TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 152

101.

Notwithstanding the severity of the increases in first registration tax and annual licence fees, the 1982 measures failed to approach the traffic congestion problem comprehensively. Two important elements in the package of proposals set out in the White Paper for controlling traffic congestion, namely parking and taxi controls, were omitted even though the Memorandum for the Executive Council mentioned that the limitation in parking facilities in central urban areas, together with high charges, did impose some restraint on car usage in busy areas and that this was a form of restraint which must increasingly be applied. However, in introducing his proposals to the Legislative Council the Secretary for Transport apparently contradicted this policy by announcing that there was no question of using the provision, or the deliberate lack of provision of car parking as a restraint on car usage in busy areas. A similar policy contradiction was evident in the Secretary's statement that no controls on taxis would be introduced because he regarded them as "a necessary and useful adjunct to public transport".

102.

The audit review examined the origins of these policy contradictions and it was found that the failure to check the growth in the number of taxis had the most damaging effect on the efforts to reduce traffic congestion. In July 1981 the Secretary for the Environment attempted to implement the White Paper's policy by proposing that the limit of 10,000 urban taxis set in January 1980 should not be raised at that time but low fares had caused a shortage of taxis and the proposal was rejected by the Governor in Council and the limit raised to 12,000. A proposal in December 1982 to freeze this limit was also rejected by the Governor in Council and the maximum number was raised to 15,000. It was at this stage, when the growth in the number of taxis was being encouraged by the Government, that the decision to proceed with the electronic road pricing pilot stage was made.. However, it soon becamę obvious to the Transport Branch that the implementation of the Government's policy on taxis had got out of hand and it was decided to carry out a full-scale review. The report of the 1983 Taxi Review described the problem as follows:

"In practice, the issue of taxi licences has

tended to be demand responsive to secure ready taxi availability, while levels of taxi fares have never been set to discourage taxi patronage. Policy decisions as regards taxis have also tended to be made in isolation from other transport policy issues such as restraints on private vehicles to reduce congestion and priority to be given to mass transit carriers. The result is that it is difficult to reconcile the increased number of taxis on the road and the kilometrage they travel, with the lower priority of taxis in the transport hierarchy".