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HONG KONG URBAN COUNCIL
have turned a deaf ear to the Council's pleas to protect the ratepayer, although admitting the inequitable situation they have created for the Council. The Government is saving money for doomsday while denying the ratepayers their just dues.
Even if the Council stopped completely all building works and allowed all its markets, toilets, playgrounds, swimming pools and numerous physical facilities to run down without maintenance, and in addition ceased all cultural, educational, recreational and entertainment activities altogether, it would still be in the red in all probability, so heavy is its commitment to staff salaries. Lest it be misunderstood, the number of staff employed by the Council has grown well below the annual average of the civil service as a whole. This is due to strong control on expansion and constant concern for output of work. But there is a limit to what the Council can do on its own to safeguard the position. It is now up to the ratepayers to call the tune.
I so move.
MR. H. M. G. FORSGATE, VICE-CHAIRMAN OF THE FINANCE SELECT COMMITTEE (in English):-Mr. Chairman, in seconding your motion, it is gratifying to read that the Director of Audit has given this Council a clean bill of health and this reflects on the diligence of the various departmental officers who have handled our financial affairs in a responsible and effective manner. However, this satisfaction should not be allowed to lull us into a sense of false security. The near breakeven situation this year with expenditure nearly equalling revenue will be converted into a thumping deficit of over $200 million next year, and escalating dramatically thereafter. Our critics might state, cut down on expenditure. But this is not a viable alternative for the following reasons. Staff wages and other costs have doubled until they absorb over 80% of our revenue. Our revenue derived mainly from rates, will remain almost stationary until a revaluation exercise takes place, and this is outside our control. Our only recourse is to restore our percentage of the rate back to 6% where it was before we reduced it two years ago, and go beyond this to 8%. Other formulae suggested to Government have been rejected. If we try to balance our budget without increasing our revenue, drastic measures would be required. Such as stoppage of all capital projects. These have already been severely modified. Stop all expenditure on entertainment and sporting events. Reduce staff cost by a cutback on street cleaning, rubbish collection and so on. In other words, a stop/go policy that would make nonsense of our responsibilities and seriously affect the very people we serve. The dramatic increase in staff and other costs is not within our control. Only a commensurate rise in income will solve the problem. To achieve this, I see no alternative other than to seek a rise in our proportion of the rate to enable us to carry out our function in a responsible and effective manner. I second the motion before the Council.
HONG KONG URBAN COUNCIL
CHAIRMAN (in English):-Thank you. Discussion?
MR. HOWARD H. W. YOUNG (in English):-Mr. Chairman, in reading the statement attached to the Accounts which we are adopting, specifically Statement 2, I notice there are three major areas where savings have occurred by spending less than was originally intended. One of the areas is in planning and development where the original budget was $103 million but actual expenditure $57.6 million. The reasons for this have been well explained both in these Chambers and at various committee meetings. One of the reasons is, of course, the inability of PWD to complete projects which we have planned and it has been pointed out more than once that this sort of so-called saving is really false economy in the long run. However, there are two other areas which I would like to draw attention to. One is cultural affairs, where the operational expenditure and special expenditure was originally intended and budgeted for in the region of $43 million, but in the end we ended up by spending $27.7 million. Another area is in recreation where operational expenditure was intended to be $11.3 million, but actual expenditure only $8.6 million. This means that although we were budgeting to spend 6.7% of our costs on cultural affairs, we ended up by spending only 4.8%, i.e. a reduction in its share of our total costs. Recreation was intended to account for 1.8% of our total annual expenditure, but again, ended up by being reduced to 1.5%. I would hope that this is not to be taken as a trend and is not to represent that the Council is backtracking in two very important areas. I believe that cultural activities and recreation, whatever we are providing now, is barely enough to meet the aspirations and the ever-increasing demands of our younger population. Apart from this point, Mr. Chairman, I would also like to say that I support your efforts in asking the Government to help along the lines that you have listed out here and I believe that there is no reason why all Councillors present should not support you in your efforts to ask the Government to be reasonable. Although ratepayers will conceivably be willing to contribute within reason to increased costs, we hope that help from Government will ease the burden on ratepayers in general, especially at a time when, as you have pointed out, the Government is awash with money. With those remarks, Mr. Chairman, I support the motion.
CHAIRMAN (in English):-Thank you, Mr. CHAN, Mr. Augustine CHUNG, Mr. BERNACCHI, in that order.
MR. CHAN CHI-KWAN (in English):-Mr. Chairman, while supporting the motion, I also join in with all those who have spoken that we are glad to have a clean report, that is to say no more comment from the Director of Audit. From reading your speech and hearing the speech of my senior colleague and junior colleague, all talking about money, let us not beat about the bush. Everybody is forecasting in the best and most polite language that we have to increase the rate from 4% to something more than 4%. Well,
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