Following is a question by the Hon Starry Lee and a written reply by the Secretary for Transport and Housing, Mr Frank Chan Fan, in the Legislative Council today (November 21):

Question:

     At present, the Marine Department levies, pursuant to the law, a passenger embarkation fee at $11 per passenger from the owners of cross-boundary ferries, and such a fee is passed on to the passengers. There are comments that with the economies within the Guangdong-Hong Kong-Macao Greater Bay Area growing and integrating in an increasingly fast pace, the governments of the three places have all indicated that they will actively remove the various obstacles for exchange and co-operation. However, among the three governments, only the Hong Kong Government collects a passenger embarkation fee, which is not conducive to the connectivity and economic integration of the three places. Moreover, there are views that as a similar passenger boarding fee has not been imposed on the various modes of cross-boundary land transport in Hong Kong at present, the embarkation fee is unfair to those passengers departing by sea. In this connection, will the Government inform this Council:

(1) of the number of passenger trips departing by cross-boundary ferries and the total amount of embarkation fees collected in each of the past three years, with a tabular breakdown by ferry route;

(2) of the measures taken by the Government in the past three years to promote sea transport connectivity among Guangdong, Hong Kong and Macao, as well as the effectiveness of such measures; and

(3) whether it will review the current policy of levying a passenger embarkation fee, including whether that fee should be abolished; if it will, of the details; if not, the reasons for that?

Reply:

President,

     Cross-boundary ferry services, being one type of cross-boundary transport services, help promote the connectivity at sea between Hong Kong and the Pearl River Delta (PRD) region. With the development of the Guangdong-Hong Kong-Macao Greater Bay Area, the Government will continue to closely monitor the development of, and demand for, cross-boundary transport services (including cross-boundary ferry), and will adopt measures in a timely manner to meet the needs of the community.  

     My reply to the various parts of the Hon Starry Lee's question, after consulting the Financial Services and the Treasury Bureau as well as the Marine Department (MD), is as follows:

(1) and (2) At present, there are three cross-boundary ferry terminals in Hong Kong owned by the Government. Two of these terminals are managed by the Government (namely the Hong Kong-Macau Ferry Terminal and the China Ferry Terminal), providing a total of 14 routes of cross-boundary ferry services connecting Hong Kong and Macau Outer Harbour Ferry Terminal and Taipa Ferry Terminal, as well as 12 Mainland cities (including Zhuhai (Jiuzhou Port), Zhuhai Guishan, Zhongshan, Panyu Lianhuashan, Nansha, Heshan, Shunde, Gaoming, Jiangmen, Doumen, Shekou and Shenzhen Airport). The other cross-boundary ferry terminal (namely the Tuen Mun Ferry Terminal) is managed by a private operator, providing specified route between Hong Kong and Macao.  The operator may provide cross-boundary ferry services between Hong Kong and other PRD cities having regard to commercial principles. At present, a cross-boundary ferry route between Hong Kong and Zhuhai (Jiuzhou Port) is operating at this terminal. The annual passenger departures and embarkation fees collected for the aforementioned cross-boundary ferry routes between 2015 and 2017 are set out at the Annex.

     The patronage of cross-boundary ferry services has been stable in recent years, reflecting that there is a continuous demand from visitors for cross-boundary ferry services. In the past three years, at the request of the ferry operators, the Government approved an additional nine trips per day in total by the operators for routes between Hong Kong and Taipa Ferry Terminal in Macao, Zhuhai and Shekou, as well as the introduction of a new route between Hong Kong and Shenzhen Airport (chartered service).

     On the other hand, the MD reviews the utilisation of cross-boundary ferry terminals from time to time with a view to enhancing the operation and facilities of the terminals, thereby encouraging more passengers to use cross-boundary ferry services. The relevant measures include enhancing the mechanism for allocating berthing slots for optimal use of each berth so as to increase the number of sailings that can be handled and the patronage; enhancing the berths and passenger facilities so as to raise the operational efficiency of ferry operators; and arranging additional terminal-based staff during peak periods of passenger flow and on festive days so as to respond to emergencies and maintain the order at the terminals. The MD also holds regular meetings with stakeholders for the sake of enhancing the operational efficiency of cross-boundary ferry terminals.

(3) Under regulation 34 of the Shipping and Port Control (Ferry Terminals) Regulations (Cap 313H), a passenger embarkation fee shall be paid to the Government by the owner of a ferry vessel in respect of each passenger embarking on the ferry vessel at cross-boundary ferry terminals. At present, the embarkation fee is $11 per passenger. Ferry operators will determine the ferry fares on commercial principles.

     Cross-boundary ferry terminals are one of the public utilities owned by the Government. It is the Government's established policy that charges of Government-owned public utilities should in general be set at a level to recover the full cost for the provision of services, including the cost of the capital employed. The passenger embarkation fee is charged to recover the relevant cost of providing the ferry terminal services. The Government has an established mechanism to regularly review the level of passenger embarkation fee having regard to various relevant factors including public acceptance and affordability.

     Following is a question by the Hon Jeffrey Lam and a reply by the Secretary for Transport and Housing, Mr Frank Chan Fan, in the Legislative Council today (Nov 21):
 
Question:
 
     Some members of the public have relayed that with the interest rates rising gradually and the Sino-United States trade conflicts intensifying, the local property market may have entered a downward cycle in recent months, and the various demand-side management measures (commonly known as "harsh measures") implemented by the Government to address the overheated property market have become outdated. In this connection, will the Government inform this Council:
 
(1) whether it will examine relaxing the loan-to-value ratios for mortgage loans to make it easier for members of the public to acquire their first property or replace their existing property, and enable small and medium enterprises to get more operating capital through securing loans by collateralising their properties;
 
(2) whether it has assessed if the harsh measures will exacerbate the fall in property prices when the property market is in a downtrend; if it has assessed, whether it can submit the relevant report to this Council; and
 
(3) given that a Hong Kong permanent resident who disposes of his or her only original residential property within 12 months from the date of acquisition of a new residential property may apply for a partial refund of the ad valorem stamp duty payable at the time of acquisition of the property which is equivalent to 15 per cent of the property price, whether the Government will change such a taxation arrangement so that persons who acquire a new residential property as replacement are required to pay additional stamp duty only if they fail to dispose of their original residential property within 12 months, so as to alleviate their burden when acquiring properties; if so, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     Maintaining the steady development of the private residential property market is one of the important objectives of Government's housing policies. In the past few years, due to tight housing demand-supply balance and the continued ultra-low interest rates environment, local property prices have been on the rise, with heightened risk of a bubble. The Government has adopted a two-pronged approach by striving to increase land and housing supply to meet demand, and introducing several rounds of demand-side management measures as and when necessary to suppress external demand, short-term speculative demand and investment demand, with a view to stabilising the property market and preventing adverse consequences arising from an exuberant market. The Hong Kong Monetary Authority (HKMA) has also introduced several rounds of counter-cyclical macro-prudential measures to strengthen risk management of banks and resilience of the banking sector to cope with any possible impact in the event of a fall in property prices.
 
     Having consulted the Financial Services and the Treasury Bureau, the Inland Revenue Department (IRD) and HKMA, I set out my consolidated reply to various parts of the question raised by the Hon Jeffrey Lam as follows:
 
(1) The intent of HKMA's counter-cyclical macro-prudential measures is to ensure stability of the banking system through implementation of appropriate measures according to the development of the property cycle, taking into consideration key factors such as the trend of property prices, property transaction volume, economic fundamentals and the external environment. HKMA will consider appropriate relaxation of the counter-cyclical measures if a downward cycle in the property market is confirmed. However, as property prices had risen by more than two times since 2008 and decreased by only about 1.5 per cent in aggregate in the past two months, HKMA has not yet determined that the property market has entered into a downward cycle, and therefore does not consider it appropriate to relax the counter-cyclical measures at this juncture.
 
(2) The Government has introduced several rounds of demand-side management measures to suppress short-term speculations, investment demand, and external demand through increasing transaction costs, with a view to reducing exuberance of the property market, preventing adverse consequences arising from an overheated property market, and ensuring healthy development of property market in the long run. Property prices are affected by various factors, including global and local economic environment, interest rates trend, market atmosphere, housing demand-supply situation, etc. It is not possible to weigh the impact of individual factors or measures on property prices.
 
     Although prices and transaction volume of private flats have subsided in recent months (note 1), local housing is still in the state of demand-supply imbalance and the current property price level remains out of line with economic fundamentals and the general public's affordability. The home purchase affordability ratio (note2) in the third quarter of 2018 stayed high at 74 per cent, well above the 20-year long-term average of 44 per cent from 1998 to 2017. The Government has no intention to relax or withdraw any demand-side management measures at the moment, lest this would send a wrong message to the market and make the property market more exuberant.
 
     The Government will remain vigilant and make reference to a series of indicators, including property prices, home purchase affordability ratio, transaction volume, housing supply, local and global economic changes, etc., and closely monitor the developments of the property market and the evolving external environment. The Government will take appropriate actions as and when necessary with a view to ensuring a steady development of the property market.
 
(3) According to the Stamp Duty (Amendment) Ordinance 2018 as passed by the Legislative Council in early 2018, a Hong Kong permanent resident (HKPR) who replaces his only residential property in Hong Kong by acquiring a new property before disposing of the original property can apply to IRD for partial refund of ad valorem stamp duty if the original property is sold within 12 months after acquiring the new property.
 
     The Government considers that the prevailing refund arrangement has struck a right balance between taking care of the needs of HKPRs in replacing their properties and safeguarding the effectiveness of the demand-side management measures. We have no intention to relax the refund mechanism, lest this may be speculated by the market as a signal from the Government to "water down" the demand-side management measures, thereby resulting in a more exuberant market.
 
Note 1: According to information of the Rating and Valuation Department, the overall price index of private flat has subsided since August 2018, registering a cumulative drop of 1.5 per cent in August and September. Property transactions have also declined in recent months. The monthly average number of sale and purchase agreements for residential property received by the Land Registry from August to October 2018 was about 4 200, below the monthly average of about 5 700 in the first seven months this year.
 
Note 2: Home purchase affordability ratio refers to the ratio of mortgage payment for a 45-square metre flat to median income of households (excluding those living in public housing), at the prevailing mortgage rate for a tenure of 20 years.

     The Centre for Health Protection (CHP) of the Department of Health is today (November 21) closely monitoring four additional cases of Middle East Respiratory Syndrome (MERS), including one death, reported to the World Health Organization (WHO) by the Kingdom of Saudi Arabia (KSA) between October 16 and 30, and again urged the public to pay special attention to safety during travel, taking due consideration of the health risks in the places they visit.
 
     According to the WHO, all the four male patients, aged 53 to 74, had underlying illnesses and two of them had contact with camels and consumed camel milk.

     According to the latest information, 2 266 cases have been reported to the WHO (with 804 deaths), including 2 047 in 10 Middle East countries comprising 1 888 in the KSA, 87 in the United Arab Emirates, 28 in Jordan, 19 in Qatar, 11 in Oman, six in Iran, four in Kuwait, two in Lebanon, and one each in Yemen and Bahrain.

     "We will maintain close communication with the WHO and relevant health authorities," a spokesman for the CHP said.

     "Travellers to the Middle East should avoid going to farms, barns or markets with camels; avoid contact with sick persons and animals, especially camels, birds or poultry; and avoid unnecessary visits to healthcare facilities. We strongly advise travel agents organising tours to the Middle East to abstain from arranging camel rides and activities involving direct contact with camels, which are known risk factors for acquiring MERS Coronavirus," the spokesman said.

     Travellers to affected areas should maintain vigilance, adopt appropriate health precautions and take heed of personal, food and environmental hygiene. The public may visit the MERS page of the CHP and its Travel Health Service, MERS statistics in affected areas, the CHP's Facebook Page and YouTube Channel, and the WHO's latest news for more information and health advice. Tour leaders and tour guides operating overseas tours are advised to refer to the CHP's health advice on MERS.

     A jade crafts shop owner was sentenced to imprisonment for two weeks suspended for one year and was ordered to offer $10,000 in compensation to a victim today (November 21) at Eastern Magistrates' Courts for supplying fake jade with a false trade description, in contravention of the Trade Descriptions Ordinance (TDO).

     Hong Kong Customs earlier received information alleging a jade crafts shop in Sheung Wan made a false claim and sold a jade product which was claimed to be a specific type of jade. 

     After examination, it was confirmed that the product was man-made glass, different from what had been declared.

     Customs reminds traders to comply with the requirements of the TDO and consumers to procure goods from reputable shops.

     Under the TDO, any person who supplies goods with a false trade description in the course of trade or business, or is in possession of any goods for sale with a false trade description, commits an offence. The maximum penalty upon conviction is a fine of $500,000 and imprisonment for five years.

     Members of the public may report any suspected violations of the TDO to Customs' 24-hour hotline 2545 6182 or its dedicated crime-reporting email account (crimereport@customs.gov.hk).

     Following is a question by the Hon Holden Chow and a written reply by the Secretary for Commerce and Economic Development, Mr Edward Yau, in the Legislative Council today (November 21):

Question: 

     The Customs and Excise Department has been adopting a three-pronged approach (i.e. compliance promotion, law enforcement, as well as publicity and education) for implementing the Trade Descriptions Ordinance (Cap 362) (the Ordinance). Some frontline staff members have relayed that the Ordinance has an extensive scope and the relevant workload is heavy, but the manpower for implementing the Ordinance has not increased in the past three and the current financial years, which has been maintained at 190 persons. As a result, their work pressure has been increasing day by day. In this connection, will the Government inform this Council:

(1) on law enforcement for the Ordinance, of the respective numbers of (i) prosecutions and (ii) convictions during the period from October last year to October this year; 

(2) of the respective manpower currently deployed for performing work on (i) compliance promotion, (ii) law enforcement and (iii) publicity and education, in respect of the Ordinance; and 

(3) whether it has plans to increase, in the next financial year, the staffing establishment for implementing the Ordinance? 

Reply:

President,

     The Government attaches great importance to protecting consumer rights. The Trade Descriptions Ordinance (Cap 362) (the Ordinance) prohibits specified unfair trade practices deployed by traders against consumers, including false trade descriptions, misleading omissions, aggressive commercial practices, bait advertising, bait-and-switch and wrongly accepting payment. The Customs and Excise Department (C&ED) is the principal agency to enforce the Ordinance. It has been adopting a three-pronged approach in enforcing the Ordinance proactively, which include conducting briefings for and visits to traders to tender advice and guidance to them on the legal requirements under the Ordinance and measures that should be taken for compliance; taking necessary and timely enforcement actions to combat unfair trade practices; and launching extensive publicity and education programmes to raise consumers' awareness of unfair trade practices through joint efforts with the Consumer Council.

     My reply to the three parts of the question is as follows:

(1) Between October 2017 and October 2018, C&ED initiated 90 prosecutions under the Ordinance, among which 66 cases resulted in convictions, while court proceedings are in progress for 14 other cases. 

(2) At present, 190 officers of C&ED are responsible for the enforcement of the Ordinance. Depending on the actual circumstances, C&ED will deploy manpower flexibly for compliance promotion, enforcement action as well as publicity and education work to implement the Ordinance. It is difficult to quantify the manpower deployed for each task separately. 

(3) As the Ordinance covers a wide range of goods and services, in order to facilitate traders' compliance and optimise the use of enforcement resources, C&ED adopts a risk-based approach under which priority is accorded to handling cases that may have significant implications on consumers, the trades or the community at large. C&ED will review the manpower establishment from time to time in view of the implementation situation of the Ordinance, and will ensure that the Ordinance is enforced effectively through manpower redeployment or application for additional resources according to established procedures when necessary.