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1985/86 Budget
HONG KONG URBAN COUNCIL
expenditure
For the financial year 1985/86, the Council has budgeted for an expenditure of $1.83 billion, with a revenue figure of $1.65 billion, and a deficit of $180 million.
Expenditure
On the expenditure side, of the total of $1.83 billion, 58.7% or $1.07 billion represents personal emoluments and allowances. This compares favourably with the 60.8% or $1.04 billion for the 1984/85 financial year as it means that a larger percentage of the Budget will be spent on operational, non-recurrent expenditure and capital works.
The provision of $1.07 billion includes:-
(a) general salary revision awarded in April 1984 by the Government;
(b) staff costs for capital works projects to be completed within the capital works programme and other new activities to be introduced during the year; and
(c) staff costs in respect of staff to be transferred from the Recreation and Sports Service of the Recreation and Culture Department to Council with effect from 1 April 1985.
The Council has established during the current year a Management Services Unit to conduct management services reviews on all activities of the Urban Services Department so as to improve operational efficiency, optimise utilisation of resources and achieve cost effectiveness.
With regard to capital works, the Council has budgeted for expenditure of $330 million which represents 18% of the overall Budget and compares favourably with $245 million i.e. 14.3% for the current financial year.
Revenue
On the revenue side for 1985/86, the Council has budgeted for $1.65 billion of which $1.22 billion will be the income from rates and $430 million from fees and other income.
Urban Council Reserves
It is estimated that Council's total reserves as at 31 March 1986 will be $77 million which is equivalent to half one month's expenditure. Discussions have been conducted on the current and projected financial position of the Council, using the Five Year Forecast 1984/85 to 1988/89 as the base, between the Council and the Government. To date no final conclusions have been reached and negotiations are continuing.
Members are aware that it has always been the Urban Council's view that our reserves should be to the order of three months' Council monthly expenditure to enable the Council to confidently plan ahead its capital works programme without adopting a stop-go approach, which will not be in keeping with the Council's responsibilities to the community. This is what I said when introducing last year's budget; to-day such is still the view of the Council, especially since the Council's capital works programme and commitments to the ten urban District Boards will be substantial over the next 5 years. Government's view on the other hand is that the Council's reserves could be maintained at as low a level as one month's expenditure, which is less than half of what Council is currently budgeting for its annual expenditure on capital works. However, at this point of time, I have no intention of asking the Urban Council Standing Committee of the Whole or the Finance Select Committee to consider for next year any proposal to obtain from the general public an increase of the Council's share of the rate from its present figure of 21%.
Capital Work
In September this year, the Urban Council accepted a Five Year Forecast covering the period 1984/85 to 1988/89. The forecast included expenditure on capital projects of $2.35 billion over the 5-year period. This works programme envisages expenditure of $300 million to $400 million each year up to 1988/89 and total expenditure in cash terms over the 5 years in the region of $1.55 billion.
The Council has a total of 24 district complexes being planned in the 5-year programme for ten District Board districts and of this total, funds have already been approved for 9 projects which will cost in the region of $737 million. Work will commence on the Tsim Sha Tsui Cultural Complex later this year and is expected to be completed in the year 1988 with Council's share of the overall cost being 26.2%.
Mini-Budget
Members will find in Annex A the allocation of resources in chart form over the respective functional select committees for the year 1985/86.
Finally, may I say that the Council is ever conscious of the need to economise. This Budget has been carefully scrutinised by the Finance Select Committee and by the other Select Committees. I congratulate all concerned on a job well done as far as this Budget is concerned. But it is an ongoing process whereby the Finance Select Committee and other functional Select Committees have the responsibility to ensure that the Council's funds are wisely and productively spent in the creation of a better living environment for the people of Hong Kong.
I so move.
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