PROVISIONAL Urban COUNCIL
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afford some $40m, the loss of some $50m resulting from the proposed reduction should not cause them a heavy burden, should it?
The total expenditure of the Council for 1997/98 was $7.2b. The loss of some $50m this time would represent only about 0.7% of the total expenditure. Nevertheless, although the ratio is relatively small, I still hope that the loss of the 0.7% would be offset by streamlined procedures, enhanced productivity and increased cost-effectiveness. If a 0.7% savings in expenditure could be achieved, the matter would be solved.
The Council has just endorsed the expenditure for 1997/98. As far as the operational cost is concerned, we can see that the actual figure is some $60m less than the estimate, partly because of the slippage of projects. I can see from the cash flow that there is some excessive provision and when the projects are completed, requiring the payment for the operational cost, it will likely be beyond the financial triennium. I therefore hope that the Finance Select Committee will fully examine the financial breakdowns and forecast of the cash flow. Meanwhile, I cannot see any great difficulty in achieving a 0.7% savings in expenditure through streamlining and enhanced productivity.
Secondly, the Department argues that there has all along been the cost-recovery principle. I wish to raise two points. Firstly, the hawkers' licence fee has never been operated on the cost-recovery principle. If this principle was to be adopted, it would be an alarmingly enormous figure, because the hawker control team has more than 2,000 members carrying out the duty of hawker control and it has been subsidized. The principle is therefore not adopted for hawkers' licence fee. Secondly, the so-called operational cost of the other licences covers only that of the Department. The cost to the Fire Services Department, which assists in the issue of licences, is not included at all. The so-called operational cost is therefore only nominal.
At its meeting last week, the Public Health Select Committee agreed to set up a working group to study the feasibility of central licensing. I hope the working group will take the opportunity to study the ways to reduce the cost, improve the efficiency in licensing and avoid shifting the increased cost onto the licensees.
The Deputy Director's third point is that it would be difficult and cumbersome to administer the measure, because the fee and date of renewal vary from one licence to another. It might also necessitate changes in the computer systems and programming. When this issue was brought up recently, we were quite alarmed. I think he is simply exaggerating. I cannot see any great impact on the existing administrative procedures arising from a 30% reduction in the licence fees for the next 12 months at all. My motion recommends a 30% reduction in next year's licence fees, which would run parallel to the annual fee adjustment. No extra expenditure would be caused.