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Secretary, this small increase will not be likely to cause any hardship to the public.
Secondly, to be introduced concurrently will be a change in the method of apportionment of the Urbco rate. The Council will receive the rates actually collected by the Government on Council's behalf, and not as previously, receiving its share on the basis of rates lawfully demanded. On a mathematical basis, the proposed method (on an actual collected basis) will yield an inferior return to the Council as against the existing method (on rates demanded). Furthermore, the actual net amount receivable will be affected by the incidence of rate relief. The Council will have to receive the rates with a similar discount to the Government in the years immediately following a revaluation of properties. Initially, the full financial benefits will not be so readily apparent, although in the subsequent years, as the incidence of rate relief lessens, this will gradually step up to the full amount.
Thirdly, after this rate adjustment, the Government will not be prepared to make any additional grants for future salary revisions.
The outcome of these proposals will bring in additional rates revenue of $363 million for the coming year 86/87 representing a 21 per cent increase over the revised estimate for the current year. As a result, the budget forecasts for the next two years will show surplus figures of $26 million and $16 million for 86/87 and 87/88 respectively.
To improve our financial strength, we should explore further the possibilities of increasing our revenue from the various facilities and services provided by our Council. Fee adjustments may have to be considered in areas where we are making losses such as in the operation of abattoirs, markets, swimming pools and the management of hawkers. Within limits, these fees may be increased to cover at least the major part of the administrative costs, in the fields where operators can afford higher fees without hurting their commercial viability, such as in the fees for liquor licences and restaurant licences. Also the rental of some of our cultural and entertainment venues, the fees may have to be raised to a more realistic level, even to the extent of including a tax element in our charges. Personal Emoluments is the biggest item in our expenditure (representing 57.4 per cent of the total in 1986/87 budget) and shows an ever increasing trend in money terms. It is a firm commitment of the Council and one that will not likely respond to any sudden or drastic adjustments without causing many ill-effects on our essential services. Therefore, it calls for caution whenever we endorse any expansion in size of our establishment. Assuming that with further improvement in staff efficiency, no fast growth of the establishment will be necessary, we still have to anticipate the annual salary adjustment, the percentage of increase of which is in line with the pay rise for the Government civil services. We should, therefore, be particularly prudent to provide for this requirement in our budget, more so in the knowledge that we are not going to get any future salary grant from the Government.
HONG KONG URBAN COUNCIL
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As a new item in this year expenditure budget, a sum of $115 million has been provided in the name of additional commitments to meet any unavoidable recurrent expenditure increases from such factors as inflation, future salary revisions and other items which we may not, at present, be able to precisely identify and forecast. I believe that it is a sound principle to include it as a regular item in our future budget and to adequately provide for it before granting any allocation to meet the expenditure of the various select committees. I would prefer to look upon this item as a form of reserve, and perhaps we may give it a specific name of 'contingency or reserve fund' to indicate its special functions which may include the capital works reserve fund, capital reserve and salary reserve fund. As the Government will not be giving out grants for salary revisions, we should transfer an appropriate amount to this reserve fund, as soon as we can identify such in the course of the year.
It is also to be noted that the budget for capital programmes will remain steady ranging from $304 million to $369 million over the next four years. I hope that inflation fuelled price rises will not substantially reduce the amount and the speed of the completion of capital projects, and that proper priorities will be allocated to the more urgent ones. I trust that this Council is always mindful and fully conscious of the need to economize and to be accountable to the public when any expenditure is approved.
To maintain the present pace of growth and development in our services, it is expected that by the year 89/90, the Personal Emoluments will increase to account for well over 64 per cent of total forecasted budget. With the capital works expenditure accounting for 12 per cent, these two items alone will have taken up 76 per cent of the total budget. This will leave only 24 per cent of the total budget for the other recurrent expenditure, with very little elbow room for unexpected circumstances. This Council may again be in a position to need additional revenue. If such is not forthcoming from another revaluation or desirable, the Government will have to seriously consider giving a portion of its properties, or if another increase in total rate percentage is deemed not own share of the rates to the Council.
With these few words, Mr. Chairman, I support your motion.
Mrs. Margaret Li (in English):—Mr. Chairman, with some $400 to spend per head of the urban population, it is our duty to use every dollar wisely and still up-grade our service to each and every one of them. My thoughts which follow, on recreation and sports are very much guided by these two considerations.
The amalgamation since 1 April, 1985 of a portion of the Recreation and Sports establishment of the former Recreation and Culture Department with the Urban Services Department is very much a case in point. Financially, this increases the burden of the Urban Council. Of paramount importance, however, is for such a marriage to be successful in terms of not only further cost-effectiveness and streamlined management and operational procedures, but also the maintenance of staff morale and increased professionalism. Such ingredients
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212
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HONG KONG URBAN COUNCIL
Secretary, this small increase will not be likely to cause any hardship to the public.
Secondly, to be introduced concurrently will be a change in the method of apportionment of the Urbco rate. The Council will receive the rates actually collected by the Government on Council's behalf, and not as previously, receiving its share on the basis of rates lawfully demanded. On a
mathematical basis, the proposed method (on an actual collected basis) will yield an inferior return to the Council as against the existing method (on rates
demanded). Furthermore, the actual net amount receivable will be affected by the incidence of rate relief. The Council will have to receive the rates with a similar discount to the Government in the years immediately following a revaluation of properties. Initially, the full financial benefits will not be so readily apparent, although in the subsequent years, as the incidence of rate relief lessens, this will gradually step up to the full amount.
Thirdly, after this rate adjustment, the Government will not be prepared to make any additional grants for future salary revisions.
The outcome of these proposals will bring in additional rates revenue of $363 million for the coming year 86/87 representing a 21 per cent increase over the revised estimate for the current year. As a result, the budget forecasts for the next two years will show surplus figures of $26 million and $16 million for 86/87 and 87/88 respectively.
To improve our financial strength, we should explore further the possibilities of increasing our revenue from the various facilities and services provided by our Council. Fee adjustments may have to be considered in areas where we are making losses such as in the operation of abattoirs, markets, swimming pools and the management of hawkers. Within limits, these fees may be increased to cover at least the major part of the administrative costs, in the fields where operators can afford higher fees without hurting their commercial viability, such as in the fees for liquor licences and restaurant licences. Also the rental of some of our cultural and entertainment venues, the fees may have to be raised to a more realistic level, even to the extent of including a tax elements in our charges. Personal Emoluments is the biggest item in our expenditure (representing 57.4 per cent of the total in 1986/87 budget) and shows an ever increasing trend in money terms. It is a firm commitment of the Council and one that will not likely to respond to any sudden or drastic adjustments without causing many ill- effects on our essential services. Therefore, it calls for caution whenever we endorse any expansion in size of our establishment. Assuming that with further improvement in staff efficiency, no fast growth of the establishment will be necessary, we still have to anticipate the annual salary adjustment, the percentage of increase of which is in line with the pay rise for the Government civil services. We should, therefore, be particularly prudent to provide for this requirement in our budget, more so in the knowledge that we are not going to get any future salary grant from the Government.
HONG KONG URBAN COUNCIL
Page 121 of 195
211
As a new item in this year expenditure budget, a sum of $115 million has been provided in the name of additional commitments to meet any unavoidable recurrent expenditure increases from such factors as inflation, future salary revisions and other items which we may not, at present, be able to precisely identify and forecast. I believe that it is a sound principle to include it as a regular item in our future budget and to adequately provide for it before granting any allocation to meet the expenditure of the various select committees. I would prefer to look upon this item as a form of reserve, and perhaps
we may give it a specific name of 'contingency or reserve fund' to indicate its special functions which may include the capital works reserve fund, capital reserve and salary reserve fund. As the Government will not be giving out grants for salary revisions, we should transfer an appropriate amount to this reserve fund, as soon as we can identify such in the course of the year.
It is also to be noted that the budget for capital programmes will remain steady ranging from $304 million to $369 million over the next four years. I hope that inflation fuelled price rises will not substantially reduce the amount and the speed of the completion of capital projects, and that proper priorities will be allocated to the more urgent ones. I trust that this Council is always mindful and fully conscious of the need to economize and to be accountable to the public when any expenditure is approved.
To maintain the present pace of growth and development in our services, it is expected that by the year 89/90, the Personal Emoluments will increase to account for well over 64 per cent of total forecasted budget. With the capital works expenditure accounting for 12 per cent, these two items alone will have taken up 76 per cent of the total budget. This will leave only 24 per cent of the total budget for the other recurrent expenditure, with very little elbow room for unexpected circumstances. This Council may again be in a position to need additional revenue. If such is not forthcoming from another revaluation of desirable, the Government will have to seriously consider giving a portion of its properties, or if another increase in total rate percentage is deemed not
own share of the rates to the Council.
With these few words, Mr. Chairman, I support your motion.
Mrs. Margaret Li (in English):—Mr. Chairman, with some $400 to spend per head of the urban population, it is our duty to use every dollar wisely and still up-grade our service to each and every one of them. My thoughts which follow, on recreation and sports are very much guided by these two considerations.
The amalgation since 1 April, 1985 of a portion of the Recreation and Sports establishment of the former Recreation and Culture Department with the Urban Services Department is very much a case in point. Financially, this increases the burden of the Urban Council. Of paramount importance, however, is for such a marriage to be successful in terms of not only further cost- effectiveness and streamlined management and operational procedures, but also the maintenance of staff morale and increased professionalism. Such ingredients
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