The Executive Council approved yesterday a proposal to extend the waiver period for the foreign-maid levy from two to five years.

As a relief to the middle class people who hire most of the foreign domestic helpers, the government had suspended the levy in July for two years.

Before that, employers had to pay a levy of HK$9,600 for a helper's two-year contract. The levy was introduced to subsidize the retraining of local workers.

Legislator Regina Ip recently moved for a motion to scrap the levy because it is opposed by the middle class.

However, Legislator Ip Kwok-him said the levy should not be scrapped, and he instead tabled another motion to extend the waiver period to 2013.

The government's announcement yesterday pre-empted Regina Ip's motion.

Secretary for Labour and Welfare Matthew Cheung said the government decided to extend the levy waiver after considering the financial turmoil, public views and the financial condition of the Employees Retraining Fund.

"In our view, the further extension strikes the right balance between providing continued relief to the middle class and meeting the needs of our local workers for training and retraining services," he said.

The new levy suspension will apply to all employment visas issued between Aug 1 of this year and July 31, 2013, including new contracts and renewals of existing contracts.

He maintained that levy collection is essential in ensuring steady finances for the Employees Retraining Board to train the local workforce.

The extension of the levy suspension requires an amendment to the Employees Retraining Ordinance, which will be tabled by the Legislative Council for discussion today.

Welcoming the government decision, Ip Kwok-him said the government has listened to the opinion of society, and he said he believes the right decision was made.

He said the levy has some significance and did not recommend a complete scrap.

Foreign domestic helpers also welcomed the levy extension.

A representative said this could ease the financial pressure of employers and lower the chances of helpers getting fired.

K K Leung, chairman of an association that helps Indonesian maids, the Hong Kong TKI Association, said the extension of the levy waiver is good news.

"The extension gives room for discussion in society after five years," he said.

For example, if the economy continues to be bad in five years, the government could decide whether to further extend the levy and review the amount of the levy, he said.

Unlike some legislators, Leung said the levy extension isn't a farce.

"I think the government is willing to listen to different views," he said.

Hong Kong Employments of Domestic Helpers Association Chairman Joseph Law, however, thinks the government should scrap the levy for good.

The intention of the levy is to target companies that hire many foreign helpers, and it is inappropriate to use the levy on foreign domestic helpers, he said.

He said he is worried that the government will resume the levy after the extension ends.

(HK Edition 11/12/2008 page1)