28. I am fully aware that employment continues to be the focus of public concern. As the economy picks up, we expect a further drop in the unemployment rate this year. However, as a result of globalisation, structural unemployment has been caused by a serious mismatch of human resources. At present, the average unemployment rate for jobs requiring high academic qualifications and skill levels stands at 2.5% to 3%, basically representing full employment. Logistics management, purchasing, information technology and financial services sectors are experiencing an increasingly tight manpower situation and salaries are beginning to rise. On the other hand, low-skilled jobs are in short supply, with the related unemployment rate still standing at 7.5% on average. A manpower projection study conducted in 2003 estimated that by 2007 our workforce would face a shortage of over 100 000 well-educated persons but a possible excess of 230 000 workers with relatively low educational attainment. In anticipation of changes in the job market, we vigorously encourage both job seekers and employees to upgrade themselves by learning. Our educational institutions are offering additional associate degree programmes and diploma courses. The Vocational Training Council and the Employees Retraining Board will continue to improve and modify their courses to meet the demands of the employment market. Through the implementation of the Youth Pre-employment Training Programme, the Youth Work and Experience Training Scheme and other initiatives, we will continue to provide training for young people to help them enter the job market and develop their potential.

29. At present, more than 200 000 people in our community are still unemployed. We must face up to this problem. The prime consideration of our governance is to promote employment. Our first task is to promote economic growth. Taking tourism as an example, the construction works for Hong Kong Disneyland are now in full swing, and provide some 11 000 jobs. Upon its opening in September, the theme park and the associated hotel, catering and retail businesses will employ 18 000 people. We understand that 36 new hotels will be completed between now and 2008. Their construction will employ more than 10000 workers. Upon their opening, about 8000 service-related jobs will be created. The development of tourism will also result in more jobs in the retail and catering sectors. The two airlines in Hong Kong will increase their fleets and employ an additional 3 000 people over the next two years.

30. We will carry on with our average annual allocation of $29 billion for capital works, providing employment for about 4 200 professionals and technicians and some 41 000 construction workers per year. Meanwhile, the Government will implement projects for which employment is one of our considerations. These are municipal projects in various districts, promotion of urban renewal and redevelopment, greening initiatives, decking of nullahs and promotion of the environmental industry. I will provide further details. In addition, we will extend about 10 000 temporary contract jobs in the public sector to meet operational needs.

31. Members may recall the measure I announced on Labour Day in 2003: for Government service contracts that rely heavily on low-skilled workers, tenderers must offer non-skilled workers wages that are not lower than average market rates. This requirement represents a step forward for protecting wages for workers at the basic operating level. The Government does not tolerate, and will crack down heavily on, those employers who use improper ways to undermine this protection.