourned at 4:00 p.m.

Legislative Council Secretariat
10 May 1996

Last Updated on 27 November 1998

FINANCE COMMITTEE

Minutes of the proceedings of the Meeting held on 12 April 1996 at 2:30 p.m. in the Legislative Council Chamber

Minutes of the proceedings of the Meeting held on
12 April 1996 at 2:30 p.m. in the Legislative Council Chamber