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LCQ22: Youth employment support

     Following is a question by the Hon Jeffrey Lam and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (June 1):


     The graduates of this academic year will soon join the labour market, but the statistics of recent months have shown that Hong Kong's economic situation is worsening, causing an upward trend of the unemployment rate and a persistently high unemployment rate among the young people.  Moreover, according to the findings of a survey, the business index in the second quarter of this year has declined for three consecutive quarters, indicating a negative business outlook among the small and medium enterprises (SMEs).  As such, SMEs are less eager to recruit new staff. In this connection, will the Government inform this Council:

(1) of the latest manpower projection findings for this and next year, including a breakdown of the number of local graduates by education level (i.e. (i) upper secondary, (ii) bachelor's degree, (iii) associate degree and (iv) other academic qualifications), a breakdown of the number of jobs available by industry and education level, and a breakdown of the projected unemployment rate by industry (set out in a table);

(2) of the special measures that the authorities have put in place to assist graduates in finding jobs in view of the worsening economic situation; whether they will consider (i) creating non-civil service contract posts for graduates who have no working experience to apply, (ii) encouraging non-governmental organisations to offer short-term employment opportunities for graduates, (iii) streamlining the procedure for application for deferment of student loan repayment, (iv) raising the ceiling for subsidies of tuition fees under the Continuing Education Fund, and (v) stepping up employment support and counselling services on emotional problems; if they will, of the details; if not, the reasons for that; and

(3) as SMEs employ a total of more than one million employees, whether the Government will introduce new measures to help SMEs tide over the economic difficulties, including new measures to provide subsidies to SMEs for enhancing their operational efficiency and competitiveness in the market, and to assist SMEs in developing new markets, with a view to securing employment for members of the public; if it will, of the details; if not, the reasons for that?



     The labour market held largely stable on entering 2016. However, the Hong Kong economy only expanded by 0.8 per cent year-on-year in real terms in the first quarter of 2016, the slowest growth pace in four years. The seasonally adjusted unemployment rate remained unchanged at 3.4 per cent in February - April 2016, after edging up by 0.1 percentage point in January - March 2016. In the near-term, the employment outlook remains overshadowed by the strong external headwinds and a slow-growing local economy. The weakening labour demand in sectors relating to trade and tourism also warrants particular concern. Nevertheless, industries such as aviation, construction, engineering and particularly care services are still looking for additional manpower.

     Higher youth unemployment rate compared to the overall unemployment rate is a global phenomenon. In Hong Kong, the unemployment rate for persons aged 15-24 was 8.9 per cent, which was broadly on par with that of the preceding period, but up by 0.4 percentage point over the year-ago level. Although the youth unemployment rate in Hong Kong is lower than those of such advanced economies as Europe and the United States, in view of the slow-growing local economy, we will closely monitor the youth employment situation and continue to provide timely support.

     Having consulted the relevant bureaux, our consolidated response to the Hon Jeffrey Lam's question is set out below:

(1) The estimated number of graduates of local secondary schools (including government, aided, Caput and schools under direct subsidy scheme) in 2016 and 2017 are 56 800 and 52 100 respectively. It is noteworthy that most secondary school graduates will choose to continue with their studies. The Education Bureau conducts Secondary 6 (S6) Students' Pathway Survey on an annual basis with a view to collecting basic information on the educational status of S6 graduates. Among Hong Kong Diploma of Secondary Education Examination graduates who responded to the survey, it was very common (consistently accounting for over 80 per cent in the last 4 rounds of the survey) for them to pursue full-time study. On the other hand, the proportion among the S6 graduates who were engaging in full-time employment, part-time employment/study as a whole has remained steadily in a range between 10 per cent and 13 per cent.

     As regards the post-secondary sector, based on information provided by institutions, some graduate statistics of full-time sub-degree and undergraduate programmes for 2015 and 2016 are set out at Annex 1.  Graduate statistics for 2017 are not yet available.  In the same vein, it is noteworthy that not all graduates of full-time sub-degree and undergraduate programmes will choose to join the labour market after graduation.  For example, in 2015, the proportion of graduates of different types of full-time sub-degree and undergraduate programmes joining the labour market ranged between 31.4 per cent and 94.2 per cent. Details are also provided at Annex 1.

     The Census and Statistics Department (C&SD) has not made any projections on the number of jobs available or unemployment rates in 2016 and 2017. Based on the data obtained from the Quarterly Survey of Employment and Vacancies and Quarterly Employment Survey of Construction Sites conducted by C&SD, the number of persons engaged and vacancies (other than those in the civil service) analysed by industry in 2015 are provided at Annex 2.

     Furthermore, based on the data obtained from the General Household Survey conducted by C&SD, statistics on unemployment rates by previous industry in 2015 are provided at Annex 3.

(2) The Government has been providing comprehensive employment support to young people to promote their employment opportunities.  To cater for the pre-employment training and employment needs of fresh secondary school graduates, the Labour Department (LD) has launched, from May to August 2016, a special programme entitled "Career Let's go" to assist graduates in grasping the latest employment information, devising a career plan and enhancing their employability through a wide array of pre-employment training and employment services.

     In addition, graduates who would like to enter the employment market may enrol on LD's Youth Employment and Training Programme, which provides comprehensive one-stop pre-employment and on-the-job training for young school leavers aged 15 to 24 with educational attainment at sub-degree level or below without any pre-set quota. To encourage employers to provide more job openings for young people, employers who engage young people according to the programme requirements and provide them with on-the-job training will be offered on-the-job training allowance for a maximum period of 12 months.

     Separately, the University Grants Committee-funded universities provide a range of employment support and counselling services to their students. On career counselling, the institutions provide a range of services to help enhance students' understanding about themselves, assist students in planning for their future career, help them keep abreast of the job market, and equip students with knowledge of their future career prospects. Related measures and activities include recruitment talks, workshops, mock interviews, internship and mentorship programmes. On emotional support, institutions make an all-out endeavour to assist students to tackle their emotional problems through various initiatives, activities and support services. These include mentoring and peer support schemes.

     Moreover, to strengthen employment support for persons with higher education, in particular Hong Kong students who are educated in overseas tertiary institutes as well as persons from overseas with higher academic/ professional qualifications, LD will set up a dedicated employment information e-platform in the fourth quarter of 2016.  The e-platform aims to enhance their understanding of the Hong Kong labour market as well as facilitating their search and application for suitable job openings through the new dedicated webpage.

     Regarding other proposals mentioned in the question, our response is so follows:

(i) Bureaux and departments may create non-civil service contract positions having regard to their actual operational needs, and engage talents to work in the Government through an open and fair recruitment process. The Government welcomes eligible graduates to apply for these positions.

(ii) During the special programme "Career Let's go", LD will proactively canvass job vacancies suitable for graduates and organise a number of large-scale and district-based job fairs at which job seekers can have job interviews with the employers on the spot. In recruiting employers to join these job fairs, special efforts are made to encourage employers (including non-governmental organisations) to provide vacancies suitable for young people and to relax the requirements on work experience as far as possible so as to enable more fresh graduates to apply for the vacancies.

(iii) The Government has all along been closely monitoring the repayment situation of student loan borrowers after graduation and introduced, in the 2012-13 and 2013-14 Budgets, a measure to give loan borrowers who completed their studies in 2012 and 2013 the option to start repaying their student loans one year after completion of studies. Since the measure can effectively alleviate the financial burden of fresh graduates and allow them more time to secure stable jobs, it was announced in the 2014 Policy Address that the Government would make this measure a standing arrangement.

     Moreover, the Student Finance Office (SFO) of the Working Family and Student Financial Assistance Agency appreciates that individual loan borrowers may have difficulty in repaying their loans and therefore has put in place an effective mechanism for handling such situations. The relaxed deferment arrangement has been made a standing arrangement since the 2012/13 academic year. Loan borrowers who have difficulty in repaying their loans on the ground of further full-time studies, financial hardship or serious illnesses may submit, together with supporting documents, an application for deferment of loan repayment to SFO in order to relieve their loan repayment pressure. Student loan borrowers who have been granted approval for deferment of loan repayment will be allowed an extension of the loan repayment period without interest during the approved deferment period, subject to a maximum of two years. Together with the standard repayment period of 15 years, the entire repayment period can be up to 17 years.

(iv) The Government will conduct a review on the Continuing Education Fund (including the amount of subsidies) within this year.

     The Government will continue to monitor closely the employment needs of young people and examine different suggestions carefully so as to provide young people with appropriate employment support.

(3) Small and medium enterprises (SMEs) are the mainstay of Hong Kong's economy. The Government attaches great importance to the development of SMEs and provides them with appropriate support.

     Through its departments and public organisations (e.g. the Hong Kong Trade Development Council and the Hong Kong Productivity Council), the Government provides local enterprises with various support measures, including the launch of the SME Funding Schemes, provision of the latest market information and rendering of technical support and consultation services, with a view to enhancing the competitiveness of enterprises.

     To help SMEs secure loans in the commercial lending market and lower their loan cost, the Financial Secretary announced in the 2016-17 Budget that the Government would extend the application period of the special concessionary measures under the SME Financing Guarantee Scheme to February 28, 2017, reduce the annual guarantee fee rate for loan guarantee applications approved under the measures by 10 per cent, and remove the requirement of a minimum guarantee fee rate of 0.5 per cent for loan guarantee applications.

     The Government will also continue to implement various SME Funding Schemes to assist SMEs in obtaining financing, opening up markets and enhancing competitiveness. Among them, the SME Export Marketing Fund (EMF) provides financial support to SMEs in participating in export promotion activities; while the SME Development Fund (SDF) provides financial support to non-profit-distributing organisations to carry out projects which enhance the competitiveness of SMEs in general or in specific sectors in Hong Kong. The Government injected $1.5 billion into the above-mentioned Funds in 2015-16 and implemented enhancement measures, including increasing the maximum amount of funding support for each project under SDF from $2 million to $5 million and expanding the funding scope of EMF so as to enhance the support of the two funds to SMEs.

     Besides, through the $1 billion Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund), the Government provides support for enterprises in branding, upgrading and domestic sales to facilitate their business development on the Mainland. The Government launched the "ESP Easy - Simplified Application Track" (ESP Easy) under the Enterprise Support Programme of the BUD Fund in late August 2015. ESP Easy adopts a set of simplified application procedures to assist enterprises in implementing specified measures, providing more adequate support for enterprises, especially SMEs.

     The Government will continue to review its measures in the light of economic changes to provide enterprises with appropriate support.

Ends/Wednesday, June 1, 2016
Issued at HKT 15:16


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