MR YIU SI-WING (in Cantonese): Deputy President, I speak in support of the Budget this year. The Budget this year ties in with the policies in the Policy Address and puts more resources into education, welfare and medical expenses. The estimated government expenditure this year is $607.8 billion, 13% higher than the previous year, and the proportion of expenditure to revenue has increased from 90% in the previous year to 97% this year. The Government can still avoid a deficit budget. When formulating the Budget, in addition to keeping expenditure within the limits of revenues, the Government should also avoid unnecessary administrative costs. For example, although the original intention of the introduction of a $4,000 hand-out to each eligible person last year was good, the administrative procedures were too complicated, which not only incurred additional administrative costs but also gave rise to criticism of the public. The exercise was thus strenuous and unrewarding. The Government should learn a lesson and it should not repeat the same mistake.

Deputy President, the global economic situation is challenging this year and with the continuous trade friction between China and the United States, our economy is inevitably affected. However, the continuous growth in tourism can alleviate the pressure brought by external economic fluctuations and have a positive boost effect on society. I remember that after the SARS outbreak in 2003, our economy was in a downturn but the Central Authorities promptly proposed allowing travellers from China to visit Hong Kong on an individual basis, which directly benefited all related industries in Hong Kong and helped our economy rebound rapidly. This Budget reflects that the Government understands the importance of the tourism industry and is willing to introduce more measures to support the tourism industry. They include an additional allocation of $350 million to the Hong Kong Tourism Board this year, which is more than the $240 million last year. This reflects the Government's strategy to enhance Hong Kong's economic vitality through development of the tourism industry amidst the existing difficulties.

In terms of inbound or outbound tourism, the overall situation of 2018 was in fact favourable. There were 65 million inbound travellers last year, an increase of 11.4% over 2017. In respect of outbound tourism, the stamp levy increased by 8.1% over the same period last year and the number of air tickets sold has also increased significantly. However, due to the impact of the changes in the consumption patterns of local consumers and travellers from the Mainland, the performance of the retail industry is not as preferable as expected. The sales value has increased by 8.8% as compared with the same period last year but the proportion of inbound travellers is lower than the same period last year. In particular, the sales value in February this year decreased by 10.1% as compared with the same period last year, which proves that the recent retail sales is still affected by prudent consumer sentiment. The Government's decision to provide additional funding to support the tourism industry demonstrates that it has faced up to the problem.

Deputy President, the tourism industry market is being squeezed up by network sales in recent years. Together with other factors such as enhanced direct sales by suppliers and the general trend to get rid of intermediaries, business is difficult for small, medium and micro travel agents. The bosses of many small, medium and micro travel agents have to take up part-time jobs to make ends meet. However, the Government has failed to understand their actual difficulties and therefore, to my disappointment, the Budgets of these two years have not reduced travel agent licence fees. I hope that the Government will listen to the voice of the industry and reduce or waive travel agent licence fees in due course, as it has done before.

The Tourism Industry Authority ("TIA") is about to be established. The Budget this year allocates $350 million as seed capital for TIA after its establishment but I find this a very conservative amount. Referring to the current operating budget of TIA, it would be more appropriate for the Government to increase the seed capital for TIA to $500 million. Since TIA will operate on a self-financing basis in future, travel agents licence fees will be one of the important sources of its revenue. Therefore, if the seed capital has a deficit after a certain period of operation, the expenses will eventually be passed on to travel agents. TIA may then increase travel fee licence fees or other charges, which will put even heavier burdens on small, medium and micro travel agents, who are currently operating difficultly.

Deputy President, Hong Kong is an important tourist city in the region and 800 000 people are directly and indirectly employed in this sector. In order to maintain its advantages and continue to drive the development of the entire tourism industry chain, I am concerned not only about the support for the tourism industry in the Budget but also about other travel-related issues, and I hope that the financial allocation this year can achieve better results.

The first issue that I am more concerned about is related to the public toilets in Hong Kong. Last year, I pointed out at the Chief Executive's question and answer session that the hygiene conditions of public toilets in Hong Kong were bad, especially in tourist areas, which seriously affected the image of Hong Kong as an international city. I hope the Government can follow the example of the Mainland and launch a toilet revolution to comprehensively improve the hygiene standards of public toilets. This issue has the positive response of the Chief Executive and the authorities have immediately proposed to improve the public toilets in 23 tourist areas, and the projects have gradually been implemented. It is also proposed in the Budget this year that $600 million will be allocated in the next five years to renovate 240 public toilets. I welcome the authorities' emphasis on the funding arrangements for public toilets and I hope that the relevant works can be carried out as soon as possible. 

In the process of implementing the public toilet revolution, in addition to improving hardware, refurbishing old facilities and adding smart elements, the Government should also review the management and wages of outsourced cleaners, reform the tender system and introduce a reward and punishment mechanism to comprehensively improve the hygiene standards of public toilets. With the development of big data platforms, the Government can automatically count the number of toilets with higher utilization rates and peak utilization hours or demand, so as to find out the circumstances under which it is necessary to increase manpower for priority cleaning of toilets with high utilization rates, as well as provide accurate data support for new toilets in the future. The system can also be connected to the electronic toilet map to facilitate users' search of surrounding toilets, monitor the utilization of toilets and avoid queues for toilets. These functions are very useful for public toilets in places such as tourist hotspots with heavier flow of people. Today, the Secretary for Innovation and Technology is also present. I hope that the relevant policies can introduce more advanced technologies to improve the cleaning and management standards of toilets.

The second issue is related to the shortage of convention and exhibition venues. Hong Kong is the convention and exhibition centre in the Asia-Pacific region but many Asian cities such as Singapore and Thailand have also positioned the convention and exhibition industry as a key development industry in recent years. Our neighbours, namely Macao, Guangzhou and Shenzhen, have also increased investment in the hardware and software of the convention and exhibition venues, and provided many preferential conditions and supporting facilities to attract exhibitors. It can be said that the competition in the surrounding areas is rather keen and the convention and exhibition industry in Hong Kong is facing severe challenges from competitors in the region. Currently, Hong Kong's convention and exhibition industry faces the most serious problem of venue shortage. According to information provided by the Government, the annual saturation days of the Hong Kong Convention and Exhibition Centre ("HKCEC") in Wan Chai and the Asia-world Expo ("AWE") in 2018 were 75 days and 81 days respectively. The number of applications for exhibitions that were rejected because of the lack of venues was 18 and 20 respectively, and the number of rejected applications for conventions was 17 and 27 respectively.

In the past, our impression was that HKCEC in Wan Chai was saturated and AWE was slightly better because of its remote location. However, the data reflect that the extent of saturation of AWE tends to surpass HKCEC in Wan Chai. The Government has recently proposed the relocation of three government buildings in Wan Chai for the expansion project of HKCEC there. This is a good idea but the relocation work will not be completed until 2026. I guess that the expansion project of HKCEC in Wan Chai will take a long time and its completion is not expected within 10 years, let alone it availability, which will be even later. This will naturally constitute a kind of pressure.

At present, the Government is conducting a research on the expansion project of the second phase of AWE through the Airport Authority Hong Kong but it is still unknown when it will be put into use. In the short term, it can be said that there is very little supply of large-scale convention and exhibition venues in Hong Kong. Facing competition from surrounding cities, the Government must face up to the problem and formulate short, medium and long-term measures. Otherwise, Hong Kong's position as a regional conventional and exhibition centre cannot be maintained.

The third issue is related to smart tourism. The Budget this year proposes to invest $3 million in commissioning a consultancy study on smart tourism but according to information provided by the Finance Committee, the authorities have not provided clear guidelines on the requirements of the consultancy study. Although we can wait for the consultant to provide the details, the Government making the demands should have basic concepts and goals for the requirements of smart tourism.

I believe that smart tourism should take travellers, attractions and the Government as the starting points, each of which will perform different functions. From the perspective of travellers, smart tourism solutions must meet the individual needs of a large number of travellers and enhance their travel experience. In terms of attractions, obvious improvements should be made in the management, operation, services and quality of attractions through application of technology. For the Government, it can obtain information on the consumption behaviours and sightseeing habits of travellers, as well as transportation, through the collection and analysis of big data, which will serve as the scientific basis for formulation of tourism-related policies. I hope that the Government can comprehensively sort out smart tourism through this consultancy study and formulate specific solutions for the future.

The fourth issue is related to harbourfront enhancement. The Budget this year will earmark $6 billion for developing new harbourfront promenades and open space, and for improving harbourfront facilities. It is the Government's plan to extend the length of the harbourfront promenades from the current 20-odd km to 34 km in about 10 years, and provide 35 hectares of open space on both sides of the Victoria Harbour. Deputy President, the indicators for harbourfront enhancement cannot be restricted to the length and area of the waterfront only. The more important indicators are the overall planning and overall impression. We cannot give full play to the characteristics and advantages of the Hong Kong waterfront unless the harbourfront areas are opened and connected systematically. For example, the waterfront areas from the Western District to Chai Wan are very distinctive but due to geographical and historical reasons, they are yet to be connected at present. If the Government can make up its mind to give priority to and work out plans and timetable for the connection, this will definitely be welcomed by the public and travellers.

In terms of the mode of operation, the Government also has experienced some success which is worth learning from. The public-private partnership and the Avenue of Stars are successful examples of harbourfront enhancement. The New World Development Co., Ltd. initially invested $40 million in the construction of the project and it was responsible for managing the venue for 20 years. It also cooperated with the film and tourism industries to turn the attraction into a local landmark, which has now become the most popular tourist attraction in Hong Kong.

The district-led model is an alternative. The Signature Project Scheme―Harbourfront Enhancement and Revitalisation at the Western Wholesale Food Market is a project carried out by the District Council. The project is supported by the vendors in the original wholesale market and the harbourfront area of the operating wholesale market is released to provide characteristic harbourfront open spaces. The project collects opinions from the public which serve as the bases for the planned use and design. Under the leadership of district organizations and by the District Council, the project is more easily supported by local residents and can meet the actual needs of the public. As the harbourfront in Hong Kong is an irreplaceable natural resource, the Government should cherish it and make good use of it to make this Pearl of the Orient more glamorous.

The fifth issue is related to Hong Kong Disneyland. Hong Kong Disneyland has recorded losses for four consecutive years. The attendance in the fiscal year 2018 increased year-on-year by 8% to 6.7 million. Although it was lower than the peak attendance of 7.5 million, the total revenue increased year-on-year by 18% to $6 billion. The earnings before EBITDA were $1.35 billion, increased year-on-year by 48%, the highest earnings since the opening of Hong Kong Disneyland. There was still a loss of $54 million, though. According to the agreement between the Walt Disney Company and the Hong Kong Government, regardless of whether Hong Kong Disneyland has incurred losses or profits, it has to pay royalties and management fees to the Walt Disney Company. This agreement is very unfair indeed. In the next few years, Hong Kong Disneyland will invest $10.9 billion into the expansion project and the total revenue will definitely increase. I think it is very unfair for Hong Kong Disneyland to continue to pay management fees and I hope that the Government will continue to strive for the waiver of management fees or royalties in case Hong Kong Disneyland suffers losses.

Deputy President, I so submit.