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# HONG KONG URBAN COUNCIL
(B) The five year forecast of revenue and expenditure 1985–86 to 1989-90 in respect of each functional select committee was endorsed by Members during the period June and July 1985. The consolidated forecast for the Urban Council which determined the approved Provisional Acceptable Level of Expenditure for the Council's 1986-87 budget both in respect of the Council as a whole and the individual functional select committees was agreed by Members, as noted in Committee Minutes FIN/4/85 dated 31 July 1985.
(C) the Annual Budget 1986–87, which is now before Members.
May I now turn briefly to one of the most important and visible spheres of Council activities, capital works. In October this year, the Urban Council endorsed a Five Year Capital Works Programme covering the period 1985-86 to 1989-90. The programme provides for a total number of 127 major projects estimated to cost in the region of $2.2 billion with anticipated cash expenditure of the order of $1.57 billion over the five year period.
Finally, may I emphasize once again that this Council and the Department are ever conscious of the need to economize. This Budget has been carefully scrutinized by all select committees to ensure that Council's funds are wisely and productively spent in the creation of a better life style for the people of Hong Kong. The Department has been working steadily to achieve higher productivity and more value for money studies will be carried out in the ensuing year. I now invite the Vice-Chairman, Mr. FORSGATE, who is also Chairman of the Council's Finance Select Committee, to second the motion.
Vice-Chairman (in English):—Mr. Chairman, in seconding the motion I would like to make a few general points, the paper at Appendix A which I intended to read is all in your possession, so I will not read it out because I think the meeting had been going on quite long enough. Most of the salient points in this paper have been made earlier in the S.C.W.C. at this meeting and the various select committees. There are two things which I would like to say, one is to congratulate and thank the C.T.A. and his staff and D.U.S. for a first class effort in producing the budget, a very good job and very well done. I think they well deserved the accolade from the Council. We are difficult to deal with I know, but at least the department should have the satisfaction that the budget had so far been approved, and we hope to obtain final approval from you later on. I would also like to thank members of the Working Party, Messrs. Peter C. K. CHAN, Stephen LAU and on one occasion L. H. KWAN who backed me up in some very tortuous and long arguments with the members of Finance Branch, so ably backed with facts and figures from the department. A thank you also to Gus CHUI, John HEYWOOD, who did a great job in helping us put our case across so successfully to the Finance Branch so that this budget for 1986-87 will indicate we have, more or less, what we asked and with a modest surplus to boot but not anything to be carried away with. It will require careful management by all select committee chairmen throughout the year and whenever opportunities arise to augment our income, by all means we should grab them with both hands.
# HONG KONG URBAN COUNCIL
Sir, I now have much pleasure in seconding the motion.
MR. SUTKE (in English):—Mr. Chairman, perhaps it is a little unusual to speak on this particular motion, and I'm sorry but I have not seen the Vice-Chairman's speech, which is not in my bunch of papers, so I hope I am not repeating anything that he may have said. The estimates for revenue and expenditure for 1986-87 have gone through every Select Committee of the Council and have therefore been looked at thoroughly by all the Councillors. To the best of our ability we have decided that these figures are as good a forecast as we can get under present circumstances, and we must compliment the experts in the U.S.D., both financial and otherwise, on having completed a very difficult job on time.
However, in the interest of our accountability for public monies, I want to make a few remarks on where I think in future we could do better.
When I first joined the Council five years ago, I asked privately for cost studies on our Abattoirs and on our garbage collection, especially regarding the vehicles and personnel used. Since then a great deal of work has been done by the Department and there has been considerable improvement in both areas, with costs being reduced. However, I think that these have not gone far enough and the greatest problems seem to lie in our interface between the Council and the Government. We are bound by some very awkward Government regulations. For instance, we cannot sell our vehicles because it is Government policy, note Government policy not U.C. policy, that vehicles licensed without tax cannot be sold, they must be used until they come to the end of their useful life and then can only be sold for scrap. This is economic nonsense. In the commercial world a vehicle which is used too long costs considerable amounts of money because repair costs increase geometrically with use and age. So every vehicle has an economic as well as a useful life and it would be far better for the tax payer if Government allowed us to sell our vehicles when they are at the end of their economic life, not at the end of their useful life.
And talking about repairs, the costs for these are artificially inflated because we have to pay 40% on-cost to the Government. In fact, we have to pay 40% on-cost to the Government for every Civil Servant we employ. I am quite sure that this 40% Government overhead is far too high. If we either employed our own staff or privatized many of our operations, we could cut out this 40% on cost and thereby save considerable amounts of money.
The Council is soon entering a period of change and I hope that the points I have made here in public, and others I have made at various committee meetings, will be researched and duly considered by the old and new Councillors
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HONG KONG URBAN COUNCIL
(B) The five year forecast of revenue and expenditure 1985–86 to 1989-90 in respect of each functional select committee was endorsed by Members during the period June and July 1985. The consolidated forecast for the Urban Council which determined the approved Provisional Acceptable Level of Expenditure for the Council's 1986-87 budget both in respect of the Council as a whole and the individual functional select committees was agreed by Members, as noted in Committee Minutes FIN/4/85 dated 31 July 1985.
(C) the Annual Budget 1986–87, which is now before Members.
May I now turn briefly to one of the most important and visible spheres of Council activities, capital works. In October this year, the Urban Council endorsed a Five Year Capital Works Programme covering the period 1985-86 to 1989-90. The programme provides for a total number of 127 major projects estimated to cost in the region of $2.2 billion with anticipated cash expenditure of the order of $1.57 billion over the five year period.
Finally, may I emphasize once again that this Council and the Department are ever conscious of the need to economize. This Budget has been carefully scrutinized by all select committees to ensure that Council's funds are wisely and productively spent in the creation of a better life style for the people of Hong Kong. The Department has been working steadily to achieve higher produc- tivity and more value for money studies will be carried out in the ensuing year. I now invite the Vice-Chairman, Mr. FORSGATE, who is also Chairman of the Council's Finance Select Committee, to second the motion.
Vice-Chairman (in English):—Mr. Chairman, in seconding the motion I would like to make a few general points, the paper at Appendix A which I intended to read is all in your possession, so I will not read it out because I think the meeting had been going on quite long enough. Most of the salient points in this paper have been made earlier in the S.C.W.C. at this meeting and the various select committees. There are two things which I would like to say, one is to con- gratulate and thank the C.T.A. and his staff and D.U.S. for a first class effort in producing the budget, a very good job and very well done. I think they well deserved the accolade from the Council. We are difficult to deal with I know, but at least the department should have the satisfaction that the budget had so far been approved, and we hope to obtain final approval from you later on. I would also like to thank members of the Working Party, Messrs. Peter C. K. CHAN, Stephen LAU and on one occasion L. H. KWAN who backed me up in some very tortuous and long arguments with the members of Finance Branch. so ably backed with facts and figures from the department. A thank you also to Gus CHUI, John HEYWOOD, who did a great job in helping us put our case across so successfully to the Finance Branch so that this budget for 1986-87 will indicate we have, more or less, what we asked and with a modest surplus to boot but not anything to be carried away with. It will require careful management by
HONG KONG URBAN COUNCIL
all select committee chairmen throughout the year and whenever opportunities along to augment our income, by all means we should grab them should come with both hands.
Sir, I now have much pleasure in seconding the motion.
MR. SULKE (in English):—Mr. Chairman, perhaps it is a little unusual to speak on this particular motion, and I'm sorry but I have not seen the Vice- Chairman's speech, which is not in my bunch of papers, so I hope I am not repeating anything that he may have said. The estimates for revenue and expenditure for 1986-87 have gone through every Select Committee of the Council and have therefore been looked at thoroughly by all the Councillors. To the best of our ability we have decided that these figures are as good a forecast as we can get under present circumstances, and we must compliment the experts in the U.S.D., both financial and otherwise, on having completed a very difficult job on time.
However, in the interest of our accountability for public monies, I want to make a few remarks on where I think in future we could do better.
When I first joined the Council five years ago, I asked privately for cost studies on our Abbatoirs and on our garbage collection, especially regarding the vehicles and personnel used. Since then a great deal of work has been done by the Department and there has been considerable improvement in both areas, with costs being reduced. However, I think that these have not gone far enough and the greatest problems seem to lie in our interface between the Council and the Government. We are bound by some very awkward Government regula- tions. For instance, we cannot sell our vehicles because it is Government policy, note Government policy not U.C. policy, that vehicles licenced without tax cannot be sold, they must be used until they come to the end of their useful life and then can only be sold for scrap. This is economic nonsense. In the com- mercial world a vehicle which is used too long costs considerable amounts of money because repair costs increase geometrically with use and age. So every vehicle has an economic as well as a useful life and it would be far better for the tax payer if Government allowed us to sell our vehicles when they are at the end of their economic life, not at the end of their useful life.
And talking about repairs, the costs for these are artificially inflated because we have to pay 40% on-cost to the Government. In fact, we have to pay 40% on-cost to the Government for every Civil Servant we employ. I am quite sure that this 40% Government overhead is far too high. If we either employed our own staff or privatized many of our operations, we could cut out this 40% on cost and thereby save considerable amounts of money.
The Council is soon entering a period of change and I hope that the points I have made here in public, and others I have made at various committee meetings, will be researched and duly considered by the old and new Councillors
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