XN000022-1981-10-28 — Page 21

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WEDNESDAY, OCTOBER 28, 1981

+ IT HAS ALWAYS BEEN ACCEPTED, IN VIEW OF THE ASSUMED TENDENCY OF CIVIL SERVICE SALARIES TO LAG BEHIND THOSE IN THE PRIVATE SECTOR DURING MORE PROSPEROUS TIMES, THAT THE CIVIL SERVICE WILL TEND TO GAIN ON THE PRIVATE SECTOR IN TIMES OF SLUGGISH GROWTH AND RECESSION.

+BUT NOW IT SEEMS TO ME WE HAVE DRIFTED INTO A SITUATION IN WHICH THE CIVIL SERVICE, OR SO IT COULD BE ARGUED, IS ENJOYING IMPROVEMENTS IN REAL INCOMES BETTER THAN THOSE EXPERIENCED IN THE PRIVATE SECTOR IN BOTH BAD TIMES AND GOOD, SHE SAID.

ON CAPITAL EXPENDITURE, MISS DUNN NOTED THAT THE GOVERNMENT'S DECLARED POSITION EARLIER THIS YEAR WAS THAT THE LEVEL OF CAP ITAL EXPENDITURE PROVIDED FOR IN THE 1981-82 ESTIMATES OF $9.5 BILLION, A RECORD 38 PER CENT OF TOTAL EXPENDITURE, WAS THE MAXIMUM THAT COULD BE CONTEMPLATED.

SINCE THEN, SHE CONTINUED, SOCIAL AND POLITICAL ARGUMENTS FOR INCREASES IN OUR CAPITAL WORKS PROGRAMMES SEEM TO HAVE CARRIED MORE WEIGHT THAN THE ECONOMIC CONSEQUENCES OF SUCH INCREASES ON THE RATE OF INFLATION AND HENCE ON THE EXCHANGE VALUE OF THE HONG KONG DOLLAR.

+ I SUSPECT THAT THE GOVERNMENT IS SEIZED WITH THE RELATIVE EASE WITH WHICH HIGH LEVELS OF EXPENDITURE CAN BE FINANCED, GIVEN THE BUOYANCE OF OUR REVENUES AND THE COMFORTABLE STATE OF OUR FISCAL RESERVES.

+FURTHERMORE, I AM QUITE CONVINCED THAT THIS PREOCCUPATION WITH INCREASING THE VOLUME OF EXPENDITURE IS NOT ONLY INFLATIONARY BUT ALSO PUTS THE VALUES FOR MONEY CRITERION AT RISK, MISS DUNN SAID.

FOR MANY YEARS THE GOVERNMENT HAS EMPHASISED THE IMPORTANCE OF THE VALUE FOR MONEY CRITERION.

IT IS SURPRISING, SHE SAID, THAT A REVISION OF CIVIL SERVICE SALARIES IS NOT AUTOMATICALLY ASSOCIATED WITH A CRITICAL LOOK AT DEPARTMENTAL ESTABLISHMENTS.

WHILE REALISING THAT THE ESTABLISHMENT SUB-COMMITTEE HAS AN ON-GOING PROGRAMME OF IN-DEPTH REVIEWS OF DEPARTMENTAL ESTABLISHMENTS, SHE SAID IT IS NOT THE IR EXPLICIT OBJECTIVE TO ACHIEVE SAVINGS IN RESPONSE TO A LARGER WAGE BILL.

+BUT, WHEREAS THE PURPOSE OF REQUIRING SAVINGS TO BE IDENTIFIED MIGHT WELL BE LEGITIMATELY TO OFFSET PART OF THE COST OF A SALARIES REVISION, THE CONSEQUENCES, OR EVEN SECONDARY PURPOSE. OF REQUIRING SAVINGS TO BE IDENTIFIED COULD BE TO IMPROVE COST EFFICIENCY, SHE SAID.

MISS DUNN FURTHER MADE A PLEA FOR IMPROVED AND SIMPLIFIED PROCEDURES IN THE ADMINISTRATION OF THE BUILDINGS ORDINANCE TO IMPROVE PRODUCTIVITY IN THE BUILDING INDUSTRY.

SHE DISAGREED WITH THE ASSERTION THAT THE BUILDING INDUSTRY IS UNDERCAPITALISED AND INDIFFERENT TO MODERN TECHNOLOGY AND URGED THAT SOME CONCLUSION MUST BE DRAWN FROM THE MANY COMPLAINTS VOICED ABOUT THE TIME IT TAKES FOR BUILDING PLANS TO BE APPROVED AND OCCUPATION PERMITS ISSUED.

/+IT FOLLOWS