With the advent of globalisation, Hong Kong is rising to the challenges brought about by economic restructuring. Despite continued improvement in the employment market, with the unemployment rate coming down from the record high of 8.6 per cent in mid-2003 to 6.5 per cent at the end of 2004, employment continues to be a subject of public concern. With a proactive and pragmatic approach and given united efforts, the Labour Department has achieved notable results in various programme areas.

We continue to adopt a proactive, innovative, flexible and cost-effective approach in further strengthening our employment service to help the unemployed re-enter the labour market and meet the recruitment needs of employers. Ten large-scale job bazaars and 32 mini job fairs were held in the year to assist job-seekers in finding jobs and employers in recruiting staff. A record high of 86 257 placements were secured through the Labour Department in 2004. The number of vacancies solicited from the private and public sectors, at 302 961, also broke past records. The Interactive Employment Services (iES) website (http://www.jobs.gov.hk) recorded a historic high of 684 million page views in 2004 and continued to be the Government's most popular website.

With a funding of $30 million, the YSSS was launched on a trial basis in May 2004 to train and assist 1 500 young people aged 18 to 24 to become self-employed in areas with business prospects, such as information technology and multimedia applications, personal care and public performances. As at the end of December 2004, the trainees have conducted 1 420 business transactions with gross profits of about $940,000 recorded.

YWETS was launched in July 2002 to provide on-the-job training of six to twelve months for young people aged between 15 and 24 with educational attainment below degree level. With the enthusiastic support of employers and social partners, the target to provide 10 000 training places for young people in two years was achieved in November 2003. Given this success, another $300 million has been allocated to extend the scheme for another two years to place an additional 10 000 youths into jobs. As at the end of December 2004, 18 283 trainees were successfully placed in training vacancies under the scheme. In addition, 10 925 trainees were placed in other jobs in the open employment market with the advice and assistance of their case managers.

In 2004, the Labour Department continued to accord a high priority to combating wage offences. Territory-wide inspection campaigns targeted at offence-prone trades were launched. The Employment Claims Investigation Division continued to conduct in-depth investigation into suspected wage offences in order to take out speedy prosecution. The department also strengthened its educational and promotional efforts to remind employers of their statutory obligation to pay wages on time and to encourage employees to lodge claims promptly and come forward as prosecution witnesses. With rigorous enforcement efforts, a total of 504 convicted summonses on wage offences were secured in 2004, up 13.3 per cent when compared with 445 convicted summonses in 2003. The highest fine recorded in a case involving wage offences in 2004 was $140,000, as compared with $50,000 in 2003.

In November 2004, we extended the pilot VRP for injured employees in the construction industry to the catering, transport and manufacturing industries so that more injured workers could be benefited. The VRP was launched in March 2003 on a pilot basis in the construction industry with the objective of providing timely rehabilitation services to injured workers for better and speedier recovery, and facilitating their safe and early return to work. The pilot programme has shown positive results in achieving its objectives and has facilitated the rehabilitation of 147 construction employees in its first year of implementation.

As Hong Kong's economy further improved, the number of applications for the Protection of Wages on Insolvency Fund dropped from 22 350 in 2003 to 13 631 in 2004. The fund recorded an average monthly surplus of $4.08 million in 2004 and registered an overall surplus of $49 million by year-end, the first year that the fund recorded a surplus since the Asian financial crisis in 1997.