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HONG KONG URBAN COUNCIL

Committee I must make the point that it is very difficult to forecast our

long term income accurately since both rates and other secondary sources of income such as licence fees, market rentals, etc. depend very much on the overall economic situation. This being the case, it is therefore very difficult to budget properly within our income. That said, we have always tried to live within our available resources and this year we have been more careful than ever to tailor our suit to the amount of cloth available. Now if that means that the fit of the suit in some areas may be a bit tight, and possibly the sleeves and trousers a bit short, I hope that chairmen of committees and Councillors sitting on these committees will bear with us because there is only HK$2.27 billion available and we have now done the best possible to divide it even-handedly between all the priorities the Council has.

At the same time, I want to congratulate the chairmen and members of the various Select Committees on the very careful scrutiny of all our expenses, and although we all know that there are always ways and means to become more efficient and save expenses, on the whole I think this Council is very cost effective. Perhaps this is the right point to say that several of the committees have criticized our maintenance costs both as regards building and vehicles and I would ask you, Mr. Chairman, when re-negotiating the MAA, you ask the Central Government to pay special attention to this point as there is a general belief in the Council that if we were able to effect our own repairs, it would be faster, more efficient, and cheaper than the present arrangements.

Let me also, in this connection, point out to the public at large and some District Board members in particular that if we are lacking in some areas the reason, more likely than not, is insufficient funds. If we cannot get the required financial resources from elsewhere within our budget to meet such demands then we will have a very good reason and basis to go to the Central Government's Finance Committee and the Legislative Council and tell them that we need a bigger share of the rates.

However, let me hasten to assure the public and especially our friends in the press gallery upstairs—to whom often bad news is good news, and good news is no news-that as far as I can tell now we should not need to ask for a bigger share of the rates this year or next, and possibly even the year thereafter. Let me at the same time also sound a word of warning-We are building more and more complexes and parks: Kowloon Park with grateful thanks to the Jockey Club, Hong Kong Park on the Victoria Barracks site, both of which will be wonderful showpieces, a superb Cultural Centre in Tsim Sha Tsui plus the new Art and Science Museums. All these new facilities will require a great deal of extra staff, equipment, maintenance and utility charges, and a lot of these will be coming on stream in two to three year's time. Inevitably, therefore, we will have to spend considerably more than we are spending now, which must of necessity have a major impact on our financial resource requirements. One hopes, of course, that Hong Kong's economy will keep on growing and that therefore our

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rate income will automatically grow with the economy so that although our total outgoings will be much higher, our income will rise proportionately and so our share of the rate may remain the same. But there is no guarantee that the rate income will increase so that income will match outgoings in the medium

term.

Now, to return to the present, I am happy to be able to tell the Council today that judging from present figures and subject to the usual unforeseen circumstances, we may have a surplus of about HK$45 million this year and we are budgeting to have a surplus of HK$15 million next year. If all is well that will add HK$60 million to our reserves which, by the end of the 1987/88 financial year should then stand at HK$361 million which is equivalent to 8 weeks' expenditure. In this connection, I should like to remind members that the MAA specifically instructs the Council to keep a reserve fund inter alia to meet contingent liabilities arising out of third party damage claims which, 14 years after the MAA was written, can run into much larger sums than envisaged then.

Quite apart from this, we have always felt very strongly that we should really have three months' expenditure available in our reserves and this must still be the aim of any Chairman of the Finance Committee, and is certainly my aim. But considering we shall have a balanced budget both this year and next, we are on the right road now.

The information contained in the budget paper now placed before members clearly shows how the available financial resources are employed on the many services and facilities provided to the Urban ratepayer.

Finally, members can rest assured that the Finance Select Committee will continue to exercise extreme vigilance and stringent financial control over the Council's financial resources.

I now take pleasure in seconding the motion.

(Mr. PAO Ping-wing arrived at this point

2.43 p.m.)

CHAIRMAN (in English):—Thank you, Mrs. Tu. That is quite irrelevant I hope the press will take note that any credits are to be attributed to the Chairman of the Finance Select Committee, not Mrs. Tu.

The question was put.

The motion was carried unanimously.

2. MR. LEE CHIK-YUET, CHAIRMAN OF THE MARKETS AND STREET TRADERS SELECT COMMITTEE, moved the following motion:-