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Following is the translation of the opening statement by the Chief Executive at the Legislative Council session today (June 23) :
Madame President,
Today, I would like to address two issues, one on the recent economic situation and the other on the issue of short piling. The first quarter of this year witnessed robust economic recovery with a vigorous growth of 14.3 per cent over the corresponding period of last year. What is the drive behind such a remarkable recovery? Inward investment, tourism, domestic consumption and external trade have all recorded considerable growth. With these favourable factors, we are witnessing favourable economic growth. Actually, what issues are we most concerned about at present? Will economic growth be sustainable? I am optimistic. Of course, we are preoccupied with the possible increase in US interest rates and the growing strength of the US dollar. But Hong Kong will surely benefit from the continued economic growth of the global markets, especially the Mainland market.
I would like to share with you some relevant statistics. In the first quarter of this year, tourism experienced a very vigorous growth. The total number of visitors for this year is expected to reach 12 million. Growth in external trade in the first quarter exceeded 20 per cent. Though Hong Kong branch offices of multi-national enterprises were hit by the Asian financial turmoil, we still have about 2 500 of them here. Compared with a year or two ago, we now have 2 000 newly-established IT companies in Hong Kong. The tenancy of Cyberport and the first phase of Science Park is almost fully taken up. Developing Hong Kong into a centre of innovation and technology is no longer a dream. In 1999, the take-up rate of office premises reached a record high of five million square feet. Investment increased by 5.6 per cent and consumption grew by 14 per cent. All these figures are very encouraging. On the basis of these indicators, my colleagues and I are confident that we are able to realise a growth rate of six per cent or more for this year and four per cent for the next year. Later this year, China will join the World Trade Organization and the Disney theme park project will be completed within the next few years. Furthermore, many infrastructural development projects are well under way. I am, therefore, optimistic about the mid-term outlook of our economy.
I think you are more concerned about whether economic growth will create more job opportunities. The answer is affirmative. In fact, we have learned from experience that the improvement in the job market always lags behind economic recovery. It is only after a period of time that the unemployed will feel that our economy is really improving. The unemployment rate has in fact dropped from the peak of 6.3 per cent in 1999 to 5.1 per cent today. During the past 12 months, we created 120 000 job opportunities.
Our other major concern is the disparity between the rich and the poor. I understand perfectly that the low-income groups are most vulnerable to the impacts of the Asian financial turmoil and the restructuring of the Hong Kong economy. To them, recovery comes slowly. Once they have lost their jobs, it is difficult for them to get re-employed. I do not wish to see these hard-working people being unable to share the fruits of economic recovery. To lift them out of poverty is an immense challenge for all of us. The crux of the matter lies in formulating more comprehensive training and retraining programmes, including in-service training, so that these people can continue to apply themselves in a new environment.
I am also concerned about the property market. I do appreciate the importance of a stable property market and the pains brought about by a negative equity position. I do not wish to see further drops in property prices because that will dampen consumption and affect our economic recovery. Of course we appreciate that the purchase of a property is the most important lifetime investment for any person. Aside from the wish to have a decent home, one would expect a reasonable return from the investment.
I would also like to speak on the issue of short piling. I fully recognise that this issue has given rise to very considerable concerns in the community. Public safety is at stake. Public funds have been invested in the projects in question. In fact, the production of public housing reached an all-time high in the late 90's. Due to tight construction schedules and keen competition among the contractors for contracts, deficiencies in the quality of construction became a distinct possibility. Even though departments concerned have heightened their alert, they were not successful in preventing some projects from being affected by short piling. The Housing Authority and the Housing Department carry responsibility for these cases.
Two years ago, the Housing Authority worked in close cooperation with the ICAC to investigate allegations of malpractice on foundation works in Tung Chung. The Housing Department responded promptly by stepping up its efforts in the supervision and monitoring of all projects then under construction. It also took the initiative to conduct an intensive investigation on the foundation works on all construction sites. The investigation of the 370 blocks under construction revealed that apart from the two blocks to be demolished, six blocks were in need of some remedial or preventive works. These works have commenced. The remaining 362 blocks were structurally in order.
The Housing Authority has continued with the issue and has not relented its efforts. The Housing Authority has formed an independent team of consultants led by an internationally renowned specialist to conduct another comprehensive review of all projects under construction. The review has been completed. The team has endorsed the remedial work already in hand on the six problematic blocks identified and given a clean bill of health to the remaining 362 blocks.
The Housing Authority has also conducted a comprehensive review of its procurement, staff training, supervisory and monitoring systems. Remedial measures have been effected to rectify the shortcomings identified. It has also engaged the industry at all levels in mapping out a programme of reform. Consensus has already been reached on the broad direction and implementation has begun. I have also established a Construction Industry Review Committee under the chairmanship of the Honourable Henry TANG to study the way forward and to identify ways of improvement for the construction industry.
Buying a property is the most important purchase any family makes in a lifetime. Shoddy construction work is by no means acceptable. The Housing Authority will never offer sub-standard flats for sale to the public and has the confidence to stand by this principle. As a measure of its confidence, the Housing Authority has offered a 10 year structural guarantee for all new HOS blocks and a 20 year structural guarantee for all the HOS blocks in Tin Shui Wai.
The workload of the Housing Authority and the Housing Department has been growing over 50 years to manage an expanding housing programme. The Department is housing manager to almost half of Hong Kong's population i.e. 3.5 million people. Currently, it has 170,000 flats under construction. By comparison, the largest real estate developers in Hong Kong have only about 10,000 flats under construction at the same time. We should have recognised earlier that with such a wide management span, there is a distinct possibility of a deficiency in the supervision of individual projects.
We are all aware that the Housing Authority is an autonomous body. It formulates public housing policies as an autonomous body. Being a government department, the Housing Department serves as the executive arm of the Housing Authority, while the Housing Bureau has overall responsibility for public housing policy. Is such an organisational arrangement appropriate? Is the division of responsibility sufficiently clear? I believe that the time has come for us to undertake a review. I have, therefore, asked the Chief Secretary for Administration to oversee the exercise. We will establish a commission to study the most appropriate organisation for taking charge of the public housing programmes and housing policy, and the inter-relationship between the Housing Authority, Housing Society, Housing Department and Housing Bureau. We will invite representatives from among the relevant professions, such as the construction and engineering sectors, to participate in the work of the commission.
I would like to share with you my views on the future of the Chairman of the Housing Authority and the Director of Housing. Who is to be held responsible for the issue of short piling? Though I am not directly involved in the work, as the Chief Executive of the HKSAR, from the constitutional standpoint I also carry responsibility. In the past few weeks, there has been much discussion about the Chairman and the Director. Indeed, they are responsible for the short pile problem and they have accepted that responsibility. Together with other members of the Housing Authority, they have already apologised to the public.
If we dwell on the question more deeply, we might ask whether the two of them should be held solely responsible for the organisational overlays and unclear division of labour. Policies determined in the past have led to the Housing Department growing into a mammoth and unwieldy body. Again, is this just the responsibility of the two of them? Should they be held solely responsible for the "undesirable corporate culture" of the Housing Department developed over the years? Should they be held responsible for the malpractices of a small group of developers? I agree that they both carry responsibility for substandard piling. But then, what about the other senior officials? What about other members of the Housing Authority? In fact, the two of them have taken the initiative to launch an investigation into the present case of substandard piling. It is worth noting that once problems were identified, they took the initiative to direct that an examination of all the 370 blocks be made. Over the years, they have devoted themselves to serving the community and their dedication is there for all to see.
It is easy for me to dismiss Rosanna Wong or accept their resignations. But the question is: will that solve the problem? Is that enough to solve the problems we face? What should be our top priority at present? It should be stepping up supervision and ensuring that similar problems will not recur. I, therefore, hope that Rosanna Wong and Tony Miller will stay on and embark on these tasks with the help of people both inside and outside the Government. On the contrary, if both of them leave at this critical moment, there will be an administrative and legal lacunae at the top, which is quite undesirable. I want you all to know, I am taking the overall interests of the community into consideration. In fact, Rosanna Wong has time and again submitted her resignation, but I have urged her to stay on. Under the considerable pressure from different directions, she may put the same request again and I may not be able to keep her. But I will do my best to convince her to stay on, that I hope that I can manage to do so. As for Tony Miller, the Director of Housing is a career civil servant. We do not have a system of political appointment within the civil service. His service should only be affected if there were proven misconduct or other disciplinary offences. Whilst many people may be dissatisfied with the present system, is it appropriate to impeach a civil servant under the present system? I believe we need to think thrice.
What do I hope to achieve? Firstly, with the concerted efforts of all, it is my earnest hope that we can put in place a construction industry which the community can take pride in. Secondly, I hope that we can improve the efficiency and accountability of public housing construction and management. Thirdly, above all, it is my hope to ensure the highest safety standards are vigorously enforced. Thank you.
End/Friday, June 23, 2000
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