**************

Following is the transcript (English portion) of the press conference on the Report of the Task Force on Population Policy given by the Chief Secretary for Administration, Mr Donald Tsang, this (February 26) afternoon:

Reporter: Some of the recommendations in your report seem like more revenue-raising measures than population policy measures, for example, the $400 levy on maids. Can you explain exactly what you are trying to achieve with this levy on maids; is it a measure to control their population or is it a revenue-raising measure? Are you encouraging the hiring of local maids?

CS: First of all, the objective of the population policy has been set out very clearly, sir, in my report. If you look at Chapter 4 of the report it says so very clearly. It said it deals with the Hong Kong population profile, it deals with the quality of the Hong Kong population. Financial or fiscal sustainability is only one of the aspects, so it has nothing to do, it's not targeting at revenue raising, as you have suggested. And as regards the wage adjustment for the foreign domestic helpers we are doing it in strict accordance with existing policy, and indeed over the last 30 years during which this present system has been in force, there has been about 18 changes, revisions of wages of foreign domestic helpers. Seventeen times there was a raise, once there was a reduction. In one occasion the rise was a very high percentage as well. We are doing exactly as in accordance with existing policy.

As regards the purpose of the levy, we do believe that the employers of foreign domestic helpers should play a role in helping Hong Kong in training and retraining and upgrading the skills of the domestic workers. And indeed there is already a scheme under which such levy has been imposed. These employers are enjoying the benefit of the very special policy allowing foreign domestic helpers to come to Hong Kong. We also looked at the increase in the number of foreign domestic helpers in Hong Kong. At the moment it represents 7 or 8 percent of the entire workforce, and the number of foreign domestic helpers continues to increase despite the domestic economic downturn. It is a factor in the population which we cannot ignore in formulating a population policy. Also we looked at the present economic situation in Hong Kong. There is a high unemployment rate and there is a strong mismatch between the skills which our people possess and the skills which are demanded in a high value-added and knowledge-based economy. Enormous resources are being put into training and upgrading the skills of existing workers, so this is a matter we do need to address. If you look at our present figures, at present we have nearly 240,000 foreign domestic helpers in Hong Kong and according to our forecast, in about two years' time, there will be a surplus of about 136,000 positions in the semi-skilled and unskilled categories of workers in Hong Kong. So I think we have a very good economic and social case in including the foreign domestic helpers into the present scheme of levy.

Reporter: Sir, are you trying to control their population?

CS: No, I believe it is important that those employers, may I repeat, of the foreign domestic helpers play a role while enjoying the benefit of this very special scheme in helping the education, retraining and training of our existing workforce.

Reporter: Why didn't you seek to have a say in the process so that the Hong Kong government can decide who can actually come to live in Hong Kong, and why didn't you seek to allocate part of the existing quota for skilled and professional Mainlanders to come to Hong Kong?

CS: We know this has been a matter of concern to many people. We have examined the present system very carefully. According to the interpretation of the Basic Law Article 22, under which people come to HK under the one-way permit or two-way permit systems, it is quite clear the approving authority rests with the Mainland authority. Secondly, the present system is a very transparent one. The main purpose is family reunion and also allowing those people, those children with right of abode in Hong Kong to come to Hong Kong as quickly as possible. So there is no question of economic or financial screening. So the main purpose of the Hong Kong SAR government's participation in the system will rest largely on the verification of facts which we are already doing to ensure that there is no abuse, to ensure that the claim to relationship between the applicants in the Mainland with the Hong Kong residents will be verified. And at the same time we know that the Mainland authorities are publishing in Hong Kong local newspapers those people who have so applied under the system, so it is a totally transparent system. There would be very little to be gained and there would be a lot of work, particularly involving amendment of the Basic Law, if we want to change the present system.

As regards the second part of your question, we do believe it is important to allow those Hong Kong residents who have entitlement to come to Hong Kong to do so under this quota. We do not think that we should make use of this quota for other purposes so as to reduce the opportunities of these young kids who have right of abode in Hong Kong. For the purpose of attracting Mainland businessmen, we have a separate proposal. We said that we would allow Mainland professionals to come to Hong Kong to work as long as they have a skill which is scarce in Hong Kong and the Hong Kong employers are paying them the market wage. And we have no numerical limits as far as that is concerned, so what we are proposing is a much more liberal, a much more civilized system.

(Please also refer to the Chinese portion.)

End/Wednesday, February 26, 2003

NNNN

Floor/ English/Cantonese/Putonghua