1997 — Page 563

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HONG KONG PROVISIONAL URBAN COUNCIL

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developed on the assumption that our level of charges has always been fair and reasonable and therefore it can be implemented across the board. I support the idea of freezing charges for one year in order to alleviate the public's burden.

However, if we look from the economic point of view, it is quite a different matter. Firstly, are all our charges unreasonable? I consider that there are some charges which are not reasonable, but generally this is not so. Not all the charges are unreasonable. Accordingly, I would examine the types of charges. There are three major types. The first is licence fees. The second is market rentals. The third type is charges for municipal facilities and venues. I consider that there is room for debate and discussion regarding the reduction of charges or municipal facilities (except markets), because this is a matter of subsidization. If we considered the level of subsidization to be too high, we could increase the charges but if not, we should reduce them. If we were to incorporate this into the overall economy and consider reduction, I think there would only be a couple of charges that meet the criteria and they are market rentals and licence fees. I consider them to be pegged to the market value. Our rentals are pegged to the market value because the market value is assessed by the Rating and Valuation Department, the so-called experts of the Government—I must emphasize the word 'so-called'—and then advice is given to the Urban Services Department. The Department then considers it and determines the rentals through the policy mechanism. The rentals are revised every two to three years, based on the assessment mentioned above. It was not until 1997 that increases in rentals began to be contained within the rate of inflation. They are therefore pegged to the market value. For years it has been my view that such a mechanism needs to be reviewed, because I believe and would see that a lot of markets in terms of their viability are out of line with the market value.

The example I have kept citing is the largest market in Hong Kong (Po On Road Market). Of the 767 stalls, more than 180 are not occupied. Different means are being considered to improve the viability of this market. Accordingly, I consider that rental reduction should not be implemented across the board. The rentals and charges of the various venues should be examined on an individual basis. My stance is that market rentals and licence fees should be considered first.

The third point is about financial sources. There is a need to seek financial resources but I don't support the idea of linking up financial sources with every administrative or policy decision or implementation by recovering all the losses from the Central Government. However, the message involved is already there. When discussions were held with the Government on the triennial financial provision, the message was already brought out clearly that if the Urban Council had a deficit in these three years, supplementary provision would be sought. The Urban Council has given a very clear stand and that is, it hopes its services for the public could be maintained. We hope to maintain all facilities and services, and should there be a deficit in these three years,

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