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Following is a question by the Hon Tommy Cheung and a reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (December 17):
Question:
It is learnt that with the recent successive restaurant closures, the catering industry has been heavily hit by the financial tsunami. Members of the industry have raised certain requests for alleviating their burden, but the Government has not given any concrete response to such requests. In this connection, will the Government inform this Council:
(a) whether it will make reference to the relief measures implemented by the Government in 2003 to deal with the outbreak of Severe Acute Respiratory Syndrome and immediately waive the licensing fees for one year in respect of restaurant licence and liquor licence; if it will not, of the reasons for that; and
(b) as the Sewage Services (Sewage Charge) Regulation stipulates an annual increase of about 9% in the rate of sewage charge over a period of 10 years from this financial year onwards, whether the Government will immediately waive the sewage charge and trade effluent surcharge payable by the catering industry for at least four months, so as to improve the business environment of the catering industry; if it will not, of the reasons for that?
Reply:
President,
(a) The restaurant/liquor licence fee falls under the category of fees charged under the "user pays" principle, i.e. the Government recovers full costs from users for the provision of services.
There are mainly two types of restaurant licences, namely General Restaurant Licence and Light Refreshment Restaurant Licence. The licence fees are charged according to the floor area of the premises. The larger the floor area, the higher the licence fee is. At present, there are 19 bandings of restaurant licence fees. For General Restaurant Licence, restaurants with floor area 100 square metres or less have to pay an annual licence fee of $2,520 or $5,170; restaurants with floor area over 100 square metres to 250 square metres have to pay an annual licence fee of $3,140 to $11,640; and restaurants with floor area over 250 square metres have to pay an annual licence fee of $6,860 to $258,870. As for Light Refreshment Restaurant Licence, restaurants with floor area 100 square metres or less have to pay an annual licence fee of $1,810 or $3,690; restaurants with floor area over 100 square metres to 250 square metres have to pay an annual licence fee of $2,270 to $8,355; and restaurants with floor area over 250 square metres have to pay an annual licence fee of $4,960 to $185,250. Overall, general restaurants and light refreshment restaurants with floor area 100 square metres or less and over 100 square metres to 250 square metres account for about 52% and 26% of the total number of restaurants in Hong Kong respectively. In other words, about 80% of the local restaurants pay an annual licence fee of $11,640 or less.
As for liquor licences, the annual licence fees for the two licences, namely Liquor Licence and Club Liquor Licence, range from $1,100 to $4,300. There has been no adjustment to the restaurant/liquor licence fee since 1998.
Although restaurant/liquor licence fee is part of the operating expenses of a restaurant, it only accounts for a minute portion of the operating costs. For instance, information from the Census and Statistics Department shows that, in 2006, the total operating expenses of local restaurants amounted to some $22.9 billion, while the total licence fees paid by the catering sector in the same period were some $200 million, representing less than 1% of the operating expenses. Hence, the impact of waiving restaurant/liquor licence fee may not be very significant in helping the trade to reduce the operating costs.
(b) The purpose of introducing a Sewage Services Charging Scheme was to enhance public awareness of the burden exerted on the sewage treatment system and the nature environment by the effluents they discharged, as well as encourage trades to reduce their effluent strength through a charging scheme based on the "polluter-pays" principle. The findings of a survey of effluent strength indicated that effluent strength of many of the more polluting trades was weaker than that of the time when the scheme was first introduced. This shows that the charging scheme, which based on the "polluter-pays" principle, is effective in encouraging businesses to reduce the discharge of highly polluting effluents by improving pollution control measures. The Government will continue to engage the trades and help them improve controls on effluent discharge through workshops and seminars. These activities will help the trades effectively control their expenditure related to the Sewage Services Charging Scheme.
At present, the operating accounts of sewage charge and trade effluent surcharge still show a deficit. Part of the recurrent expenditure of sewage treatment is already borne by the taxpayers. In line the principle of "polluter-pays", the Government considers it inappropriate to increase taxpayers' burden in this area.
The Government has been paying close attention to the impact of the financial tsunami on the small and medium enterprises (including the catering industry) and has introduced a number of measures with a view to further strengthening support for business establishments in Hong Kong. For instance, the Finance Committee of the Legislative Council just approved the expansion of the Special Loan Guarantee Scheme last Friday. Flexibility will be allowed regarding the use of the loan under the Scheme in support of trade finance. In the face of the deepening impact of the financial tsunami on the global economy, we expect a tough time ahead. To weather the current crisis, the whole community, including business establishments, employees and the Government, must work closely together. The Government will keep in view the business environment and economic development.
Thank you, President.
Ends/Wednesday, December 17, 2008
Issued at HKT 14:51
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