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First, such wide exemptions clearly breach the Polluter Pays Principle which found favour with this Council during the Motion Debate on Sewage Charges last year. Second, it ignores the fact that households as a whole contribute to over 60% of the organic pollution in Hong Kong, and that as they too contribute to pollution, they too should contribute to its solution, albeit in a very modest way. Third, the consequence of exempting so many households would be that the non-exempt service users, mainly trade and industry, would be required to make up for the revenue forgone. Fourth, it ignores the fact that the public have by and large accepted that they should help pay for sewage services. Fifth, by altering the charging structure to calculate exemptions on the basis of the average water consumption by households, the charging scheme would become unnecessarily complex, as each time the average consumption level was adjusted, or each time a household fluctuated between payment and exemption and this would occur frequently the Trading Fund and the householder would be uncertain as to cash flow and charges respectively.
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Nor would such an exemption arrangement encourage water conservation as has been suggested. It would, however, cause confusion among the public and significant administrative problems to the charging authority, merely to avoid an $8 per month payment, say the cost of a cup of coffee in a fast food shop. If these issues were the only reasons against Rev Fung's proposal, I'm sure that Members would reject it. But, there are further difficulties.
There are, for example, unacceptable implications for the Trading Fund Ordinance, Members will recall that in March this year, and with a view to enabling sewage services to be funded by charges, they approved the establishment of the Sewage Services Trading Fund under the Trading Fund Ordinance. This Ordinance requires the Trading Fund to fund itself through charges, a requirement accepted by Members. However, to make up for the revenue forgone from the large number of households that it seeks to exempt from our modest charging proposal, Rev Fung proposes that recurrent subsidies be credited to the Trading Fund by tax-payers. Such subsidies are outside the framework of the Sewage Services Trading Fund and would clearly conflict with the provisions of the Trading Fund Ordinance. To meet the objectives of the Trading Fund Ordinance it would therefore be necessary to recover the charges forgone from the exempt accounts by increasing the charges on the other service users. This is not equitable, could not be justified to those who would pay, and would, furthermore, deviate so much from the Polluter Pays Principle as to negate it.
Rev Fung's alternative charging scheme therefore deviates so significantly from the Polluter Pays Principle, is so discriminatory between different groups of service users and is so unnecessarily complex that it breaches the objective of a fair but easy to administer charging scheme, that I am confident his proposals will not find favour with this Council.