[Archive] Education expenditure

Following is a question by the Hon Yeung Sum and a reply by the Secretary for Education and Manpower, Professor Arthur K C Li, in the Legislative Council today (November 26):

Question:

Regarding spending on education, will the Government inform this Council:

(a) of its education expenditure as a percentage of the Gross Domestic Product in each of the past five years; and

(b) whether the authorities will reduce the respective fundings for pre-primary education, primary and secondary education, special education, post-secondary education and tertiary education for each of the school years from 2004 to 2008; if so, of the respective rates of and the reasons for the reduction?

Reply:

Madam President,

(a) For the past five years from 1998/99 to 2002/03, our expenditure on education as a percentage of the Gross Domestic Product was on a rising trend, recording 3.8%, 4%, 4%, 4.1% and 4.3% respectively.

(b) We are now working on the estimated expenditure for the various areas of education and manpower development for 2004/05 on the basis of the operating expenditure envelope for that year issued by the Financial Secretary. This is yet to be finalised. In accordance with established procedures, the estimated expenditure will be incorporated in the Government's overall draft Estimates for submission by the Financial Secretary to the Legislative Council in March next year. As for the operating expenditure envelopes beyond 2004/05, it is hoped that indicative targets can be set early to facilitate long-term planning. Having regard to the targets, I will plan for the education expenditure for the academic years concerned.

The Financial Secretary has indicated earlier to Members that the Government is now facing a large fiscal deficit, and it is imperative to reduce government expenditure to gradually achieve fiscal balance. We know that it is no easy task to eliminate the deficit. All government departments have the responsibility to drive for economy. So do all sectors of the community. The education sector cannot step aside.

Yet, as the Chief Executive has said, education is an investment and not expenditure. With economic globalisation, Hong Kong has to develop along the direction of a knowledge-based economy. We have to continue to invest heavily in education and manpower development, so as to maintain and enhance competitiveness. In respect of reduction of funding for education, we will proceed with extra care and seek to strike a reasonable balance among overall resource allocation, quality of education and long-term benefits of the community.

We have started to meet with the stakeholder groups to gauge their views on reduction of education funding and how we may do better with less.

Initially, for the university sector, we have reached a consensus with the University Grants Committee (UGC) and the institutions concerned over the reduction of about 10% of government funding for the 2004/05 academic year. We consider that the UGC-funded institutions should implement cost-control measures to help resolving the fiscal deficit problem of the Government. In fact, given the triennium funding cycle for the UGC-funded institutions, the Government has not required the institutions concerned to follow most of the other subvented bodies to meet the target of achieving efficiency savings in the 2003/04 academic year. We understand the difficulties faced by the institutions. The Government, therefore, has set up a $1 billion matching grant scheme to provide the institutions with grants to match private donations secured by them. While the institutions are expected to achieve efficiency savings of about $1.1 billion for the 2004/05 academic year, we believe that the matching grant scheme, which offers them additional resources of up to $2 billion, will help ease the impact of the funding reduction on them.

Ends/Wednesday, November 26, 2003

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