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urban districts. In any case, the surplus is only temporary because it is not the Council's intention to salt money away. Money has to be used here for the good of the people. In fact, the Council is trying its best to speed up all its many schemes. They will cost far more money than the Council has at the moment. But, it is an engagement which the Council must accept if it is to make Hong Kong a better place for all its citizens.
All the same, because rentals eat up such a terribly high part of the normal family income in Hong Kong, the revaluation of tenancies for taxation will mean that the bulk of our people will have to make even more sacrifices in their way of life. And, little or no time is being given to local families to make the inevitable adjustments in their day-to-day expenditure. It is not surprising then that their peace of mind is upset. There is grave disquiet. Consequently, there can be no doubt that relief must be given to the people.
While it is claimed that the reassessment of tenancy values for rating purposes is a professional exercise, yet its effect is a social issue of major importance. And, because it is so without doubt, the decision on the extent and manner of its application is political, for not only must fiscal needs be considered but social and economic consequences as well.
All in all, the Council is very anxious to do all in its power to lighten the burden of the people. Long and serious discussions have taken place and are still going on. How to act properly to reduce the heavy hardship the new rates will impose on local householders? The people surmised all along that the Council would help them. For, the Council has never been greedy to get money. Certainly, it does not grab money from the people. It never asked for the new rates. It will use whatever it can for the good of the community because there is so much that is lacking here. And, it will also give back to the people what is rightly theirs.
In the circumstances, the Council is considering a scheme to help the people to the limit of its ability. It will be sailing very close to the wind in the coming financial year and even risking a potential deficit in doing so.
Because all departmental overheads rise very quickly, and the Council has a great number of works in the offing, all to be paid for in the next few years, it must be guaranteed that it will have the funds to meet its obligations; therefore, it wants to be assured that its own rate percentage will be restored to the original 6% in short order. This is a fair and reasonable condition. All financial projections and other calculations are based on what this rate participation will produce in revenue over a good number of years and commitments have been made on paper as the Council must do way ahead of time. Also, provided that each rate percentage point will yield the revenue ($84m) that the Government has advised the Council some months ago to take into account in the preparation of its 1977-78 budget since adopted, the Council will consider voluntarily cutting its rate percentage drastically in order to help the mass of our people. It is suggested that it be fixed at 4% for 1977-78 to be progressively raised by one percentage point each year until it is back to 6% in two years' time.
Thus, subject to the Standing Committee of the Whole Council agreeing to do so, the following sliding scale may be applied to determine the Council's rate percentage:
financial year 1977-78 1978-79 1979-80
percentage 4 5 6
This measure demonstrates in practical form the Council's genuine concern for the well-being of the people and its earnest wish to soften the blow which the new reassessment of rateable values has caused householders in the urban areas even though in 1977-78 the Council's operations are not expected to break even as a result. Indeed, its estimate of revenue would then be $425m against projected expenditure of $447m. In effect, the Council is reducing its next financial year's rate revenue by $168m or one-third. In this connection, it is well to compare this reduction amounts to just half of the Council's 1976-77 gross revenue from the rate and all other sources. So it is a big cut. The Council takes this action solely for the benefit of the people of Hong Kong.
Policy
On any public issue in which it has a part, the Council must reach its own conclusion in a rational way after analysing the whole situation responsibly. It should not react in a panic on any account. Nor should it submit to coercion from any quarter. When it has decided what its public duty is, it should act accordingly, without fear or favour.
The question was put.
The motion was carried unanimously.
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