Page 123 of 166
232
HONG KONG URBAN COUNCIL
cause of ill
20 years or so. It is, nevertheless, the most important preventable health and premature deaths. It is the public health duty of all responsible governments to restrict its consumption and sale.
Hong Kong Government has been adopting this positive attitude in the past. The ban of sale of smokeless tobacco, the formation of Council of Smoking and Health, and the phased ban of advertisements in all electronic media by December 1990 are proof of this.
One of the effective means of restricting its use and sale of tobacco is to restrict its promotion in any forms, be it advertisements or sponsorship of arts and sports. After the ban on advertisements in electronic media, there will be a trend that the tobacco firms will divert their funds to sponsor arts and sports, especially those with high profile and publicity value. The simple solution will be to ban sponsorship in any forms, but at this stage, such measures may cause hardship to some small private sports and cultural groups whose funding has been dependent on tobacco money. It is the purpose of this address to suggest an alternative funding source for arts and sports activities by introducing a levy system on the total tobacco wholesale turnover, and to apply the proceeds therefrom to be allocated to those arts and sports groups who wish not to accept tobacco money.
2. The Tobacco Levy System.
As I proposed last year, the Victorian Bill in Australia Melbourne may be modified for this purpose. The concept of this system is to place an ad valorem levy, say 5%, to the total annual wholesale turnover of tobacco. The proceeds will be used to supplement government funding of arts and sports. An advisory board will be formed with unofficial input from the relevant groups to consider allocation of funds.
In 1988-89, the government received a total revenue of $1,217 million from tobacco tax at a rate of $175 per 1,000 cigarettes imported. Adding a levy of say $20 to this would generate an income of $140 million a year for the system. This would also more than cover the estimated amount of $120 million of current tobacco sponsorship, according to the tobacco firms' statistics.
The Levy System has been in practice for more than a year, and is found to be very successful. Other states in Australia have followed this concept and will introduce similar legislation, the New Zealand Government lastly has decided to enact the same to ban advertisements and sponsorship in their country.
3. Adopting the Levy System in Hong Kong.
Levy Systems in Hong Kong is not without precedence. To mention but a few, the recent establishment of Special Levy System under the rules of Exchange Ordinance to finance Securities and Futures Commission, the levy on car and driving licences to fund Traffic Accidents Victims Assistance Scheme, the levy for Trade Development Council, etc.
HONG KONG URBAN COUNCIL
233
Models of setting up a trust to allocate funds to volunteer groups exist in the very successful example of the Community Chest of Hong Kong, and the Lottery Fund.
One of the possibilities for this Levy System is to set up through legislation. Whereby the funds will be in charge by Government Branch as the financial controller, and a advisory board may be formed comprising of unofficial and official members to decide on allocation of the funds to various art and sports groups. The accounts of the trust and that of its beneficiary groups should be audited and placed before the Legislative Council for scrutiny. By this arrangements, the Legislative Council and the Government will retain the control and monitor the administration of the funds, if there need be.
4. Merit of the Levy System.
1.
2.
3.
The same source of money will be applied to the same use, but the name of tobacco will be laundered away with a wash clean, and hence the adverse effects of its promotional efforts for the youth to start smoking will be taken away.
With the Levy System in place, other firms who have hitherto did not wish to be associated with tobacco to co-sponsor events will be more willing to participate.
For the tobacco firms, the levy is just equivalent to the amount they are spending on sponsorship, there will be no excuse to increase the retail tobacco price. Even if they did take advantage of this chance to increase the price, it would bring in another additional benefits from public health point of view. There will be a decrease in youth starting smoking. According to the data in United States, it indicates that any 10% increase in tobacco price would result in a 14% decrease of teenagers smokers, as they are more economically sensitive to any increase in tobacco price, having to be dependent on parent's financial support. Even for the confirmed smokers, like Mr. TONG and Mr. LAM, they may decrease the amount of their consumption and hence less health damages done to them and my friends can live for longer period of time.
4. Financially speaking, the government will have no additional burden, indeed, the allocation from general revenue to arts and sports will be handsomely supplemented by this Trust Fund. The arts and sports groups will continue to have the financial support they need. Those groups whose activities provide less commercial or promotional value, and yet worth supporting will now be able to receive funds from the trust which might have been denied by the tobacco firms for the lack of promotional value.
5.
6.
Since the issue was raised, there has been overwhelming support from the public and some government departments. The only body who has criticized the system, was quite naturally the tobacco institute. Their reason being that this system is interfering with the freedom of
Page 124 of 166
234
...HONG KONG URBAN COUNCIL
...i