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1.
Trading Fund Scheme
Following is the speech by the Secretary for the Treasury, Mr K C Kwong at the motion debate on the review of the operation of the Trading Fund Scheme in the Legislative Council today (Wednesday):
Mr President,
In the past couple of weeks, I have discussed with some Honourable members the substance of today's motion. So, they would probably not be surprised to find me rising to speak in support of the spirit of both the original motion and the amendment. Despite the adverse comments on trading funds made just now by some Members, I believe that we do have a good story to tell on trading funds and I would like to take this opportunity to lay to rest a number of common misconceptions about them.
The motion asks for two things:
First, that Government conducts an overall review of the operation and cost- effectiveness of the six existing trading funds.
Second, that we stop setting up any new Trading Fund until the completion of this overall review.
Setting the scene
Before I address each part of the motion in turn, I would like to set the scene by revisiting the basic concept of a trading fund.
Some Members have suggested that it simply allow the departments that provide quasi-commercial monopoly service to hike up their fees and gouge their hapless customers. That would be ill-founded, in conflict with our fiscal policies and ethically quite wrong, even if they had that freedom. They don't, and I will explain why later.
The prime reason that we establish trading funds is to improve the quality of service to customers. We do this by allowing certain departments which offer commercially oriented services to operate with much greater financial autonomy and to retain revenue. By being allowed to use the available resources more flexibly, and to finance investments for new and improved services from its retained revenues, a trading fund is able to adopt a more responsive and customer-oriented (or "business- like") approach to service.