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CHAIRMAN (in English):-I think Dr. Henry Hu has fully answered the main question plus all the deviations which the supplementary questions prompted. (Laughter). May I then move to the next item on the agenda.
MOTION
THE CHAIRMAN, URBAN COUNCIL, moved the following motion (in English):
"THAT the Estimates of Revenue and Expenditure for 1977-78 and the list of works which the Council proposes to undertake during the next financial year be approved for transmission to the Governor in accordance with Section 39 of the Urban Council Ordinance."
He said (in English):-
BUDGET
Once again it is budget time. The estimates of revenue and expenditure for the year 1977-78 are now presented to the Council. We thank the Urban Services Department, in particular the Senior Treasury Accountant and his Accounts Section, for the good work done in the preparation of these statements.
Rate
There will be a steep rise in rate revenue. The Council's original rate of 6% has not been increased at all. But new assessments of rateable values will cause a windfall. For this reason, in the main, there is an anticipated surplus of substantial proportions.
Secondary Revenue
Right from the start, the Council sought to strengthen our revenue base by overhauling secondary sources. We are gradually adjusting their levels in relation to costs of service and to eliminate unwarranted hidden subventions as far as it is practical to do so. This applies to government departments as much as it does to commercial operations deriving private gain at public expense.
Staff Costs
At the same time, were it not for such higher revenue all round, the Council might have been forced to fall back on the surplus accumulated since we began independent financial operation. For, side by side with the estimated revenue increase, from virtually all sources, there has also been an unremitting rise in staff emoluments and other costs, despite our tight control over numbers. Indeed, when we started, it was estimated that in 1973-74 we would spend $169 million on 14,630 staff; while in 1977-78, we are providing $284.5 million for an establishment of 15,136 persons, although actual staff strength continues to be below the limit. Thus, in four short years, the Urban Services Department is costing the ratepayer $115.5 million or 68% more for almost the same number of people. Always worthy of note is that salaries and other staff costs amount to two-thirds of our expenditure at the outset each year but usually reach about three-quarters when final accounts are rendered. Thus, as is known, our operation is labour-intensive. And, in Hong Kong, the civil service seems to expect an upward adjustment in salary scales ever so regularly, in addition to standard annual pay increments. In our not quite four years of separate existence, there were three such escalations even while Hong Kong was in recession. In these circumstances, the Council must continue to be genuinely concerned with departmental productivity and, for good and valid reason, keep strict watch on staff recruitment. We must look seriously into all possibilities of mechanization and also consider contracting out certain services to private enterprise by open competitive bidding as the ratepayer can hardly afford such inflationary progression in staff costs at frequent intervals.
Activities
Meanwhile, our expenditure on all activities still absorbs a relatively small part of the budget. It is regrettable that we have not been able to do more, though not for want of trying. We organize a wide range of community activities and are firmly resolved to sponsor more to help make life happier for all. We will press on with our quest for new ways to collaborate with many community organizations whose worthy service to the people we admire and want to support because they are often filling a lamentable vacuum with their volunteer work. For, it is our combined objective to make life more enjoyable for our citizens in the areas directly under our responsibility. Yet, much as we try, the total cost of all programmes is insignificant when compared to what we are spending on staff.
Building Projects
Of course, we are also building more physical facilities. But, our many projects carefully put together are implemented at a leisurely pace by the Public Works Department without apparently any concern for public need. Still, we are in their hands; and, it is claimed, their capacity is limited. We had the impression at the start that they would
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