1989 — Page 116

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HONG KONG URBAN COUNCIL

(2) If seats elected by the Grand Electoral College (or Election Committee) are to be added to the Legislature, the number of seats representing

functional constituencies should be reduced accordingly.

(3) The 'Separate voting mechanism' can be adopted for dealing with some

of the motions (of the Legislature).

(4) In the third term (of the Legislature), the Government of the HKSAR shall be in a position to review the composition and operation of the Legislature as well as solicit opinions of people from all walks of life and then make the necessary alterations and put them into practice. The Central Government shall not interfere.

Mr. Chairman, recent critics have revealed that some people are of the opinion that the most important factor to be considered in the development of the political system is not its convergence with the Basic Law but the views and wishes of Hong Kong people. I do not agree with this opinion. The reason is that if there is no convergence of the political systems before and after 1997, it will not only result in political instability but will also deal a further blow to the confidence of Hong Kong people, which will be detrimental to the stability and prosperity of our society in the transitional period. Certainly, the Governments of China, Britain and Hong Kong as well as the people of Hong Kong would not like to see this happen.

Of course, I understand that as there is a lack of deep and mutual understanding between Hong Kong people and the Chinese Government, there is bound to be a sense of rejection against each other. As a result, a sense of mutual trust is not yet established between both parties. This condition is aggravated after the June 4 incident. However, we should understand that this sense of rejection, antagonism and hard-line stance can offer no solution to the problems on the future political system of Hong Kong but will be detrimental to Hong Kong instead. Therefore, I believe that we must set the protection of the interests of Hong Kong as our major premise. We should seek the understanding of China through consultations (with China) and strive for the best arrangement (for Hong Kong).

Mr. Chairman, I hope that my views and suggestions expressed above will be useful to China, Britain and Hong Kong in solving the controversial problems over the future political system of Hong Kong.

With these remarks, I support the motion.

(Mr. Frederick K. K. FUNG and Dr. Samuel P. W. WONG arrived at 3.57 p.m.)

(Mr. FUNG Kwong-chung left the meeting at 4.04 p.m.)

(The Chairman declared a recess at 4.10 p.m. and the meeting resumed at 4.20 p.m.)

(Dr. Philip Kwok, Mr. Peter C. K. CHAN, Dr. Stan CHEUNG Tsang-kay, Messrs. Mok Ying-fan, Daniel WONG Kwok-tung and Albert Poon Shun-kwok left the meeting after the recess.)

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MR. LAM CHAK-PIU (in Cantonese):-Mr. Chairman, (I) Today, I would like to discuss the financial problem of the Council first. As the saying goes, 'It hurts feelings to talk about money.' However, it holds good only in the case of interpersonal relation. As we have to provide services to the public, we cannot do without money especially when the public now has higher and higher expectations of our services in this progressing society. Therefore we have a greater need for money to do our work. Undoubtedly, our major source of revenue comes from our share of the 3.5% of rates out of the 6% for urban area. The secondary sources of income are licence fees and the charges for other facilities. In fact, the ratio between these two main sources of

income is 4:1.

According to our Statement of Accounts ending November 1989, we have a deficit of over $180 million, which is more than three times the budget deficit of $50 million plus. The existing accumulated reserve amounts to $1.17 billion. If the present level of the deficit and the reserve remains unchanged in the next five years, this sum of accumulated reserve will be exhausted in 1992 or 1993. The future financial position of the Council really worries us.

Indeed, the effective measures to tackle the problem are to increase revenue and to exercise retrenchment.

1.

2.

We have only two ways to increase our revenue: (1) To raise the percentage of rates apportioned to the Urban Council and to allocate the full amount of rates to the Council. Then it will show that the Central Government is before fair and treats us equally with the Regional Council, and (2) To increase our fees and charges. However, it is obvious that fees and charges represent only a small percentage of our income. Any such increase will directly affect the benefits enjoyed by the public and probably has an adverse and profound effect on society. The most effective way to solve our financial problem is therefore to raise the rates percentage charges. This is the good measure to take in public interest. Retrenchment is the most effective means to achieve economy in respect of the administration of the Council. This will enable us to improve the efficiency and cut down unnecessary expenses, i.e. to obtain the same or even better results with minimum resources. As salary remains the greatest expenditure item of the Council, we should scrutinize the allocation of manpower resources throughout the Department so as to maximize the utilization of resources and to ensure that every Hong Kong dollar is spent on the most suitable civil servants and that the most effective municipal services are provided. I trust that in recent years as the Council's policy on cutting down expenditure has already taken effect we will certainly have better performance in the days to come.

(II) The hidden worry in the design of the political system: Undoubtedly, the June 4 Incident that took place last year was an event that shocked the world. China has since then fully tightened up its policy on Hong Kong. We can catch