CITY University has shelved a proposal to equalise benefits for locals and expatriates, leaving the problem unlikely to be resolved until after 1997. The university had proposed the replacement of housing benefits with standard cash allowances - a system similar to that of the Hospital Authority. The proposal was raised after objections to a plan to equalise benefits by simply scrapping better terms for expatriates, who face less stringent criteria for accommodation entitlement. Chairman of the university's staff association, Dr Chan Yan-chong, said the university council supported the cash allowance proposal in principle. But the council recently decided to shelve the plan after consulting other tertiary institutions which offer different benefits for locals and expatriates. Dr Chan said they were told by Professor Cheng Yiu-chung, Vice-Chancellor of the Chinese University - which has decided to scrap some expatriate benefits for new recruits - that his institution did not favour the proposal. Professor Cheng said the Government might object to cash allowances because staff terms at subvented institutions should not be above those for civil servants. Civil servants are not offered the option of cash allowances to replace housing benefits, and there has been no agreement on equal terms. Dr Chan said: 'The problem of different benefits for overseas and local staff has existed for more than 100 years . . .it does not matter if we have to wait for two more years and discuss the problem again in 1997.'