Members present the president the honourable andrew wong wang-fat, O. B. E., J. P
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- MR ANDREW CHENG
- MR CHAN KAM-LAM
- DR SAMUEL WONG
DR LAW CHEUNG-KWOK (in Cantonese): Mr President, the people of Hong Kong are facing two major economic problems and are having different views on them. Some people consider that the cake has been growing too fast,and some are of the view that the cake is not being equally shared. We consider that both views are very important. I am going to discuss how this cake can be shared equally. In June 1993, the Honourable Frederick FUNG, our chairman moved a motion in this Council in respect of the gap between the rich and the poor and asked the Government to address this problem which was worsening. He moved the motion in view of the fact that, after Hong Kong's fast economic growth for over 10 years, those who were better off benefited by making investments in various ways, and their income and wealth grew by geometrical progressions, whereas the wages of the general public remained almost the same, and the Government had failed to do anything to redistribute the community's resources by means of some effective taxation, economic or social policy so as to narrow the gap between the rich and the poor. What has frustrated members of the public more is that the unemployment rate has kept on rising over the last couple of years and, in respect of wealth and income, not only are members of public not able to share the excellent economic fruit of the past, they are being dealt a heavy blow, affected as they are by the present economic slowdown and unemployment rate. In the policy address this year, the Government has put forward a series of measures to stimulate the economy and improve unemployment, including the raising of Hong Kong's level of advanced technology, the establishment of the Applied Research Centre, the Science Park, and so on. But both myself and the Hong Kong Association for Democracy and People's Livelihood (ADPL) have doubts that just by having these policies and measures economic growth can be stimulated and job opportunities for local workers can be increased effectively. Still less can I see how facilities like the Science Park can help low-skilled, unemployed workers to get hold of new job opportunities. As regards economic policies, the ADPL and I propose, first of all, that the Government should model on the economies of European countries, the United States and countries of the Asian Pacific region to set up the Economic Development Board so as to study and make recommendations as soon as possible with regard to the development of all kinds of businesses. This will ensure that the development of the Hong Kong economy and the business sector will be more balanced, the production efficiency can be promoted, more job opportunities can be created, and the gap between the rich and the poor can be narrowed. In this respect, it is our view that the present tax system is the main cause of the widening of the gap between the rich and the poor. The ADPL has also recommended that a taxation review committee should be set up to redress the unfairness in the present tax system. On the other hand, the ADPL has been paying close attention to the existence or otherwise of a level playing field where fair competition will be possible and whether the rights and interests of consumers can be safeguarded. According to the preliminary studies made by the ADPL and some other bodies, monopolization of businesses exists in many sectors, and newspapers, the Town Gas Company, airline companies, the container handling business, petroleum companies, cement companies and retirement fund management are amongst them. These have seriously hindered the operations of the free and competitive market of Hong Kong. The ADPL hopes that the Government can introduce as soon as possible legislation similar to Britain's Fair Trading Act which was enacted in 1973. The ADPL is in the process of drafting the relevant bill and is hoping to submit it to this Council for scrutiny in the form of a Member's Bill. Our purpose of doing this is that we hope to promote the free competition of the market, stimulate the economy and safeguard the rights and interests of consumers. Moreover, the ADPL also recommends that the Government should establish a fund to help start and develop small businesses in order to encourage members of the public to start their own businesses and create more job opportunities. In this connection, so long as any member of the public or enterprise is able to submit to the Government proposals to start or expand a business, such proposals being capable of creating job opportunities which is a prime target to achieve, we hope that, after reasonable consideration by the Government, the Government can arrange long-term low-interest loans for the applicant jointly with the banks. Also, high inflation rate is another economic problem that affects the livelihood of the people. In spite of the fact that the Government has been saying over the past years that it will combat inflation, the result of its efforts is not marked. The Government has even taken the lead in stimulating inflation in a number of ways, the Government's routine approval of fares increase applications of public utilities every year being one of them. Since the inflation problem has been with us for years, the gap between the rich and the poor is becoming wider. Low-income earners are not only unable to share the benefits generated by high property prices and the thriving stock market, the savings they put in the banks are earning very low interests at the rate of about 5% which, relative to the 9% inflation rate, are eroding their purchasing power so that it is actually decreasing continuously. In other words, the values of both the personal income and the savings put in the banks actually keep on depreciating. For this very reason, the Government, in its efforts to stimulate the economy, must also curb inflation so that the public's income would not cease to grow in the wake of inflation, and that their savings would not go on depreciating. The ADPL is of the view that the Government should take the lead in freezing the rent increase of public housing as well as the fares increase application of public utilities and the three railway companies, so as to fulfill the Government's commitment to combat inflation. With these remarks, I support the Honourable Allen LEE's motion. Thank you, Mr President. MR ANDREW CHENG (in Cantonese): Mr President, I will speak in support of the Honourable Allen LEE's motion. I remember that my first encounter with Mr Allen LEE happened at a university forum in which I had some heated arguments with him on a number of issues. The journalists called me "a fearless new-born calf" and said that I had made Mr LEE "become arrogant on account of his seniority" because he had repeatedly reminded me, a junior Member, of his status of being a Legislative Council Member for 17 years. However, I believe after hearing this speech of mine "Senior Fei" will be feeling good again because I support his motion. That shows that there is no everlasting enemy in politics, just as the Democratic Party has co-operated with the Liberal Party this time and both parties have put aside the differences of their political views and strived for the prosperity of the economy. Mr President, recently, with the inexorable rise in the unemployment rate and other economic uncertainties in Hong Kong, it is undeniable that the economy is suffering from a downturn. Under the present circumstances that the Government has plenty of financial resources, I hope the Government will face these problems positively and work out measures to stimulate the economy. I would like to stress that it is important to have on-the-job training and to formulate a comprehensive manpower development strategy. Hong Kong is now undergoing transformation from an economy which was led by the manufacturing industry to one which is led by the service industry. Many workers of the manufacturing industry have been eliminated and that, in turn, has led to problems of unemployment and underemployment as well as difficulties in trade switching. These situations have shown that the manpower planning of the Government is inadequate and that there is no long-term planning to tie in with the economic development of Hong Kong. Mr President, I know that the Government will prepare three reports on manpower next year which will contain a comprehensive review of the roles of the Employees Retraining Board, the Vocational Training Council and tertiary education to show its concern about the unemployment problem. However, the difficulties in finding a job and unemployment in Hong Kong are not problems which have arisen only recently and therefore I urge the Government to speed up in working out a time frame for the public and this Council and in deciding on its objectives for the future. In addition, I hope that besides preparing the reports on manpower, the Government will also concern itself with the question of giving direct funding to the Employees Retraining Board. In the financial year of 1994-95, the Employees Retraining Board had a budget deficit and the Employees Retraining Fund relied solely on levies from employers who joined the scheme of the importation of foreign labour as its source of income and so, without sufficient funds, many courses or training programmes could not be offered. Therefore, asking the Government to increase its funding for the Employees Retraining Board in its next budget is a very important move.
Mr President, to stimulate economic development, not only do we have to solve the labour problem, we also have to pay attention to the development of the local bond market. An international credit rating agency has indicated that it will continue to rate Hong Kong and Chinese companies after 1997. Yet the setting up of a local rating agency in order to safeguard Hong Kong's status as an international financial centre and to foster the development of the bond market merits consideration. Therefore, the Democratic Party urges the Government to respond to this matter positively. We know that the bond market of Hong Kong is gradually developing. For instance, the central clearing system of bonds under the Hong Kong Monetary Authority has expanded the clearing and safekeeping services to cover debt instruments issued by private companies. Besides, the Mandatory Provident Fund Scheme will also help the development of the bond market of Hong Kong. However, the Government should improve its current facilities and supervision so as to ensure that capital will flow into the bond market of Hong Kong and not into overseas markets. Undeniably, the issue of bonds by Chinese and other organizations will help to develop the bond market of Hong Kong. But it seems that the Government has not set up any monitoring system and it has no long-term strategy. This is something I would ask the Government to take note of. To conclude, under the present situation of an economic slowdown and a rising unemployment rate, I think the Government should try to resolve the various problems which I have mentioned without delay. Mr President, these are my remarks. MR CHAN KAM-LAM (in Cantonese): Mr President, according to the recently announced economic figures, the Gross Domestic Product (GDP) growth in real terms for the second quarter of 1995 is only 4.8% compared with the same period in 1994. The real growth in private consumption is even more deplorable registering a mere 1.4%. The decline of the Hong Kong economic growth rate from 6.2% in 1992 to what we have today should be a matter of public concern. The problems did not come overnight Mr President, the economic problems of Hong Kong did not emerge overnight. The Democratic Alliance for the Betterment of Hong Kong (DAB) has long been asking the Government to seriously face up to various kinds of problems brought on by Hong Kong's economic restructuring. We think that Hong Kong is now suffering from a kind of dislocation during economic restructuring. If this situation cannot be properly dealt with by some effective measures, a series of social problems will follow. As a matter of fact, a great number of entrepreneurs already relocated their factories to mainland China from Hong Kong many years ago. Since 1986, the proportion of manufacturing industries as a component of the Hong Kong economy has been continuously decreasing. Factors like high property prices and high inflation rates for all these years have contributed to the economic problems of Hong Kong toady. In order to solve the existing problems, active participation on the part of the Government is very important. However, we have not yet heard of any great plans from the Government in this aspect, but can only hear some noises of blind optimism. Be fully prepared for the future In the presence of adverse circumstances, how can Hong Kong maintain its unique edge and further enhance its competitiveness to meet the new economic situation? We think that three questions have to be considered: - How can Hong Kong co-ordinate with China in order to promote Hong Kong as a financial centre and high value-added industrial centre of China? - How can the Hong Kong Government co-operate with the business sector and the local workers with a view to providing a level playing field and enhancing the efficiency of commercial institutions? and - How can the Government upgrade the quality of local workers in order to cope with the future economic needs? Strengthening the economic ties with mainland China Mr President, dovetailing with the Mainland economy is an important aspect in the future economic development of Hong Kong. Unfortunately, most of the economic exchanges to date between the two areas are mainly handled by non-government groups and the business sector. Government support so minimal that it is not worth mentioning. The DAB has already proposed that the Hong Kong Government should set up without delay a "Bilateral Economic Development Committee" comprising both the Hong Kong and Chinese officials. The purpose is to deliberate together issues concerning cross-border economic co-operation such as how Hong Kong can accord with the economic development plan of China and how Hong Kong industry can cater to the Chinese market. But unfortunately, we can see that the leadership of Hong Kong has failed to do anything appropriate by way of improvement of Sino-British relations or cross-border co-operation. This has greatly disappointed the general public indeed. Formulation of a long-term industrial policy by the Government Furthermore, we also urge that the Hong Kong Government should study and discuss the formulation of a long-term policy in regard to industrial development as soon as possible. One question that we have to pay great attention to is how we can mobilize resources in order to help develop the local high-technology industry and suitably help develop the local manufacturing industry so that the proportion of manufacturing industry as a component of the local economy can attain an optimal level to the effect that the local economy will not overwhelmingly lean towards the tertiary industries. Sharing the same boat At present, the economy of Hong Kong is entering a low-growth period in the economic cycle. The current economic problems are brought on by economic restructuring as a matter of course and is the result of long-term cumulative neglect. The could have been nipped in the bud if there had been measures to deal with them at the early stage. I hope that the Administration can draw from the experience by formulating effective measures to stimulate the economic development of Hong Kong. Mr President, I think that Hong Kong's success in going through thick and thin for all these years has reflected the vitality of and good partnership between the businesses sector and labour sector of Hong Kong. We hope that the employers and the employees can share the same spirit of helping each other while in the same boat, boosting together the productivity and competitiveness of Hong Kong and tiding over the current difficulties so that both parties can enjoy the fruits of economic growth in the future. This indeed is the win-win proposal for a smooth and successful economic restructuring of Hong Kong. Mr President, with these remarks, I support the motion. DR SAMUEL WONG (in Cantonese): Mr President, in the 1980s there were global economic downturns and high unemployment rates in various developed countries of the West. But comparatively speaking, Hong Kong enjoyed an enviable extent of economic growth during the same period of time. The main reason was none other than the opening of mainland China, an enormous market, which stimulated a multiple-fold increase in Sino-Hong Kong trading activities. Besides, a lot of labour and land intensive manufacturing trades moved their bases northwards to mainland China. This helped to lower the operation costs and increase Hong Kong's competitiveness. During that time, the negative impact on the territory's overall economic growth indirectly caused by the linked exchange rate of the Hong Kong dollar was not very much. It was because the imported labour necessary for infrastructural development and other occupations urgently in need of workers definitely helped to curb the soaring wages. The opening of China has given rise to a great demand for the well-trained human resources of Hong Kong. In tandem with the drastic increase of commercial activities, the rental of commercial premises and the wages in Hong Kong began to rise. Unfortunately, since China implemented the "macro-economic adjustment" programme, cross-border trading activities have decreased remarkably, and the market in Hong Kong has inevitably been affected. As consumer spending decreases, it is becoming difficult for companies to do business. They may resort to laying off their staff or even terminating their businesses. From almost full employment a few years ago, Hong Kong has now become a city with an unemployment rate in excess of 3.5%. However, I believe that, after a period of time, the rental of commercial premises will certainly come down to a great extent. But I think that no one will want to see the wages in Hong Kong declining. Therefore, we can gradually see that some people will be out of job. But at the same time, there will also be some vacant positions. There are more than 100 000 unemployed while the vacant positions are roughly estimated to be between 40 000 and 50 000. Let me take the example of a skilled steel fixer from the construction industry. In early 1992, the daily wage of a skilled steel fixer was about $670. But in August this year, the daily wage has already risen to $950. The rate of increase is more than 40%. This is due to the retirement of senior skilled workers and the serious shortage of new comers who, though with different skill levels, are asking for skilled workers' wages. In other words, the wage level is raised but the productivity decreases. This has made it difficult for that occupation to survive and the request for imported labour is thus growing stronger. I think that in order to solve the existing problems of high unemployment rate and low investment incentive over the short term, apart from reviewing the retraining of manpower and enhancing productivity immediately, the best method is to expand and promote the Job Matching Scheme of the Labour Department. The present rate of success of more than 50% is indeed encouraging. Besides, with the marked expansion of the On-the-Job Retraining Scheme of the Employees' Retraining Board, there should be positive help to the 100 000 unemployed. I believe that under full development, within one year, no less than 30 000 people will benefit from these two schemes of job-matching or retraining and be successfully referred to the appropriate positions. It is possible that this will be accomplished over the short to medium term. As regards long-term planning, there are a number of ways to stimulate the economy and enhance the investment incentive of the business sector so as to increase employment opportunities in various occupations. The important things to note are: Firstly, how to enhance the local workers' basis knowledge and level of skills so as to cope with the new working procedures or product requirements? This will involve a review and forward planning of primary and secondary education in the aspect of course co-ordination such as languages, computer, mathematics and science, as well as vocational training and even tertiary education. Secondly, how to direct the business sector towards medium to high technology development? Although it has been pointed out in the Governor's policy address this year that development of technology is the only way to enhance economic competitiveness, the Government, regrettably, has not come up with any concrete policies and directions or committed any resources for that purpose. On the contrary, during the Legislative Council debate, the Secretary for Trade and Industry responded to the effect that the Administration would not actively promote technological research or consider the consultation proposal of the Legislative Councillors in regard to scientific and technological development and research. He even pointed out that the economic situation of Hong Kong was different from that of Singapore or South Korea, and thus the maximum level of support and subsidy would not be granted to the industrial sector. His words show that the Government does not have much sincerity in revitalizing the industries of Hong Kong. In regard to technological research investment expressed in terms of percentage of the Gross Domestic Product (GDP), it is 2.33% for South Korea, 1.79% for Taiwan, 1.77% for Singapore. But in Hong Kong the aggregate percentage over a number of year is only 0.05% which is indeed far too low. This figure includes the funding for technological research and the subsidy for the development of industrial technology in the past four years. When compared with the size and the progress of Hong Kong's economy, this amount is indeed negligible. If the Government is willing to allocate 0.5% of the GDP as the funding for technological development, there will be $5 billion to $6 billion per year for application and this can speed up achievements in those areas obviously bearing high development potential, such as environmental protection projects, telecommunication and video recording technology. In the policy address, the Governor mentioned that we could not be parochial about technology and research, and encouraged us to work in partnership with the new scientific generation in China. For example, the Applied Research Centre was created last year. Its special task is to support projects which involved researchers from China as well as Hong Kong. Up till now, only $11 million has been allocated to fund two applied biotechnology projects which have been identified as offering exciting potential. However, such projects of technological research are inadequate and they only have very limited effect. At the present moment, what we need is 200 research projects or $2 billion to $3 billion of funding. About 10 years ago, there was a position called Scientific Adviser in the civil service. Unfortunately, it was abolished due to personnel reasons. At present, there are positions like Political Adviser and Government Economist. But there are no advisers to assist the development of technology which is the most important aspect for the moment. Mr President, I therefore reckon that now is the best time for the Government to establish a department headed by an official of Secretary rank to be in charge of technological development affairs. With these remarks, I support the motion today. Download 0.94 Mb. Share with your friends:
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