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The motion now seeks to repeal a series of fees determined following the Administration's agreement to Members' earlier intervention. This is apparently justified on the basis of an economic downturn. In the port as a whole, our growth continues at record volumes - in the last five years, cargo throughput has grown at an average annual rate of 13.9%. In the PCWA's in particular, cargo volume has grown by 20% so far this year as compared with the same period in 1994. Our forecasts indicate that, in the next five years, growth will continue to increase at an annual rate of 10% every year.
So the effect of this resolution will be to draw continuing taxpayers' subsidy to profitable, commercial operators who have already been consulted on the new levels of fees and whose potential business is increasing. They have, presumably, already included the new charges in their commercial forecasts and have agreed the new fees. The proposed fees increases will represent only an average increase in operating cost of 1.3% for a lorry, or 1.6% for a lighter.
Let me reiterate the importance of adherence to the principle of full cost recovery. It is an integral part of Hong Kong's low tax regime. With this principle, we can centralise our resources in subsidising selected public services where there are compelling social grounds - hospitals, schools and so on. It is highly undesirable that public funds should be used to subsidise commercial activities such as PCWAs. If users do not pay, the general taxpayers have no option other than to meet the shortfall, and we estimate that the taxpayers' subsidy to port cargo handling operators will amount to $49.5m for the next financial year.
A freeze on this fee increase will do nothing other than to store up problems for the future: then we shall face the options of either introducing drastic increases, or confirming that general taxpayers should continue to subsidise commercial undertakings.
Sir, I have explained the reasons for the proposed PCWA fee increases and why we should not hold them up. I hope Members would consider the Administration's views carefully and seriously. Finally, I urge Members to oppose the motion.
End/Wednesday, October 25, 1995