Following is the speech by the Chief Secretary for Administration, Mrs Anson Chan, in resuming the second reading debate of the Appropriation Bill 2001 -2002 in the Legislative Council today (April 4):
Since the Financial Secretary delivered his Budget for 2001/2002 almost a month ago, the general verdict seems to be that the Budget is prudent and balanced: an appropriate response to the gradual revival of our economy, amidst the external uncertainties facing us in the next 12 months. I note from reports in the press and the speeches in this Council last week that both the wider community and Members of this Council approve of the overall approach and support most of the proposals in the Budget. I would like to thank Members for their understanding and support.
Working with the Community and Members
Members would appreciate that we have been making particular efforts to step up our communication with the community at large. We have also taken every opportunity to enhance our working relationship with Members of this Council. Consultation during the annual budgetary exercise best illustrates our efforts in this regard.
Over the years, the Financial Secretary has greatly expanded the pre-Budget consultation process. Indeed, for the purpose of the Budget this year, we have conducted 32 meetings with media representatives, commentators, academic economists, analysts, professionals, businessmen, district councils and Members of this Council. Our consultation with this Council started as early as June 2000 when we sought Members' view on spending priorities. This was followed by another round of consultations with Members last October on the revenue aspects of the Budget. We firmly believe that early consultation not only enables the Administration to know at an early stage the views and expectations of the community with regard to the budget, but also allows Members to play an active role in the formulation of our budgetary proposals. In this way, we hope to turn out a product which enjoys the support of the community and Members alike.
We have taken careful note of Members' views, the majority of which had been positively addressed in the Budget. However, I hope Members would acknowledge the difficulty in meeting all expectations both within and outside this Council, particularly where these expectations are conflicting. The entire consultation process, if it is to work, must involve some "give" and "take" from all sides. As a responsible government, we have, at all times, to bear in mind the overall long term interest of the community, and prioritise and strike a balance among competing demands. This is what the Financial Secretary has achieved in his Budget.
I appreciate the concerns of some Members with regard to certain specific proposals in the Budget which may not meet their expectations. But I must stress that last minute demands coupled with a threat of voting against the Budget if such demands were not met defeats the whole purpose of our time-honoured consultation process. The Financial Secretary cannot concede without upsetting the careful balance which he must strike if his Budget is to address the overall good of the community. I hope Members will reflect seriously on the consequences of such action.
I now turn to a number of points raised by Members in the debate last week.
Civil Service Reform
Our Civil Service is internationally recognized as one of the best civil services in the world. My colleagues and I are proud to be members of this great team. Yet, we have been mindful not to sit on past laurels. We need to be pro-active and innovative in order to cope with changes in the community and respond to the rising expectations of the public.
The Civil Service Reform we proposed in 1999 aims at modernizing the management of civil servants to bring in additional flexibility and openness. Following several rounds of comprehensive consultation and in-depth study, we have systematically implemented most of the proposed initiatives, including the new entry system and terms of employment for new recruits, and a new package of pay and fringe benefits for them, which is more in line with that offered in the market.
Civil servants have to keep pace with the rapid advancement of technology and upgrade their skills to meet the latest service needs and the challenges that lie ahead. We need to promote a new culture of "life-long learning" in the context of the Civil Service Reform.
In the next three years, we will allocate an additional $50 million for training and development of civil servants. We will pay particular attention to the training needs of front-line staff and those in the Voluntary Retirement Grades, encouraging them to upgrade their skills and adapt themselves to the new working environment.
We are considering a performance-based reward system and a civil service provident fund for new recruits. This year, we will launch a pilot scheme to reward service teams with outstanding performance. At present, more than 10 departments have indicated their interest in joining the scheme. We will carefully review the results of the pilot scheme to see if it should be extended to other departments.
On the civil service provident fund scheme, our consultant has completed a report on its first phase study and recommended the introduction of a civil service provident fund scheme to provide retirement benefits for new recruits. The proposed arrangement is in line with the community-wide mandatory provident fund scheme. It is also compatible with the pension schemes of most private and public organizations in Hong Kong. The level of benefits, as indicated by the study, compares favourably with the best pension scheme offered in the private sector. We are proceeding with consultation, and the initial public response to the report has been very positive. The consultation period will expire at the end of April. Based on the views received, we will embark on the second phase study and work out the details of the implementation plan.
To enhance civil service efficiency, the Financial Secretary and I set a target last year to contain the size of the civil service by deleting 10,000 civil service posts within three years. With excellent cooperation from all departments, the civil service establishment has been reduced from 198,000 in last year's Estimate to 190,000 as at the end of March this year. We expect that in the next two years, departments will be able to delete another 9,000 posts, bringing our total establishment to 181,000. Resources saved will be used for enhancing service standards and providing additional services.
I must make it clear that in the course of containing the size of the civil service, we have not lowered the standards of our services, nor have we resorted to forced redundancy. Deletions have been achieved by cancelling accumulated vacancies and new vacancies arising from staff leaving the service or joining the Voluntary Retirement Scheme. In approving voluntary retirement applications and arranging the departure of successful applicants, departments will take appropriate measures in staff redeployment, re-engineering of operation or out-sourcing of service, in order to ensure quality of service. Thus, those who remain in the Service will not be overburdened.
Improving the management system and mode of operation of public service to increase efficiency has always been one of our priorities. The proposed corporatisation of the Survey and Mapping Office aims at providing better service to the general public and the commercial sector by adopting a more flexible mode of business operation. When implementing the scheme, the Administration will allow staff to opt to retire voluntarily or to retain their civil servant status and work in the new organization by way of secondment. Those who opt for voluntary retirement may join the new organization under its terms and conditions of employment.
We believe that the arrangement will not only facilitate more flexible use of resources, but will also look after the interests of civil servants now serving in the Survey and Mapping Office. We hope that following further consultations, the corporatisation plan will receive support from the public, Members of this Council as well as the affected staff.
In the past few years, managers in departments have built up their experience and established a system and culture of strictly containing staff size and monitoring the use of resources. Therefore, the Financial Secretary and I have decided to resume the recruitment of civil servants from April onwards. Nevertheless, the two resource bureaux will continue to take appropriate actions to monitor and control the growth of the Civil Service.
Despite various challenges, the civil service will continue to provide a high standard of customer-oriented service. Since 1999, the Civil Service Bureau has been organizing the "Customer Service Award Scheme", which has been well received by both management and staff. This year, a total of 20 teams received awards. The outstanding performance of these front-line staff should set an example for the entire civil service to follow.
The various initiatives we have taken in recent years will give Hong Kong a lean, efficient and well motivated Civil Service whose members take pride in serving the community. Coupled with maintaining the core values of integrity, impartiality, openness and transparency, the Civil Service will be well positioned to face the challenges of the 21st Century.
It has always been our aim to improve the efficiency of the public sector, to ensure that the services we provide meet today's needs, and that we utilize modern management practices and up-to-date technology. I am at the same time fully conscious of the fact that changes in the way we operate can cause concern, both to our clients and to the staff involved. We have been and will continue to address these concerns, with understanding and sincerity.
It is, nevertheless, clear to everybody that we cannot stand still, if we wish to achieve our aspiration of making Hong Kong a world class city. With regard to government services, there are some services that are commercial in nature or can be provided more efficiently by the private sector. With a view to reducing the burden placed on taxpayers, we must continue to explore various options, including corporatisation, to ensure that the government remains efficient and cost effective. That said, I wish to reassure Members that we will proceed carefully, bearing in mind the wider interest of the community and the legitimate concerns of staff.
Madam President, several of my colleagues will respond specifically to some of the remarks and suggestions made by Members before the Financial Secretary winds up the debate with his observations. In line with the clear wish of the community, I urge all Members to vote in support of our proposals in the 2001/2002 Budget.
Thank you Madam President.
End/Wednesday, April 4, 2001