HONG KONG URBAN COUNCIL
the rate, which is based on rental value, is therefore affected by the rent freeze.
Thus we are faced with an inflationary situation over which we have virtually no control while our major source of income is artificially held down.
Just as we welcome realistic wage scales for the men and women who run our services, so we welcome measures to hold down the inflationary trend. But we cannot avoid the financial implications. We must therefore ensure that our services are operated with the maximum efficiency so as to reduce costs. For this purpose we are considering how to evaluate the efficiency of the services which we provide to the public.
At the same time, if our main source of revenue is not going to grow in step with our costs we must ensure that all our activities which produce revenue contribute reasonably and adequately to the cost of services. Select Committees, as you, Mr. Chairman, mentioned a while ago, have been examining or are examining all their sources of revenue for this purpose. In some instances fees, charges and licences have remained unchanged for many years during which their costs have risen constantly. The Council will be considering whether charges are enough to cover the cost of administering the service concerned. The Finance Committee is also actively examining the functions of the Council to determine whether all appropriate sources of income have been tapped or whether there are certain services now provided free for which a charge could legitimately and reasonably be made.
The Council's financial position is simply one of costs increasing faster than income.
To meet the situation we must keep costs to a minimum consistent with a reasonable standard of service to the public. Since so much of our expenditure is on salaries and wages we must put labour efficiency high on our priority list.
Our Tender Board and Tender Panels also have a part to play by seeing that we get the best value for money.
We must ensure that the charges we levy are fair and reasonable having regard to increasing costs and we must levy appropriate charges for all the services we provide.
HONG KONG URBAN COUNCIL
Finally, Mr. Chairman, we must let the Government know that the Council can only discharge its duties if it has adequate resources for the job it has been entrusted with.
I now have pleasure in seconding the resolution.
MR. B. A. BERNACCHI (in English):- Mr. Chairman, as one of the prime movers to get financial independence for the Urban Council, it is still early days and times to say very much. I do think that a possible revision of the proportion of the rates allocated to the Urban Council is called for, in view of the fact that the most necessary controls on domestic accommodation have been enacted which, nevertheless, will mean the increase in rates will be lower than the anticipated yearly increases in our own expenses. I would also like to say something about the paper deficit which has already caused some comment in the newspapers. Apart from the fact that it is only a paper deficit, I think I am right in saying we do not expect to spend as much as we have budgeted for. I am also an advocate of spending reasonably as much as our expected income. Not like the Central Government's budgeting for an almost nineteenth century surplus which is then, so often, invested in such a way that Hong Kong cannot thereafter touch the capital even on capital schemes which, in consequence, have to be financed out of income!
I support the Motion.
MR. HENRY H. L. HU (in English):- Mr. Chairman, I am indeed pleased to see that Urban Council has for the first time tabled its own budget to the public. Last year, I was the Vice-Chairman of the Finance Committee; we have worked very hard to pave the way to achieve this purpose.
I have a few comments to make concerning this budget of 1974-75 of the Council:
First, the income from the yield of rates amounts to $236,580,000. Fees and charges which should be considered as the results of direct operation of Urban Council business amount to $49,964,000, roughly speaking, $50,000,000. These two items added together reach the total sum of $286,544,000, as Mr. CHEONG-LEEN just pointed out. Out of this figure, the Council serves as the Government pay-agent and will pay out the following two sums:
(a) Personal Emoluments and Allowances: $207,643,200 (69.84%, say 70%, of total expenditure) I say that the Council is the Government pay-agent because
Page 135 of 212