XN000022-1996-07-10 — Page 24

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The cost of operating the licensing scheme is $20.6 million per annum. Under the existing fee scale, we only recover about $9 million or 43% of the cost if all establishments are licensed. Our proposal seeks to achieve full cost recovery over three years. In the first year, the cost recovery is only about 70%, which means tax payers are still subsidising the hotel/guesthouse business by about $6 million.

I wish to stress that the Regulation has little, if any, impact on livelihood and on inflation as local customers account for a very small share of the business turnover of hotels and guesthouses. The proposed fee increases would only have a very mild impact on the operating costs of the industry.

I urge Honourable Members not to repeal the Hotel and Guesthouse Accommodation (Fees) (Amendment) Regulation 1996. Otherwise, our tax payers will have to continue to subsidize hotels and guesthouses, which are private, profit- making and non-welfare organizations. Clearly this is against the 'user pays' principle and is unreasonable and unfair. The repeal would run counter to the Public Accounts Committee's recommendation and prevent the Administration from rationalising the fee structure.

I further urge Honourable Members not to resolve to amend the Regulation as moved by the Hon Sin Chung-kai. The fee scale under the Resolution has little, if any, regard to full cost recovery. Neither could it implement the recommendation of the Public Accounts Committee. It would prevent the Administration from rationalising the fee structure and cause unacceptable delay in achieving full cost recovery. Under this Resolution, if passed, our tax payers would continue to subsidise hotels and guesthouses, which I reiterate is unreasonable and unfair.

Thank you, Mr President.

End

Commissioner for Administrative Complaints (Amendment) Bill

Following is the speech by the acting Chief Secretary, the Hon Donald Tsang, in moving the second reading of the Commissioner for Administrative Complaints (Amendment) Bill 1996 in the Legislative Council today (Wednesday):

Mr President,

I move that the Commissioner for Administrative Complaints (Amendment) Bill 1996 be read a second time.