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HONG KONG URBAN COUNCIL
I am satisfied that the ratepayers of Hong Kong can see for themselves that urban Hong Kong is provided with a high standard of municipal services with world-class recreation, sports and cultural facilities and a clean environment covering areas which are under the control of the Council.
Now turning to the next financial year, the overall expenditure is estimated to be a record figure of $3 billion representing an increase of almost 20 per cent over this current financial year. This record figure is required to meet public demands for quality municipal services. For example, an increase in current and capital expenditure on culture of $116 million, much of this is connected with the opening of the exciting new Hong Kong Cultural Centre; an additional $41 million for environmental hygiene projects; $55 million for the three museums projects currently under construction; an additional $36 million for various recreational projects; there will be also $100 million required to meet the Council's share next year of the Hong Kong Park project; plus the Urban Council's undertaking to be the sole public funding body for the Hong Kong Philharmonic Orchestra to ensure the Orchestra's financial future. These are only a few examples of the Council's commitment to improving the quality of life here. Although the Council will have a record expenditure, we are expecting to end up only with a small deficit of $57 million for the next financial year and the Council will need to meet the deficit from its reserves which will be reduced to some $814 million, which will leave the reserves equal to approximately three months' expenditure at present price levels.
I would like to point out that the Council's budgeting philosophy consists of three elements: first, the financial resources required to maintain the existing level of services and activities; second, the resources required to increase or improve the existing level of services or activities, the introduction of new services or activities in accordance with approved policy; and third, the introduction of new or additional services and activities arising from completion of capital projects.
However, while the Council is making every effort to exercise all reasonable economies, we do not wish as a Council to reduce the manifold services that the 3.6 million urban dwellers of Hong Kong have become accustomed to, and are in our opinion entitled to continue receiving.
In the face of inflation and in view of the belt-tightening financial policy already strictly practised by the Council, we have no alternative but to look for ways and means to generate and increase our revenue and in this connection I would like to put down a marker that the Urban Council will be seeking to increase its rates percentage from the Government in about two years' time. The Urban Council presently is only getting 34 per cent of the urban area's 6 per cent rate, the Government keeping the remaining 24 per cent. On the other hand, the Regional Council gets the total rates levied on New Territories properties. I say this because the Council is determined to maintain the high standard of municipal services at present provided for the dwellers of urban Hong Kong.
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And unless the rates income is increased in the foreseeable future, the standards which we are aiming to maintain and improve will need to be cut back.
Select Committees are at great pains to scrutinize each and every project whether it be large or small, to ensure that the Council's funds are wisely and productively spent in the creation of a better lifestyle for the people of Hong Kong.
The Department has been the Council's staunch ally in devising these economies, working steadily to achieve higher productivity and more value for money.
I would assure the ratepayers of Hong Kong that the high standard of municipal services they have come to expect and take for granted will be maintained.
Before I invite Mr. SULKE, Chairman of the Council's Finance Select Committee, to second the motion and to elaborate on its financial details, I would like to place on record the Council's appreciation for the Chief Treasury Accountant, Mr. MANNING, and his staff for the hard work in producing this year's budget. With this note, may I now pass it over to you Mr. SULKE.
MR. WALTER M. SULKE seconded the motion (in English):—Mr. Chairman, in rising to second your motion let me first of all congratulate our Chief Treasury Accountant and his staff on a mammoth task well executed. All budgets are always difficult to put together, any housewife can testify to that, and when you come to the sort of figures of revenue and expenditure we have to deal with it requires the cooperative effort of many of our staff in the Urban Services Department who often have to look into a very clouded crystal ball to come up with figures they recommend to our various Select Committees, who then in turn have to go through these figures with a fine tooth comb to make sure that the right balance between optimism and pessimism is obtained, and the temptation to ask for more than is really necessary is resisted.
Over the past three years we have been restructuring and streamlining our accounts, and this has needed extra and very special efforts in our Accounts Office. There was a great deal of work necessary to separate all our expenditures, which had been lumped together under one or two committees, and allocate this properly to the various Select Committees so that now all of us, and especially the Chairmen of the Select Committees, have a much better idea of what they are spending and why. There has been a great improvement in control and although there are still some further items which should be separated, we are now really very reasonably organized on the financial side and our Chief Treasury Accountant and his staff deserve our hearty thanks for this long ongoing effort.
And, as usual, there is good news and bad news. The good news is that we now estimate for this financial year we will have a surplus of HK$148 million.