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HONG KONG URBAN COUNCIL
MR. YOUNG (in English):-Yes, Sir.
MISS CECILIA L. Y. YEUNG (in Cantonese):-Mr. Chairman, concerning the increased expenditure for the coming year, I am a bit sympathetic but I don't think we have any alternative. Concerning the increase in the rate, I hope that we can take into consideration the rising standard of living and the inflation factor, a lot of the general public have to pay a lot for rent so I hope that the Chairman will pay more attention to this point.
MR. FORSGATE (in English):-Mr. Chairman, I recall when we were discussing the financial arrangements for the Urban Council in the Committee which produced the memorandum of administrative arrangements in 1973. One of the items under discussion referred to Incremental Creep as a factor to be considered with reference to staff salaries and other charges. But looking at this year's revised estimate, and the 1980-81 estimates, which are the subject of your motion today, it is obvious the so-called Creep has become an outright gallop. But is this a runaway horse that we are riding; continuing in the same metaphor, can we rein our steed in a bit by some means or other?
The Urban Council track record in many of its spheres, shows that its response to demand has been made with commendable alacrity. But faced with the reality of double digit inflation which will wipe out our carefully built up reserves in two years, we have little choice but to exercise care and discrimination in our selection of projects involving both capital cost and recurrent expenditure; and at the same time maintaining statutory services to the same degree.
The area of most concern, as you have pointed out Mr. Chairman, lies in expenditure on staff salaries; involving a ratio of nearly 60% of total expenditure. $380m. out of the total expenditure this year of $680m., rising to $407m. out of $770m. in 1980-81. On the revenue side the Urban Council share of the rates will amount to $392m. or 70% of total revenue this year and $420m. or 74% of total revenue next year. The remaining part of our revenue coming from licence fees, charges and bank interest. The latter will of course disappear as our bank deposits are consumed to offset the deficits for which we are now budgeting next year and the year after.
These numbers illustrate our financial straightjacket, and the little room the Council has for manoeuvre.
Our statutory obligations under the Urban Council Ordinance clearly define where our duties lie, and there must be no shirking our responsibilities; but it is essential we ensure the ratepayer gets value for money from the productivity of the Urban Services Department. Which in staff terms is by far the largest in Government. I know the Director of Urban Services is concerned about this and will ensure the highest priority is given to training and other means of stimulating greater efficiency.
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It may be our standards of service are too high to be cost effective. But we all know what is happening in the U.K. where inflation has forced many Councils to drastically reduce scavenging and other essential services. This would be a step backward for Hong Kong and too smelly to contemplate in our Summer months.
The Budget Sub-Committee has now started its work and will no doubt come up with advice to the Functional Select Committee on the need for a hard-headed approach to projects requiring heavy expenditure. It may be that in the process sacred cows may be sacrificed; each Committee will have its share of precious projects, but I am sure when the facts are reviewed common sense will prevail and ensure this Council does not fall into the trap of not doing its sums properly.
I support your motion and of course your recommendation that our share of the rate remains unchanged at least for the next year.
CHAIRMAN (in English):-Mr. Howard YOUNG, Mr. Edmund CHOW in that order.
MR. HOWARD H. W. YOUNG (in English):-Mr. Chairman, I am somewhat puzzled after listening to the remarks from the lady to whom I yielded the floor, but if I am correct in saying that the Chinese translation and interpretation are correct, today you did say that we were not contemplating increasing rates next year.
Mr. Chairman, I myself, as I am sure other Members of this Council and the general public will, do welcome the assurance you have just given in no uncertain terms regarding next year's rates. I am equally pleased to see from the estimates of revenue and expenditure tabled in front of us that the estimated deficit of this year in fact is less than what was originally envisaged. In fact, I think the $119 million noted here is more than 10% lower than the originally estimated deficit for this year. However, it is clear that we will no longer have the blessing of reserves by the end of next year and I think we should not be complacent and wait until then to think about it as the problem will not go away. Therefore, I hope the Council will pursue vigorously, Mr. Chairman, the point you have just made regarding an internal adjustment of the rate percentage, especially as the current rate percentage did not take into full account the massive strain on the Council's resources in some areas such as controlling hawkers, nor is what was decided over 5 years ago necessarily sufficient to meet the rising demand in the field of recreation, sports and culture of a society which has progressed rapidly and whose ambitions have been fuelled enormously by the progress we have made so far in recent years. It has always seemed illogical to me to have the Urban Council, to use your words, Mr. Chairman, driven to the wall with cap in hand while the Central Government will have a surplus approximately 10 times our deficit. With these remarks, Mr. Chairman, I support the motion.
Page 64 of 136
Page 64 of 136
94
HONG KONG URBAN COUNCIL
MR. YOUNG (in English):-Yes, Sir.
MISS CECILIA L. Y. YEUNG (in Cantonese):-Mr. Chairman, concerning the increased expenditure for the coming year, I am a bit sympathetic but I don't think we have any alternative. Concerning the increase in the rate, I hope that we can take into consideration the rising standard of living and the inflation factor, a lot of the general public have to pay a lot for rent so 1
hope that the Chairman will pay more attention to this point.
MR. FORSGATE (in English):-Mr. Chairman, I recall when we were discuss- ing the financial arrangements for the Urban Council in the Committee which produced the memorandum of administrative arrangements in 1973. One of the items under discussion referred to Incremental Creep as a factor to be considered with reference to staff salaries and other charges. But looking at this year's revised estimate, and the 1980-81 estimates, which are the subject of your motion today, it is obvious the so-called Creep has become an outright gallop. But is this a runaway horse that we are riding; continuing in the same metaphor, can we rein our steed in a bit by some means or other
The Urban Council track record in many of its spheres, shows that its response to demand has been made with commendable alacrity. But faced with the reality of double digit inflation which will wipe out our carefully built up reserves in two years, we have little choice but to exercise care and discrimination in our selection of projects involving both capital cost and recurrent expenditure; and at the same time maintaining statutory services to the same degree.
The area of most concern, as you have pointed out Mr. Chairman, lies in expenditure on staff salaries; involving a ratio of nearly 60% of total expenditure. $380m. out of the total expenditure this year of $680m., rising to $407m. out of $770m. in 1980-81. On the revenue side the Urban Council share of the rates will amount to $392m. or 70% of total revenue this year and $420m. or 74% of total revenue next year. The remaining part of our revenue coming from licence fees, charges and bank interest. The latter will of course disappear as our bank deposits are consumed to offset the deficits for which we are now budgetting next year and the year after.
These numbers illustrate our financial straight jacket, and the little room the Council has for manoevre.
Our statutory obligations under the Urban Council Ordinance clearly define where our duties lie, and there must be no shirking our responsibilities; but it is essential we ensure the rate payer get value for money from the pro- ductivity of the Urban Services Department. Which in staff terms is by far the largest in Government. I know the Director of Urban Services is concerned about this and will ensure the highest priority is given to training and other means of stimulating greater efficiency.
HONG KONG URBAN COUNCIL
Page 64 of 136
95
It may be our standards of service are too high to be cost effective. But we all know what is happening in the U.K. where inflation has forced many Councils to drastically reduce scavenging and other essential services. Tais would be a step backward for Hong Kong and too smelly to contemplate
in our Summer months.
The Budget Sub-Committee has now started its work and will no doubt come up with advice to the Functional Select Committee on the need for a hard headed approach to projects requiring heavy expenditure. It may be that in the process sacred cows may be sacrificed each Committee will have its share of precious projects, but I am sure when the facts are reviewed common sense will prevail and ensure this Council does not fall into the trap of not doing its sums properly.
I support your motion and of course your recommendation that our share of the rate remains unchanged at least for the next year.
CHAIRMAN (in English):-Mr. Howard YOUNG, Mr. Edmund CHOW in that
order.
MR. HOWARD H. W. YOUNG (in English):-Mr. Chairman, I am somewhat puzzled after listening to the remarks from the lady to whom I yielded the floor, but if I am correct in saying that the Chinese translation and interpretation are correct, today you did say that we were not contemplating increasing rates next year.
Mr. Chairman, I myself, as I am sure other Members of this Council and the general public will, do welcome the assurance you have just given in no uncertain terms regarding next year's rates. I am equally pleased to see from the estimates of revenue and expenditure tabled in front of us that the estimated deficit of this year in fact is less than what was originally envisaged. In fact, I think the $119 million noted here is more than 10% lower than the originally estimated deficit for this year. However, it is clear that we will no longer have the blessing of reserves by the end of next year and I think we should not be complacent and wait until then to think about it as the problem will not go away. Therefore, I hope the Council will pursue vigorously, Mr. Chairman, the point you have just made regarding an internal adjustment of the rate percentage, especially as the current rate percentage did not take into full account the massive strain on the Council's resources in some areas such as controlling hawkers, nor is what was decided over 5 years ago necessarily sufficient to meet the rising demand in the field of recreation, sports and culture of a society which has progressed rapidly and whose ambitions have been fuelled enormously by the progress we have made so far in recent years. It has always seemed illogical to me to have the Urban Council, to use your words, Mr. Chairman, driven to the wall with cap in hand while the Central Government will have a surplus approximately 10 times our deficit. With these remarks, Mr. Chairman, I support the motion.
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