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and from the fact that we do not treat as a cost the depreciation of buildings, the element of hidden subsidy has been considerably reduced. At the same time, the Select Committee has worked out a system of direct subsidies, to be calculated in accordance with a points system, for those eligible for it. The total amount of subsidy each year that the Council can afford will largely depend on the amount of income that the City Hall can obtain from other sources of revenue.

Apart from the question of principle that we should not grant hidden subsidies, there is another equally pressing reason why hire charges have to be revised, and that is the large deficit at which we are running: it has been costed at HK$716,000.00 for the financial year 1972-73. The existing scale of hire charges, Mr. Chairman, was based on operating costs in 1963 and has been in effect since 1966, and I need hardly stress that they are totally unrealistic. The new scale will take effect in respect of bookings on or after the 1st April, 1974.

I hope that with the twin measures now decided by the Select Committee and approved by the Finance Select Committee, of a basic scale calculated on the cost to the Council of the services provided, and ameliorated by direct reductions in particular cases, the effect will not be unduly felt except by those to whom the Select Committee does not consider it appropriate to subsidize. However, even without any reduction the scale, as it is worked out on the basis of the recovery only of costs, our new charges will only be a fraction of market rates for comparable facilities.

The twin systems of a scale based on costs and subsidy based on points should give the Select Committee sufficient flexibility to enable it to pass to hirers any income increase arising from the City Hall. Those eligible for subsidy include hirers who are non-profit making and whose functions are in furtherance of educational, scientific, in- dustrial, artistic or public health purposes, and the amount of the subsidy will be decided on the basis of the points system already established for the purposes of obtaining a booking. Reductions may in extreme cases go up to 90% of the scale. For your information, Appendix I I would now like to table two examples of how reductions will be

calculated.

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be formally approved by this Council for transmission to the Governor."

He said (in English):-In accordance with section 39 of the Urban Council Ordinance, Number 19 of 1973, this Council is required to furnish to the Governor a list of works for the next financial year. Our Public Works Programme has already been discussed by the relevant Select Committees and passed by the Standing Committee. In compliance with section 36(4)(a) of the same Ordinance I now move that the annual list of works be formally approved by this Council for transmission to the Governor.

MR. HILTON CHEONG-LEEN (in English):-Mr. Chairman, I rise to second.

The question was put.

The motion was carried unanimously.

ADJOURNMENT — 4.27 P.M.

CHAIRMAN (in English):-This concludes the business of today's meeting. The Council stands adjourned until Tuesday, 9th October, 1973, at 4.00 p.m.

MOTION

THE CHAIRMAN, URBAN COUNCIL moved the following motion:

"That in accordance with section 39 of the Urban Council Ordinance, Number 19 of 1973, the annual list of works

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