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Following is the speech by the Chief Secretary for Administration, the Hon Donald Tsang, in resuming the debate on the Second Reading of the Appropriation Bill 2002 in the Legislative Council today (April 17):
Madam President,
Since its announcement on March 6, this year's Budget has drawn positive and generally supportive responses from Members of this Council, different sectors of the community and the public at large. The Financial Secretary has outlined in the Budget the future direction of our economic development, our fiscal objectives and principles, as well as the role of the Administration in the economy. These have been well received as a whole.
We are most grateful to Members of this Council for the invaluable views on the Budget. Let me now take the lead in responding to some of the major points raised by Members in the debate last week.
The Accountability System
First, on the implementation of the accountability system. The Chief Executive has addressed this Council just now and issued a detailed information paper on the specific arrangements of the system of accountability of principal officials in the HKSAR. The introduction of the accountability system is pivotal to the effective governance of Hong Kong. We fully understand that Members require sufficient time to study and discuss the issue. Which is why, starting from tomorrow, the LegCo Panel on Constitutional Affairs will hold a series of meetings on the subject, which will be open to all Members. The Secretary for Constitutional Affairs will take the opportunity to explain in greater detail to Members the fine points of the system. At future meetings of the Constitutional Affairs Panel in the coming month, we will continue to explore with Members this important subject. At a later stage, we will move a motion debate at this Council. We hope that through these meetings, the general public will be able to have a better understanding of the accountability system. We will have an exchange of views with them as well. I am confident that after Members have scrutinized, examined and discussed the accountability system in a prudent and objective manner, the Administration will have their support in implementing the accountability system in the HKSAR.
Civil Service Pay Cut
Madam President, I would now turn to matters concerning the Civil Service. In his Medium Range Forecast for the next five years, the Financial Secretary has adopted as his assumption that Civil Service pay will be slashed by 4.75%, and the salary-related portions of subventions to the various subvented organisations be reduced by the same rate in 2002-03. I wish to reiterate here that as clearly stated in the Financial Secretary's Budget Speech, the aforesaid reduction is only an assumption made for financial planning purposes in the Medium Range Forecast. In determining this year's Civil Service pay adjustment, the Administration will adhere to the existing mechanism and take into account various factors, including the outcome of the private sector pay trend survey, the Administration's own budgetary position, the economic situation, changes in the cost of living, morale of the Civil Service and views of the staff side. When the outcome of this year's pay trend survey is made available in May, the Administration will decide on Civil Service pay adjustment, following the principles of lawfulness, fairness and reasonableness. Meanwhile, I am confident that my fellow colleagues will be as committed as ever to serving the community.
Some Members have also remarked that there is room for improvement in the existing Civil Service pay system. In fact, the Administration has announced in last December that a comprehensive review of the Civil Service pay policy and system would be carried out, with the assistance of the Standing Committee on Civil Service Salaries and Conditions of Service, the Standing Committee on Disciplined Services Salaries and Conditions of Service and the Standing Committee on Directorate Salaries and Conditions of Service. The objective of the review is to ensure that our Civil Service pay system moves with times, making it more flexible as well as easily manageable, and facilitating better match of jobs, talent and pay.
The review will be conducted in two phases. In phase one, the three Committees will make reference to the latest developments in Civil Service pay administration in other governments, analyze the pros and cons of their practices and draw up recommendations on the best practices that may be of relevance to Hong Kong. In phase two, we will build on the findings in phase one, to conduct an in-depth study on how to improve our Civil Service pay policy and system. Throughout the course of the review, we will extensively consult the staff side and listen to public views. The three Committees will submit the findings of their analysis and study in phase one to the Administration by the middle of this year. Preliminary findings of the study will be released in late April before the report is finalized.
Streamlining the Civil Service Establishment
We are committed to maintaining a small but efficient Civil Service. As a result of our efforts, the size of the Civil Service establishment was reduced from the 198 000 anticipated for March 2000 to 184 300 as at January 1, 2002. Total savings so achieved amount to $1.43 billion. We are making good progress to reduce the establishment further to 181 130 by March 2003, representing a further reduction of some 17 000, or 9%, since March 2000.
I am also pleased to inform Members that savings amounting to $2 billion have been achieved in 2002-03 under the Enhanced Productivity Programme. Together with the savings achieved in the two preceding financial years, the accumulated savings now amount to $5.4 billion, i.e. 5.2 % of the expenditure, which has exceeded our cumulative savings target of 5%.
Expediting Public Works Procedure and the Town Planning Process
During the debate, some Members urged the Administration to streamline the public works procedure and expedite the implementation of the infrastructure projects, so as to bring early benefits to the community at large, stimulate economic development and create employment opportunities. The Administration has completed the first phase of the review on expediting the public works procedure. Through a number of measures, such as simplifying processing procedure and enhancing project management efficiency, we have now successfully shortened the pre-construction lead time from an average of six years in the past to less than four years on average.
Phase two of the review is underway, which covers the statutory processes of public works. We believe that the process of handling public objections can be further expedited, to be underpinned by amendments to the statutory provisions governing the process. Efforts will be made to strike a balance between safeguarding individuals' rights to raise objections to public works projects and reducing the lead time in these projects in the interest of the whole community.
In the meantime, we are planning to amend the Town Planning Ordinance to streamline the vetting procedures of applications for planning permission, expedite the preparation of plans, and shorten the time required for handling objections. We will also enhance the transparency of both the planning mechanism and the relevant processes with a view to achieving a balance between efficiency and public participation. The Planning and Lands Bureau is working out the detailed proposals and will consult Members and relevant parties in the near future. I hope that Members will give their full support to these proposals, which will help speed up the public works projects and their planning process.
Allocation of Land for Housing Development
Several Members have expressed concern over the Administration's recent modification of the land grant mechanism for housing development.
In my statement on housing issues made in September last year, I already pointed out that the Administration would formulate a balanced set of criteria to guide the allocation of land for housing development. This is nothing new. What we have done now is to formalize the set of criteria used in the past and assign an existing committee to apply these criteria. As explained by the Secretary for Planning and Lands at the Special Finance Committee meeting, the set of guidelines comprises the a number of factors for considerations -
(a) Land Policy -
To optimize the utilization of scarce land resources, in order to put land to its best economic and social use.
(b) Planning Policy -
To promote an appropriate mix of private and public housing of different densities in urban and new town areas in order to achieve social and visual harmony and variety in urban built form.
(c)Effectiveness -
To achieve economies of scale and to provide adequate facilities for the community.
I wish to assure Members that there is no policy to create ghettos in our community. We will continue to ensure that there will be adequate land to meet our public housing objectives. The key to the exercise is to strike the right balance in the allocation process, in the best interest of the community as a whole.
Housing Issues
I notice that quite a few Members had touched upon the public housing policy during the debate. This reflects Members' great concern about our public housing programme.
The SAR Government is committed as ever to assisting families which cannot afford to buy or rent private housing to solve their housing problems. The achievements of our public housing programme during the past five years include : significantly reducing the number of households in poor living conditions to about 100 000; redeveloping old housing estates and demolishing all temporary housing areas, cottage areas and a number of squatter areas; offering public housing flats for more than 85 000 families; and reducing the waiting time for public rental housing to the current three years and three months, a three month difference compared with our goal. Over the same period, the Housing Authority (HA) has provided a total of 125 500 rental units, or an average of about 24 000 each year, for households on the waiting list. This represents an increase of more than 100% when compared with the figures before 1997. All these reflect our firm commitment to tackling the housing problem.
Individual Members proposed time and again that public housing rentals be reduced. At present, the lowest monthly rental is now $241(all-inclusive) and in general, over two-thirds of the public housing households are paying a monthly rental of less than $1,500. These low rental levels of the public housing flats are the first safety net provided by the Administration. The second safety net is the Rent Assistance Scheme administered by the HA. Under the Scheme, eligible applicants will be given a 50% rent reduction to tide them over their financial difficulties. The third safety net is the Comprehensive Social Security Assistance Scheme under which eligible families are exempted from any rent payments. These three safety nets are more effective in addressing the various needs of people in different circumstances as compared with the proposed rent reduction across-the-board.
As to the Home Ownership Scheme (HOS), some Members are concerned that suspending the sale of HOS flats will impose a financial burden on the HA. I would like to reiterate that the Administration would see to it that the HA will not, on account of the moratorium, encounter cash flow problems.
Some Members specifically raised the point that they hoped the Administration could complete the review of the institutional framework for public housing as soon as possible, to balance the interest of all sectors of the community. The Committee on Review of the Institutional Framework for Public Housing which I head is working towards this direction. The reform proposals raised by the Committee must certainly tie in with the accountability system put forward by the Chief Executive. On the other hand, the public housing framework should also be simplified. The review is now at its final stage. I hope that the reform proposals will be announced in the near future.
Cooperation between Guangdong and Hong Kong
Apart from housing issues, I would also like to speak on the cooperation between Hong Kong and Guangdong. The SAR Government is making an all-out effort to facilitate the passenger and cargo flow between Hong Kong and the Mainland. The SAR Government and the Mainland authorities share the common goal to enhance the overall competitive edge of the region on a mutually beneficial basis and are actively exploring opportunities for cooperation. Hong Kong will work closely with Guangdong on a wide range of issues, including cross-boundary traffic arrangements, interface and cooperation in infrastructural projects such as airports, ports and railways, as well as promotion of tourism and environmental protection in the region. Both sides also agree that the Pearl River Delta is an economic entity with enormous potential. China's accession to the World Trade Organisation presents an opportunity for the Pearl River Delta to scale new heights in economic development. Both Hong Kong and Guangdong should complement each other in achieving our common goal. We firmly believe that between Hong Kong and Guangdong there is far more scope for cooperation than competition. Enhanced coordination in infrastructural development between the two sides, coupled with measures in place to avoid mismatch of resources allocation and duplication of infrastructural facilities, will surely turn the Pearl River Delta with Hong Kong as its economic and trading hub into a great driver for economic development in Asia.
Madam President, I will give a detailed account of the development of Hong Kong and Guangdong cooperation at the House Committee meeting this Friday.
Madam President, two of my colleagues, the Secretary for Health and Welfare and the Secretary for Education and Manpower, would respond specifically to Members' remarks and suggestions on issues that fall within their policy areas. After that, the Financial Secretary would make some concluding remarks and wind up the debate.
With these remarks, I urge Members to vote in support of the 2002-03 Budget. Thank you.
End/Wednesday, April 17, 2002
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