XN000022-1981-10-14 — Page 7

WEDNESDAY, OCTOBER 14, 1981

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THE HONG KONG TOURIST ASSOCIATION, HE SAID, OPERATED ON A DISCIPLINED AND TIGHT EXPENDITURE BUDGET APPROVED BY THE GOVERNMENT, AND ALL COSTS WERE CAREFULLY SCRUTINISED BY THE BOARD AND MANAGEMENT WITH THE OBJECTIVE OF MAXIMISING THE +PRODUCTIVITY+ OF EACH DOLLAR SPENT.

HOWEVER, THE GOVERNMENT'S RECENT DECISION ON SALARIES

WHICH AFFECTED THE TOURIST ASSOCIATION AS A SUBVENTED ORGANISATION, HAD MADE A MOCKERY OF THE ASSOCIATION'S BUDGETS.

WITH A 17/18 PER CENT INCREASE, AND PARTICULARLY THE RETROACTIVE ELEMENT, THE BUDGETARY CONTROLS IN THE CURRENT YEAR HAD BEEN DESTROYED. THIS WAS DISCOURAGING TO THE BOARD AND MANAGEMENT AND COMPOUNDED THE DIFFICULTY OF ANY FORM OF MEDIUM TO LONG TERM POLICY PLANNING.

WHAT WAS EVEN MORE DISCOURAGING WAS THAT PRIMARILY AS A RESULT OF THE RETROACTIVE ELEMENT, THE TOURIST ASSOCIATION NOW FACED A 45 PER CENT INCREASE IN HONG KONG STAFF EXPENSES ALONE FOR 1982/83 OVER THE ORIGINALLY APPROVED BUDGET FOR 1981/82.

+THIS WILL HAVE THE EFFECT OF THE ASSOCIATION BUDGETTING FOR A DEFICIT (IN OPERATIONAL TERMS) IN 1982/83 EVEN ASSUMING NO INCREASE IN EXPENDITURE IN HONG KONG DOLLAR TERMS FOR ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, FOREIGN REPRESENTATION, PRODUCT DEVELOPMENT, CONFERENCES AND MEETINGS AT A TIME WHEN INFLATION IS ANYWAY RUNNING AT TOO HIGH A LEVEL BOTH HERE AND WORLDWIDE.

+MUCH OF THE EXPENDITURE I HAVE REFERRED TO ARISES OVERSEAS. SO WITH A WEAK HONG KONG DOLLAR THE ASSOCIATION'S REAL EXPENDITURE IN 1982/83 WILL SHOW A MARKED DECLINE,

+AT A TIME OF INTENSE INTERNATIONAL COMPETITION IN TOURISM I BELIEVE WE SHOULD BE CONCENTRATING OUR EFFORTS ON MAINTAINING AND INCREASING THE EXISTING MOMENTUM: BUT THIS CANNOT BE DONE WITH A SLASHING OF THE REAL EXPENDITURE IN THE MOST IMPORTANT AREAS OF THE ASSOCIATION'S ACTIVITIES AND I WILL BE TAKING THIS MATTER UP SEPARATELY WITH THE FINANCIAL SECRETARY, HE SAID.

HE URGED THE GOVERNMENT TO CONSIDER REMOVING THE RETROACTIVE ELEMENT, MAKING JANUARY 1, THE EFFECTIVE DATE FOR SALARY INCREASES, AND REVIEWING THE METHODOLOGY USED TO ENSURE THAT A LIKE-FOR-LIKE COMPARISON IS BEING MADE WITH THE PRIVATE SECTOR.

HONG KONG REMAINED AN EXTREMELY ATTRACTIVE PLACE FOR VISITORS, HE SAID.

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