HONG KONG URBAN COUNCIL
Despite double-digit inflation, the Urban Council has been able to maintain a 4% rate since 1977/78 when it was possible to reduce the Urban Council's share of the rate from 6% to 4% because of revaluation of properties. In 1977/78, rate income totalled $346 million and this is expected to increase to $436 million next year. However, over the same period, personal emoluments will have more than doubled from $261 million (excluding the Government salary grant), to an estimated $532 million in 1981/82. Thus, next year's rate income is likely to be almost $100 million less than the cost of personal emoluments. This situation has principally been brought about by Government's salary revisions ever since 1973/74. The Urban Council through its Chairman has repeatedly asked Government for co-operation and assistance on its financial requirements. This could be given in three different ways. Firstly, the Government could pay an annual grant to the Urban Council to compensate for the loss of rate income as a result of Government's decision not to re-value properties with effect from 1 April 1980. Secondly, the Government could make a grant to the Urban Council to take into account the fact that expenditure on personal emoluments (over which the Urban Council has little control) has increased at a faster pace than rate income; this is also referred to as 'indexation and pegging the rate'. Thirdly, the Government could transfer a share of the general rate for the urban areas to the Urban Council so as to reduce the impact of any rate increase required by the Urban Council next year. I personally believe the third alternative is the best in the wider public interest. I should also add that the Finance Committee and the Standing Committee of the Whole Council strongly support the Chairman of Council in his negotiations with the Financial Secretary along these lines.
It is clear that in the absence of co-operation from the Government as I have outlined, the Urban Council's share of the rates will require to be sharply increased with effect from 1 April 1981 to enable the Urban Council in 1981/82 to fulfil its role efficiently, responsibly and at a steady pace in keeping with the needs and aspirations of our four million urban citizens.
Mr. Chairman, I second the motion.
CHAIRMAN (in English): Thank you. The first motion has been proposed by the Chairman and seconded by the Vice-Chairman. It is now open for discussion.
MRS. E. ELLIOTT (in English): Mr. Chairman, I intend to abstain on this budget. I have never supported either a personal or a public budget which threatened to end in the red. It is not my principle. I believe one has to cut the budget to meet the financial resources. I think it may be possible to expand our work if there is an increase in our finance, but at the same time, I do believe that we should look for ways to economize. If we look at the budget, I think, for example, that the amount of $53 million, (I think it is correct), for cultural services is a bit too high. I think we spend a lot of money on publications such as the expensive Annual Report, City News and all the personnel involved in the production of these things. I believe it may be over-staffed in some directions, and some divisions, not all. I think, we certainly are over-staffed in the control of hawkers and that is why it is costing so much for hawkers. I think we have to consider these matters. We cannot ask the ratepayers to pay more. I think it is inconsistent if I were to support the budget which I believe we cannot meet and then we know where the finances are coming from. I do not think I for one can vote for it. I do agree that we can press the Government for a higher rate, but at the same time, I must point out that when the rate was lowered a few years ago from 6% to 4%, some of the members of this Council including myself were not consulted about that. It was announced at a public meeting without our being consulted or even having it discussed in the Whole Council. So I believe that on the one hand, we must press the Government for a higher rates percentage without passing it onto the ratepayers, and secondly, we must consider ways of economizing. Unless we can do that, I am sorry that I must abstain.
MR. HOWARD H. W. YOUNG (in English): Mr. Chairman, the draft budget presented today was discussed at a Standing Committee meeting and since that meeting and before this meeting, I have done some research in the figures mentioned. I think there are two points which I originally wanted to mention and also one additional point since it has been raised just now that I would like to comment on. Firstly, recreation, I notice that the Recreation Select Committee expenditure, both operational and non-recurrent, is proposed to amount to $17.3 million next year. This only amounts to 1.9% of our total expenditure. In fact, last year, we intended to spend more. This current year, we intended to spend $21.5 million in recreation. In other words, we are already budgeting for a cut in recreation. I believe that this is not along the lines of the needs of the younger sector of our population who are now demanding more in recreation and not less. The second point is in capital works. We are proposing next year to spend $145 million in capital works whereas this year, the approved estimate was $148 million. Again, it is marginally less for the next year. It has to be looked at in the light of increasing construction cost, not decreasing construction cost, so we are in fact investing and building less for the future, and this again, I don't believe is in the long-term interest of the younger members of the population who will want to see more in building for recreation and cultural and environmental hygiene. The third point I would like to comment on is, since it is raised by a member, cultural services. The figure of $53 million was just mentioned as a high figure and I must say that I also noticed this figure. But instead of just looking at the figure on the sheet, I also looked at the appendix which is attached to the committee paper and I have found that in fact this expenditure on cultural activities includes expenditure on
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