Public Consultation

We consulted the public on the following four proposals relating to the enhancement of traveller protection and facilitation of trade development between March and April 2009.
 

Proposal 1: Putting in place a mechanism with triggering thresholds to suspend or resume collection of the Fund levy
Proposal 2: Reducing the Fund levy rate to zero
Proposal 3: Increasing ex gratia payments to outbound travellers
Proposal 4: Advance authorisation by outbound travellers

The Board Chairman and Members introduced the proposals at the press conference held on 13 March 2009.

Please click here to download the consultation document; or click here to download the pamphlet.


Outcome

The Board has received 28 submissions representing the views of 421 individual respondents/companies/organisations. The majority supported the proposals. Below is the summary of the outcome:

 

Proposal 1

Proposal 2

Proposal 3

Proposal 4

Support

82% (346)

84% (352)

69% (289)

62% (260)

Non-support

8% (35)

8% (36)

19% (80)

25% (107)

Neutral / no views given

10% (40)

8% (33)

12% (52)

13% (54)

Total

100% (421)

Based on the views collected, the Board has recommended to the Secretary for Commerce, Economic and Development (SCED) to implement the following proposals:

1. Set up an adjustment mechanism to suspend or resume collection of the Fund levy: The adjustment mechanism will have two triggering thresholds. The lower one being the prudent level at $400 million and the upper buffer level at $500 million. The Board believes that the mechanism will not only enhance the transparency of the suspension and resumption of the Fund levy setting process, it will also allow a predictable and timely response to market changes. The establishment of the adjustment mechanism does not involve legislative procedures and will be set up administratively by the Board.

2. Suspend the collection of Fund levy in accordance with the adjustment mechanism: In consideration of the fact that the Fund balance has exceeded the buffer level of $500 million, the Board has proposed to suspend the collection of Fund levy to help travel agents to reduce their operating cost and to ride out the financial crisis. According to professional actuarial consultant's study, the suspension will not affect the Board's ability to meet its statutory responsibility in paying ex gratia payments even in the worst-case scenario. The Board believes that the travelling public will also benefit when travel agents pass on the reduction in the Fund levy to their clients.

3. Increase ex gratia payments to outbound travellers: The Board has proposed to increase the maximum amount of ex gratia payments in respect of expenses incurred in relation to compassionate visit and funeral services from $40,000 to $100,000 and the limit per relative from $20,000 to $25,000. Also, The Board has proposed to remove the restriction on the number of relatives eligible for making visits which is currently set at a maximum of two. The purpose of the proposal is to make better use of the Fund reserve to enhance the protection to outbound travellers. As stated clearly in the consultation document, the protection is not intended to be a substitute for travel insurance.

4. Set up advance authorisation of outbound travellers to authorise their representatives before their departure to apply for ex gratia payments when necessary: The Board considers that the Proposal will provide additional protection to the travellers, ensuring that they and their representatives can receive timely assistance. Also, if staff of travel agents are authorised in advance, it will facilitate agents to assist relatives of the injured travellers to visit the injured travellers or handle the funeral arrangement.

Implementation timetable of the four proposals

Proposal 1 : The set up of the adjustment mechanism involves administrative arrangement only. The Board will make the necessary arrangement to implement the mechanism.

Proposal 2 : The Board has recommended to the SCED to suspend the Fund levy. We are pleased to know that the SCED has accepted the Board's proposal and has consulted the Panel on Economic Development of the Legislative Council on 22 June 2009. The suspension of the Fund levy takes effect from 3 July 2009.

Proposal 3 and 4 : The Board is making arrangements to amend the relevant rules with a view to implementing the two proposals. The Board aims to introduce the amended rules to the Legislative Council for negative vetting by end 2009, for implementation in the first quarter of 2010.