Daily Information Bulletin - 1970s - 1972 - MAR - ENG

 4000091 P.R.H. 7

HONG KONG GOVERNMENT

NFORMATION

SERVICES

DAILY INFORMATION BULLETIN

Wednesday, March 1, 1972

FINANCIAL SECRETARY PROPOSES REDUCTION IN RATES OF SALARIES TAX

To Ease Burden On Middle Income Wage Earners

Mr. Haddon-Cave Also Proposes Increased Car Parking Charges

*******

The Financial Secretary, the Hon. C.P. Haddon-Cave, when presenting

his Budget to the Legislative Council this (Wednesday) afternoon, proposed four tax concessions and an increase in car parking charges.

The proposed tax concessions are:

* Reduction in the rates of salaries tax to ease the burden on people in the middle income group, with effect from April 1;

* Reduction in the maximum rate of estate duty from 20 per cent to 15 per cent, with effect from April 1;

Abolition of the duties on hydro-carbon oils, (such as kerosene and liquified petroleum gas), other than furnace oil, aircraft spirit, motor spirit and automotive diesel oil used by road vehicles, with effect from 6 p.m. today;

* Abolition of the duty on methyl alcohol, with effect from 6 p.m. today.

The proposed increase in car parking charges at Government multi-storey

and open air car parks, to be effective from April 1, is as follows:

* The cost of monthly tickets for Government multistorey car parks to be raised from 3120 to 3200;

* Parking charges for Government open air car parks to be raised from 31*50 to 32.50 per half day;

The full ........

*

Wednesday, March 1, 1972

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* The full rate hourly charge at Government multi-storey car parks to be raised from 60 >ents to $1, with a minimum charge of 32 instead of 31*50;

* The charge for cheap period parking at Government multistorey car parks to be raised from 40 cents to 50 cents, with a minimum charge of 51.

The Financial Secretary told Council that his Budget proposals for 1972-75 would have the net effect of reducing the estimated surplus of 870*3 million to 346.9 million.

He also said he proposed to introduce shortly a bill to amend the Estate Duty Ordinance to enable small estates under 3100,000 to be dealt with summarily.

Mr. Haddon-Cave warned motorists they faced'the prospect of further increases in car parking charges in future years. Charges for on-street parking, he added, also needed to be raised.

Turning to the future, the Financial Secretary said he had two proposals to make for 1975-74.

These are:

• A new basis of assessment for salaries tax in which assessment will be made on income earned during the- current year;

* A reduction in the present rate charge of 17 per cent to 15 per cent. Landlords will only be able to claim refund of half of the rate, instead of the whole rate, charged on unoccupied premises.

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Wednesday, March 1, 1972

f REDUCED FUEL BILLS FOR HOUSEWIVES, FISHERMEN, INDUSTRIALISTS

There is good news in today’s Budget for housewives, fishermen, operators of restaurants and cooked food stalls as well as small manufacturers. Their monthly fuel bill is to be reduced.

The Financial Secretary, Mr. C.P. Haddon-Cave has proposed the abolition, as from 6 o’clock tonight, of the duties on hydro-carbon oils other than furnace oil, aircraft spirit, motor spirit and automotive diesel oil used by road vehicles.

These include kerosene and liquified petroleum gas used mainly for cooking and heating by domestic households and by foodstalls and restaurants*

An Order, made under the Public Revenue Protection Ordinance, was signed by His Excellency the Governor this morning.

The hydro-carbon oils affected cover a wide range of light oils used in industry, such as benzene, turpentine and solvents; treated automotive diesel oil used by food stalls, restaurants, certain industries, harbour launches and ferries and the fishing fleet.

Also affected are various mixtures of diesel oils used in small quantitie by restaurants, a few industries and marine vessels with old-type diesel engines; sludge oil used for the manufacture of putty and water-proofing compounds, lubricating oil, light oils and diesel oils used in various admixtures ranging from floor polishes to paints to insecticides.

In his Budget speech, the Financial Secretary said that all these oils at present attracted a duty of ten cents per gallon and liquified petroleum gas was dutiable at two cents per pound.

"These are low rates,” he said, ’’but it must be a cardinal rule of our indirect tax system that it does not bear on industrial costs or on the basic cost of living.

"Clearly, the duties on these oils offend this principle and I propose, therefore, that they should be abolished......”

Mr. Haddon-Cave said he expected the relief accorded to households using kerosene and L.P.G. for cooking would reduce the monthly fuel bill of the average household by seven per cent and four per cent respectively.

”The annual saving on the fuel bills paid by fishermen will range from 870 to 85,000 depending on size of craft.”

He told Legislative Council: ’’The total cost to the revenue in 1972-75 will be of the order of 316.2 million, of which about 36.7 million will be in respect of kerosene and liqaidied petroleum gas, 31.6 million in respect of diesel oil used by launches, ferries and the fishing fleet, and the remainder (S7»9 milli in respect of the various oils used by industry.” ' ......•


Wednesday, March 1, 1972

- 4 -

HONG KONG’S OVERALL ECONOMIC GRC'/TH RATE ’ZELL BEGIN TO PICK UP

IN SECOND &iLF OF 1973

Prediction By Financial Secretary In Budget Address

********

The Financial Secretary predicted today that Hong Kong’s overall economic growth will remain at around ten per cent in 1972 and in the early months of 1973 but will begin to pick up again within 18 months, that is, in the second half of 1973-

He made the prediction in his Budget speech in the Legislative Council when ho reviewed the economic background against which the . Colony’s draft estimates of revenue and expenditure have been prepared* He said that in the latter half of 1973 income and employment levels of the major economies of Europe and North America were expected to rise and world trade was expected again to expand.

His prediction was based on the assumption that undue discrimination would not be exercised against Hong Kong by the governments of Hong Kong’s major trading partners, cither in the context of particular sectors of Hong Kong’s trade or in the context of the Generalized Preferences Scheme for developing countries.

From preliminary estimates of Hong Kong* s national income for the six year period 1966/71, prepared by the Census and Statistics Department, it seemed that the effect of the 1967 disturbances was most marked in 1968, when the Colony’s overall growth rate was of the order of four to five per cent only. He defined national income as Gross National Product at current market prices.

/In the. ••••••

Wednesday, March 1, 1972

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In the previous year, 1967, the rate was fourteen to fifteen per cent, despite the disturbances, because the process of recovery from the difficulties experienced in 1965 and 1966 by the banking and construction sectors was beginning to get under way.

"But by I960 a surge movement was beginning to build up, the Gross Domestic Product increasing by 20 per cent in that year and by rather more than 20 per cent in 1970.

’’But there was an easing off in this remarkable movement in 1971 to around ten per cent and I do not think wc- can expect to do better than this in 1972 or in the early months of 1975.”

The Financial Secretary said this prospect of a slower advance over the next twelve to 18 months was entirely due to the outlook for export earnings.

The external demand for Hong Kong’s products was so strong in 1968 and 1969 that the Colony’s earnings increased by 25 per went in each of these years. They eased off a little to 17m per cent in 1970 and to 11# per cent in 1971-

He thought there might bo a further easing in 1972 before a resurgence of the rate of growth in 1975*

The Financial Secretary said that although the manufacturing sector was dominant in Hong Kong’s economy, contributing about 43 per cent to the Gross National Product, the economy’s strong external liquidity position meant two things:-

* Firstly, there need be no brake for the tine being on the present high level of activity of other sectors^ such as building and civil engineering;

♦ Secondly, earnings of tourism and services should be well maintained•

/’’Thus the »•••••

Wednesday, Narch 1, 1972

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"Thus the rate of growth of imports, other than that element associated with the easing in the rate of growth of domestic exports, Should be maintained, for there will be no need for the banking system to reduce credit facilities.”

Net balances due from banks abroad stood at $6,400 million at the end of 1971 compared with $4,900 million at the beginning.

At the same time, the Financial Secretary pointed out, the Government's strong reserve position, which he termed a legacy of Sir John Cowperthwaitc's "wise and firm handling of our affairs during the past ten years," would enable Members of the Legislative Council to contemplate with "eqanimity" the Draft Expenditure Estimates for

1972/75-

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Wednesday, March 1, 1972

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FINANCIAL SECRETARY SOUNDS NOTE OF CAUTION

ON INVESTMENT GROWTH PERFORMANCE

Rate Of Investment Growth Is Slowing Down: Mr. Haddon-Cave »<**«**

Hong Kong must not be "too complacent" about its investment growth performance in recent years, the Financial Secretary, Mr. C.P. Haddon-Cave said today.

"At any rate," he added, "before satisfying ourselves that adequate provision is being made for depreciation and additions to our stock of fixed capital assets."

The Financial Secretary was speaking at today’s Budget meeting of the Legislative Council.

He said Hong Kong’s performance in the past seven years had been erratic. After reaching a peak of over 33,000 million in 19$5, gross investment in fixed assets declined continuously down to less than 32,000 million in 1968.

This trend, however, was sharply reversed in the following three years. In 19&9, the figure rose to 32,500 million, in 1970 to 33,500 million and "possibly to 34,000 million last year."

"The rate of growth of investment is now slowing down, but more so in plant, machinery and eyaipment rather than in land, buildings and other construction," he said,adding that the rising trend in expenditure on Government’s public works programmes was a significant factor

/In the ••••

Wednesday, March 1, 1972

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In the last three years, gross investment had been running at about 21 per cent of Gross Domestic Product. ’’This is on the low side: in Japan it is 35 per cent and in Taiwan and Korea it is said to be 2? per cent and 27 per cent respectively.”

The Financial Secretary suggested that Hong Kong should keep ”a watchful eye” on this aspect of the Colony*s economic position during the next few years, bearing in mind that, for the most part, ”our investment has been directed to the most productive purposes and that the capital assets created have been very intensively used,” ”0n the other hand,” he went on, ”it is possible to argue that, compared with some other countries, we have devoted a smaller proportion of our investment to the development of the infrastructure.”


/9

Wednesday, March 1, 1972

- 9

HONG KONG IS NO'- MUCH MORE DEPENDENT ON INVESTMENT

FOR INCREASED PRODUCTIVITY

Budget Speech Of The Financial Secretary

*•*««**

Hong Kong is now much more dependent on investment for increased productivity, the Financial Secretary, Nr. C.P. Haddon-Cave, said in his Budget speech today.

Speaking in the Legislative Council, the Financial Secretary said the growth of Hong Kong’s economy was today dependent upon the annual increase in the size of the economically active sector of the population, the skills with which it was equipped and the increase in productive capacity through new investment.

The employment situation today was in marked contrast to the 1950s when ’’large tranches” of unemployed and under-employed resources were available to be drawn into the productive system for use on an intensive basis,

’’This is the way the economy expanded,” Mr* Haddon-Cave explained, He asked: Would the easing of Hong Kong’s growth rate in 1972/73 lead to any pockets of unemployment appearing?

Or would it involve, via an easing of the tight labour market of recent years, no more than a falling off in internal inflationary pressures and a reduction in labour turn-over?

Mr, Haddon-Cave said that^ as regards industrial employment, Hong Kong recorded increases in every quarter since 19^7 until September last year when the total stood at 613,000*

/However, •*•<

Wednesday, March 1, 1972

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However, the growth of registered industrial employment had been levelling off in recent years - from 14 per cent in 1968 to eleven per cent in 19&9 to five per cent in 1970 and to three per cent in 1971• "This has occurred despite improved coverage of our statistics and despite the growth of domestic exports in the periods by total value they increased by 85,321 million or by 6j per cent between 1968 and 1971 and the price factor did not account for more than 22 per cent of this increase."

The Financial Secretary said that productivity per man hour had improved.

This was borne out by the fact that there had been a marked slowing down in the growth of industrial employment at a time when exports and the economy, as a whole, had been growing much faster.

He pointed out that there was an actual decline in registered industrial employment in December, 1971 of 8,000 to 605,000.

"I believe this is to have been largely seasonal coupled with the recession in the wig-making industry and relatively minor cut-backs in plastics, woollen knitting and cotton spinning and the disruptive effects of the dock strike in the western seaboard ports of the United States."

Increases in non-industrial employment in the second half of 1971 more than offset this decline and at the end of 1971, industrial employers had notified the Labour Department of 17,600 vacancies.

The Financial Secretary said that, although industrial employment was not likely to increase more than marginally in 1972, "there is no prospect of pockets of unemployment building up."

/On the other


Wednesday, March 1, 1972 - 11 -

On the other hand, he continued, it should not be forgotten that the age structure of the population was such that each year a large number of young persons was coming on to the labour market.

Preliminary results of the 1971 Census indicated that the economically active population consisted of over one million men and half a million women, a total of over 1,500,000 of whom 42 per cent were in manufacturing.

"This is expected to rise to 1,700,000 in 1973/’ he added.

Wednesday, March 1, 1972

- 12 -

GROWTH RATE OF REVENUE EXPECTED TO EASE OFF Consistent With Immediate Economic Prospects *******

The Financial Secretary, the Hon. C.P. Haddon-Cave anticipates an increase in recurrent revenue but a drop in capital revenue in the coming financial year.

Speaking on the Budget in the Legislative Council today, he said the recurrent revenue at SJ,U4O million represented a nine per cent increase over the revised estimate for 1971/72. Capital revenue at . 8287 million represented a six per cent decline on the revised estimate for the current year.

Total revenue at 83,727 million was thus seven per cent higher than the revised estimate for 1971/72.

Mr. Haddon-Cave said the revised estimate for 1971/72 was 13 per cent up on 1970/71 which, in turn, was 24 per cent up on 1969/70.

"In other words, I expect the rate of growth of revenue to ease off again, but I believe this to be consistent with the view I have taken of our immediate economic prospects, remembering that the yields from earnings and profits taxes will be determined by earnings and profits recorded in the year 1971/72.”

The Financial Secretary said it was nevertheless very satisfactory to be able to estimate for an increase in revenue of 8259 million, making a total increase in the three years ending 1972/73 of 81,246 million, or just twice the increase of 8663 million achieved in the three previous years ending 1969/70.

/He said this ••••»«

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Wednesday, March 1, 1972

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He said this was satisfactory particularly as additional revenue from rates and property tax had again to be excluded because of the postponement of the revaluation of property values.

On recurrent revenue, Mr. Haddon-Cave estimated the yield from earnings and profits taxes would increase by $110 million to 31,019 million or by 12 per cent; and from taxes and charges on activities during the year by $167 million to 32,421 million or by seven per cent.

Water revenue was put at 3167 million or $45 million up on this year because of the new price of $4 per thousand gallons to be paid by non-domestic consumers from April 1 next and assuming supply restrictions would not be necessary.

The Financial Secretary said the estimate of 3222 million for interest earnings was 315 million up on this year1s figure because additional sums would become available for investment but, of course, it was difficult to predict the trend of interest rates though the likelihood was for some reduction.

Turning to capital revenue, Mr. Haddon-Cave said the estimate for land sales was down by $59 million on this year’s revised estimate for fewer lots would become available for auction and premia in respect of regrants of expired leases might not reach this year’s figure of $45 million.

The only other item worth of particular mention, he said, was the $50 million expected from the sale of taxi concessions.

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Wednesday, March 1, 1972

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FOUR PER CENT RISE IN CONSUMER PRICE INDEX EXPECTED TO 1972

Budget Speech Of Financial Secretary

*******

The rise in the Consumer Price Index in 1972 is expected to be about the same as in 1971 - an increase of only four per cent.

This was stated in the Legislative Council today by the Financial Secretary, Mr.. C.P. Haddon-Cave, when presenting his Budget proposals.

The Consumer Price Index, after rising by three per cent in 1969 and seven per cent in 1971, registered only a four per cent increase in 1971*

The Government’s decision in 1971 to maintain the gold parity of the Hong Kong dollar, he told Legislative Council, ’’will mean that import prices will be relatively stable, thus protecting both industrial costs and the cost of living.”

Speaking on the situation in the monetary sector, the Financial Secretary said the general picture revealed by the basic statistics was one of great strength and a tribute to the banking community.

Currency in circulation at the end of 1971 was 42,932 million • an increase of nearly 14 per cent on December, 1970 when it was $2,578 million.

Extra currency issues for the 1971/72 Christmas and Lunar New Year holidays amounted to $658 million compared with 4615 million in 1970/71 and $459 million in 1969/70.

/Repeating the •••••

/

- Wednesday, March 1, 1972

- 15 -

Repeating the words of Sir John Cowperthwaite in his 1971 Budget speech, Mr. Haddon-Cave said this was "remarkable evidence of the growth of our wealth and of its wider distribution among the people.”

Bank deposits at the end of 1971 stood at 318,785 million or two and a third times the low level of 37,846 million to which they fell in September, 1967, having risen in 1971 more sharply, at 26 per cent, than in any recent year since the post-emergency year of 1968 when currency flowed back to the banks as confidence was re-established.

Loans and advances in 1971, he continued, could hardly be expected to keep pace with this "rapid widening" of the banks’ credit base; but nevertheless, they increased by 22 per cent to a record high of 311,856 million, representing 65 per cent of deposits.

"So the banking system as a whole was well lent up, though the pattern of advances shifted marginally away from manufacturing in favour of other sectors, including finance houses, private individuals and inter-bank lending.

”1 am not entirely satisfied that the banking system is able adequately to meet the legitimate credit needs of all types and sizes of manufacturing enterprises and I shall have more to say on this later on.”

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Wednesday, March 1, 1972

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COST OF BASIC GOVERNMENT SERVICES KEPT AT STEADY LEVEL To Enable Substantial Increases In Spending On Social Services «*««*«*

Substantial increases in expenditure on developmental and social services have been made possible because Government has succeeded in keeping the relative cost of basic services, such as general administration and law and order,steady at around 17 per cent of total spending.

This was stated by the Financial Secretary, the Hon. C.P. Haddon-Cave, at today’s Budget meeting of the Legislative Council.

He urged Members of Legislative Council to study closely two appendices to the 1972-73 Draft Estimates. These analyse estimated expenditure by function and also the changing pattern of spending for the eleven years ending 1972-73 compared with the expenditure proposals for 1972-73 and the forecast of expenditure for the three years ending 1975/76.

Mr. Haddon-Cave said the forecast for 1973-74 was for u total expenditure of $4,505 million, a $848 million increase on 1972-73i largely due to a ’’leap forward” of 3557 million in capital expenditure, followed by smaller increases thereafter. He stressed, however, that these figures were subject to many qualifications.

The form of the Draft Estimates, he said, followed the usual form.

”We have persevered with our efforts to ensure that the layout of each estimate reflects the administrative organisation of the department concerned so as to indicate the manner in which the funds provided by the Legislature will be spent but we are not yet satisfied that the layout is entirely satisfactory in every case.

/The Financial

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" Wednesday, March 1, 1972

- 17 -

The Financial Secretary then went on to describe the scope and content of the Memorandum Notes at great length, not so much for the benefit of Members of Legislative Council but to stimulate the interest of the public in ’’this compendious study of the Government’s activities and plans .and the organisation of the public services.”

Mr. Haddon-Cave said the Draft Estimates was the end result of three to four months of intensive work by the Finance Branch, beginning with the processing of departmental draft estimates.

He expressed his gratitude to his colleagues in all divisions of the Finance Branch for their ’’loyal and painstaking efforts” and to heads of departments for their ’’help and understanding” during what was ’’always a hectic and difficult period.”

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FINANCIAL SECRETARY’S BROADCAST TALK

Text Contained In D.I.B. Supplement

»«»*•*«*

Note to editors: The full text of the Financial Secretary’s

10-minute broadcast talk on the Budget over the Colony’s radio and television stations this (Wednesday) evening is contained in a Supplement to the Daily Information Bulletin today.

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Wednesday, March 1, 1972

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INCREASED I'jONTHLY RATES OF PUBLIC ASSISTANCE

Proposals Put Forward For Improving Public Assistance Scheme

*********

The Director of Social Welfare has put forward proposals for improving generally the Public Assistance Scheme and increasing, by about 60 per cent, the monthly rates in the sliding scale of assistance.

Announcing this in his Budget speech today, the Financial Secretary, hr* C.P. Haddon-Cave, said this proposal, provision for which had not been included in the Draft Estimates; would be pv.t shortly to the Finance Committee of the Legislative Council.

The Financial Secretary said the increased monthly rates of assistance were being proposed to take account both of increases in the cost of living since 1970 and of certain essential items of expenditure for which no account was taken in the existing le\e?.s of assistance.

Mr. Haddon-Cave said hrs predecessor, while advocating for some years improvements to the old pre-'*. 70 public assistance scheme, did so with two qualifications which he must endorse without reservation.

The first qualification was that the rates of assistance should not be such as to have an adverse effect cn employment and wages•

"Because they take account of cdditi^nal essential items of expenditure, the revised rates, if approved, will be closer to wages prevailing today than the present rates were to wages in 1970."

He was reasonably satisfied, from the results of the scheme so far, that the gap between the rates of assistance and \ages would be sufficient.

/The second ••••••••

Wednesday, } arch 1, 1972

The second qualification was that, tc guard against- abuse and malpractice, public assistance should be carefully controlled and administered.

••To achieve this, we have had the benefit of the services of an officer experienced in public assistance from the British Civil Service; and this Council has approved substantial increases in the establishment of the Public Assistance- Division of the Social ' tel iT'.rt.* Department-.

’’This means also that • c can be reasonably sure that the- scheme is helping those* who arc least able tc support themselves and, in particular, the elderly, the widowed, the sick and the disabled; and that it is not, as a result of inadequate administration, affecting the incentive to work and to be self-supporting. ’•

lir. Haddon-Cave said that payments in public assistance in 1971-72 were likely to be £12 million.

To the estimate of 'iV/'b million for 1972-73 would have to be added sorre $1J million in respect of the present 14,000 tc 1^,000 cases if Finance Commit tec-endorsed the nov* rates of assistance and other refinements now proposed.

/20

* Wednesday, harch 1, 1972

2<

PILOT SQ' I'j; FC? LOAFS TO SriALL ILDUSTRIAL ENTERPRISES To Buy fore Efficient machinery, Equipment * * •< /

Government has agreed to a pilot achunc providing for loans, ranging between $50,000 and ^250,000 an) totalling up to 30 million, to small ‘ industrial enterprises to help them in buying machinery and equipment.

fmnouncing this in his Budget speech in the Legislative Council today, the Financial Secretary said the .;cl^ r>* would b» nut into operation, subject to Finance Comittec’s accc-ptanc- . : the financial liability involved, as soon as the necessary arrangements could be finalised by the Director of Commerce and Industry.

He said the proposal, provision for which had not been included in the? Draft Estimates, would be jut to Finance Committee- very shortly.

The Financial Secretary sail that small industrial enterprises "have played, and will continue to •lay” ,.n important part in Hong Kong’s economy.

”It is essential that these nmoll enterprises should participate in the process of upgrading our industry nd increasing its productivity through the installation of more efficient rackin ry and equipment and the adoption of more up-to-date management practices.”

A committee appointed by th< Trade and industry Advisory Board has prepared a scheme designed to make loans ir.or<^ easily available, at reasonable rates of interest, through the banking system to small firms to assist then; in purchasing equipment and machinery.

/The committee .......

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Wednesday, March 1, 1972

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The committee has defined small firms as those employing less than 200 workers and having not more than 4600,000 in proprietors' funds.

The Financial Secretary said that firms of this size accounted for more than 95 per cent of all factories registered with the Labour Department.

He told Council: "As the loans envisaged are not of the kind which the banking system has traditionally undertaken, except for a few customers well known to them, the scheme provides for some degree of government guarantee of such loans, to be given after a thorough appraisal by the Productivity Centre of the technical feasibility of each project.

"I am happy to say that the Government has now agreed to a pilot scheme providing for loans ranging between v50,000 and 3250,000 and totalling up to w}0 million.

"This scheme will be put into operation as soon as the necessary arrangements can be finalised by the Director of Commerce and Industry provided, of course, Finance Committee accepts the contingent liability involved and approves funds for administrative overheads."

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Wednesday, Karch 1, 1972

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EXPENDITURE FOR NEXT FINANCIAL YEAR ESTIMATED AT ->3,650 KILLION Increase Of 25 Per Cent Over 1971/72 **;***«^

The total estimated expenditure in the next financial year amounting to >3,657 million represents on increase of >727 million • or 25 per cent over the revised estimate for 1971/72.

This is by far the largest increase ever, and had only been exceeded twice before -- in 19^8/A9 and in 1950/51* But these were hardly comparable years as the Government was. then in the process of re-establishing services after the war.

Giving these figures in presenting his Budget in the Legislative Council today, the Financial Secretary, the Hon. C.P. Haddon-Cave said the increase followed upon increases of 20 per cent on actual expenditure in 1970/71 which in turn was an increase of 21 per cent on 1969/70.

The average level of actual expenditure in the three years ending 1969/70 was .1,890 million while the average for the three years ending 1972/73 worked out at just over =3,000 million.

The Financial Secretary said it was true the average capital expenditure in the three years 1969/70 was, at ^03 million, well down on the previous three years, but an increase in the three years ending 1972/73 as actual spending on the Public orks Programme began to get under way again, was to be expected. However, the increase, at >823 million, was substantial.

/The increase .••••

Wednesday, March 1, 1972

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The increase on recurrent account was an important element in the situation also, Mr. Haddon-Cave said. Average recurrent expenditure in the three years ending 1969/70 was 31,MJ7 million and would rise to 32,189 million in the three years ending 1972/73-

’’This is an increase of no less than 47 per cent which may. bo compared with the increase of 104 par cent in capital expenditure,” he said.

Mr. Haddon-Cave drew attention to the differences between the draft estimates for 1972/73 and the re* vised estimates for 1971/72*, and said when one examines these differences the role of expenditure on recurrent services began to look even more significant. Of the overall increase of 3727 million, 3J84 million was on recurrent account and 33^3 million on capital account.

Dangerous High Level

’’This means that, in the coming year, recurrent expenditure as a proportion of recurrent revenue will reach the dangerously high level of 73 per cent, compared with 68 per cent this year. We should aim to keep 30 per cent of recurrent revenue available to finance the deficit on capital account and I hope, therefore, the margin between recurrent revenue and expenditure will widen again in 1973/7^-”

There were two main elements in the increase of 3384 million in recurrent expenditure. One was civil service emoluments, amounting to 3218 million. The other was recurrent subventions, amounting to 373 million.

/As regards .....

Wednesday, March 1, 1972.

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As regards the civil service, the Financial Secretary said if the Draft Estimates were approved the establishment would be 90,656 permanent posts and 7,809 supernumerary posts. This represented together an increase of 4.3 per cent over a year ago. The increase was the fourth lowest since 1960/61.

As regards recurrent subventions, he said these nov» accounted for 23 per cent of total recurrent expenditure, the 1972/75 estimate being no less than <>579 million representing an increase of ,>73 million on the revised estimate for 1971/72.

Mr. Haddon-Cave said some ..-47 million of the increase was for aided schools, including nearly j/700,000 for the Polytechnic — being the first instalment in an expensive project.” If the now salary scales for the teaching service were applied to the aided sector in 1972/73» extra provision required for recurrent subventions would be of th^ order of ^28 million.

Medical Subventions

Another -i»10 million of the increase of >47 million was required for aided medical institutions subvented on a deficiency grant basis and later on, if salary scales were adjusted, a further 38 million would have to be sought.

Referring to social welfare subventions, the Financial Secretary said the estimate of almost ^»20 million represented an increase of over 22 per cent on the revised estimate for 1971/72, or 61 per cent on actual expenditure in 1970/71.

With several unimportant exceptions, he said, the estimate for next year amounted to acceptance in toto of the recommendations made by the Social Welfare Advisory Committee.

/Mr. Haddon-Cave.••.

Wednesday, March 1, 1972 - 25 -

Mr. Haddon-Cnve expressed thanks to the Director of Social Welfare and the members of the Social Welfare Advisory Committee for the time and effort they had spent on examining more than 70 applications and formulating recommendations on each one of them.

Dealing with the capital account, the Financial Secretary said of the increase of 3343 million, 327 million was for departmental special expenditure, 336 million for capital subventions and 3280 million for the Public A'orks Programme.

Capital Account

The 1972/73 estimate for capital subventions was ^134 million compared with the revised estimate for this year of 397 million, despite an expected decline of 38 million in spending by the universities. Of the estimated total, 342 million was required for aided schools, mainly for the expanded secondary school programme, and 34 million for hospital development including >29 million to meet payments in respect of the United Christian Hospital at Kwun Tong and the Centenary Block of the Tung Wah Hospital. Of the 329 million sought for these two projects, 311 million is for revotes.

Commenting on the Public Works Programme, Mr. Haddon-Cave said an examination of the Draft Estimates would show how heavily the balance of the programme was weighted in favour of water supplies and by roads, housing, medical facilities, urban amenities and airport development in that order.

The Financial Secretary sounded a warning on the main project in the water programme, that is the High Island Scheme. He said the cost was escalating rapidly and the Public Works Sub-Committee would shortly be asked to consider recommending a very substantial increase in the approved project estimate of 39^8 million.

/He concluded: ••••

'.Wednesday t Karch 1, 1972

. - 26 -

He concluded: "Perhaps there is some consolation to bv found in the fact that I am optimistic about our chances of raising a loan from the Asian Development Bank towards the cost of our million gallon a day single purpose desalting plant estimated to cost

<’460 million."

Wednesday, March 1, 1972

- 27 - •

REVIEW OF REVENUE AKD EXPENDITURE IN 1971/72 Revenue Increase Of $397 Million Third Largest On Record

The revised estimates of revenue and expenditure for 1971/72 as shown in the Draft Estimates for 1972/73 arc put at $3»^68 million and $2,930 million respectively, yielding a surplus of J 538 million.

’’However, I have a distinct feeling that when the accounts arc closed the surplus will be around $700 million for I expect revenue to be higher than presently estimated by 2 to 3 per cent and expenditure lower by 1 to 2 per cent,”

The Financial Secretary, the Hon. C.P. Haddon-Cave, stated this today when he presented his Budget proposals to the Legislative Council.

He said although the rate of growth of revenue in 1971/72 at 13 per cent was loss than in the two previous years, 1970/71 and 1969/70, when it was 24 per cent and 19 per cent respectively, it was still higher than in any other year since 1962/63; and the increase at $397 million was the third largest on record and w90 million more than total revenue 20 years ago in 1931/52.

’’Clearly we are continuing to enjoy a flush of revenue as our economy continues its post 1967/68 surge movement. Whether we can expect this surge movement to continue in the coming months and, if so, at what rate, is a question I shall be considering later in this speech,” the Financial Secretary said.

/He regarded ..•

Wednesday, March 1, 1972

- 28 -/ He regarded recurrent revenue, which broke through the 33,000 million barrier to reach ^3,164 million only a year after total revenue had done this as one of the most significant features of the revenue picture in 1971/72.

Revenue from earnings and profits taxes increased by 17 per cent; Stamp duties due to the 1971 stock market boom increased by no less than '378 million or 61 per cent; motor vehicle taxes will exceed oven last year’s record figure of 339-7 million by :A.3 million as a result of record registration of some JO,000 new vehicles.

Excise Duties

Mr. Haddon-Cave said that although the yield from excise duties was up overall by 3J1 million, it was a little di sappointing as regards hydrocarbon oils, table waters and locally manufactured liquor.

The revenue from rates at ,J6U million had increased by j28 million on 1970/71 due to higher assessed rateable values for new premises.

Post Office revenue had been disappointing, and at 3162 million represented p.n increase of less than .-2 million on actual revenue in 1970/71.

He .said interest earnings this year were expected to be a remarkable 3207 million, a J2 per cent increase on 1970/71.

This was due to the buoyancy of revenue collections during the year and the employment of a relatively higher proportion of Hong Kong’s balances than before in sterling investments which yield more than local deposits, he added.

/’’One aspect • • •. •

!

Wednesday, March 1, 1972

- 29 -

’’One aspect of our strong reserve position which is perhaps sometimes overlooked is the contribution which earnings on our investments make to our recurrent revenue: this year it is no less than 6 per cent or equal to the contribution made by stamp duties. Put another way, earnings on our investments this year financed no fewer than 3*+ of the 65 heads of expenditure.”

On capital revenue, he said this year total collections were likely to be down on the record 1970/71 figure of »>327 million by some 523 million.

’’However, the demand for Land in the urban areas, especially for domestic and commercial development, the availability for sale of more sites than originally expected, premia on regrants of 75 year non-renewable leases nnd revenue from the early renewal of renewal leases have meant that the revised estimate, at <263 million, is not far short of the record 1970/71 figure of 3272 million,” he added.

The Financial Secretary said that for the second year running actual expenditure at '$2,930 million would exceed the original estimate, which had been 32,862 million.

The amount of 32,930 million represented an increase of almost 20 per cent on actual expenditure in 1970/71.

He explained that the continuation of the sharp upward trend was due mainly to a recovery in public works and other capital expenditure which had fallen away from 3735 million in 1965/66 to 3372 million in 1969/70.

/Capital ......

Wednesday, March 1, 1972

- 30 -

Capital expenditure increased by nearly 50 per cent in 1970/71 to 3552 million and by another U} per cent in 1971/72 to $787 million, he said.

On capital expenditure in the seventies the Financial Secretary said: ”We faeo the prospect of having to finance an enormous programme of public works, and at contract prices which will probably be 50 per cent higher than those prevailing in 1970/71« whilst our recurrent services will continue to expand and become more costly”«

Salaries Oommission

He pointed out to Honourable Members that the revised estimates of expenditure did not reflect the full impact of the cost of implementing the recommendations of the Salaries Commission in respect of 1971/72e

About $76 million, excluding teachers salaries, would fall in the 1972/73 year of account for which he proposed to seek supplementary provision.

He also pointed out that the revised estimates for the three main Public Works Nonrecurrent heads was up by 329 million on the original estimate of $509 million which, in turn, exceeded actual expenditure in 1970/71 by 5126 million.

The year 1971/72 had been an unusually busy year for Finance Committee and this had naturally had the effect of boosting the rate expenditure.

/The total .

Wednesday, March 1, 1972

- 31 -

The total amount approved to February 9 for items which sought specific sums by way of supplementary provision was 436U million compared with 3301 million for the whole of 1970/71 and 3191 million for 1969/70.

He concluded by sounding a warning to heads of departments that, in 1972/73, the Finance Branch would have to look at applications for supplementary provisions rather more stringently for the ratio of supplemental to original estimates was getting a little out of hand.

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Wednesday, March 1, 1972

- 32 -

HONG KONG IN STRONG FINANCIAL POSITION

Enters 1972-73 With Total Reserve Of $3,923 Million

*****«*

The Financial Secretary, the Hon. C.P. Haddon-Cave, said today that Hong Kong enters 1972-73 in a "strong position" with a total reserve of 33,923 million.

Presenting his Budget in the Legislative Council, he said this year’s surplus should be of the order of 2700 million, bringing the balance in the General Revenue Account to about 32,900 million.

An estimated 3110 million for the appreciation of investments and a further 2913 million for the force surplus in the Exchange Fund added to that figure of 32,900 million should bring the Colony’s total reserve position at April 1, 1972 to 33,923 million, he explained.

The Financial Secretary pointed out that the surplus available for transfer had increased from $270 million when the accounts for 1970 were closed to an estimated 2913 million at the end of 1971•

He said this was "thanks to the strength of the gilt edged market and the careful management of our portfolio by the Crown Agents in London and the Accountant General acting within the broad guidelines laid down by the Exchange Fund Advisory Committee, one of the many advisory committees working quietly behind the scenes to provide the Administration with expert advice".

Hong Kong’s estimated reserve position at the end of the current flnancial year of 33,923 million represents an advance of ^1,448 million on the position a year ago when it was 32,475 million.

/This figure

Wednesday, March 1, 1972

- 33 -

This figure compares favourably with 31,726 million two years ago and 31,173 million at March 51» 19^8 after Hong Kong had borne the strain of the devaluation of sterling.

Hr. Haddon-Cave pointed out that in considering Hong Kong’s reserve position the main, and indeed the primary, determinant of incomes and hence of revenue yields, ”is the economy’s export performance over which we can exercise but a limited degree of control”.

’’This exposed external position means that we must maintain a strong reserve position in relation to annual expenditure,” he stressed®

’’Obviously, should our trade and hence the growth of our revenue ever slacken off seriously we must be in a position to maintain recurrent services and the level of capital expenditure either until the rate picks up again or, if this takes too long and our reserves are in danger of being rapidly depleted, until we can cut the rate of growth of expenditure methodically.”

The Financial Secretary pointed out that that would not be easy®

A cutback of plans for a steady expansion of recurrent services could only be achieved at a social and administrative cost, he said®

To slow down expenditure on capital works would probably be costly in the sense that nugatory expenditure would be involved, he added.

In addition, such a slowdown would certainly be difficult to organi se, not only because of the problem of selecting the projects to be slowed down, but also because of the sheer size of the Public Works Programme, he said.

The expenditure commitment as at February 9 in Category A projects in the Public Works Programme was a massive ^3,^24 million compared with only 31,736 million about the same time in 1971-

-------0 - - - -

W...........

Wednesday, March 1, 1972

- -

REVENUE TRENDS FROM 1961-62 TO 1972-73

Show Growing Dependence On Direct Taxation

*******

The revenue trends over the 12 years 1961-62 to 1972-73 show there has been a growing dependence on direct taxation - from 21 per cent to 28 per cent.

The Financial Secretary, the Hon. C.P. Haddon-Cave, stated this today when he presented his Budget proposals to the Legislative Council.

This, he added, had been coupled with the maintenance of the contribution by various fees and charges (around 20 per cent), despite the difficulty of keeping them in step with rising costs.

At the same time, the role of indirect taxes had declined, from 41 per cent to 34 per cent of the total revenue, he said.

’’These trends reflect the underlying philosophy of our fiscal policies and are highly appropriate to our circumstances, though I can foresee the day when certain indirect taxes assume a more important role for reasons which are partly non-fiscal.”

On the budgetted surplus of '170.3 million, Mr. Haddon-Cave said it did not take into account further commitments likely to be approved in respect of teachers salaries, medical subventions, increases in pensions and public assistance amounting to 5100 million, of which 542 million might be considered a fair charge against this year’s surplus.

”1 do not really expect the final accounts for 1972-73 to reveal a deficit although, theoretically, this could happen.”

/He said

Wednesday, March 1, 1972

- 35 -

He said that adding the $76 million yet to be paid out to the civil service (in respect of 1971-72) and this $100 million to the expenditure estimate of $3,657 million, there was an excess of expenditure over revenue of $106 million.

’’Although in the 11 years 1960-61 to 1971-72 we have underestimated revenue 10 times, I am fairly confident that this year we have not under-estimated it by more than a small margin, if at all.”

As regards expenditure, the Financial Secretary said it had been over-estimated eight times in the last 11 years.

’’However, the expenditure estimates are as realistic as we can make them, without cutting back arbitrarily, and this we have refrained from doing.”

Wednesday, March 1, 1972

- 36 -

COST OF CIVIL SERVICE ESTIMATED AT OVER 31,186 MILLION 90,656 Permanent Posts And 7,809 Supernumerary Posts **•*

The cost of the civil service for the next financial year starting on April 1, 1972, is estimated at over 51,186 million.

The Financial Secretary, the Hon. C.P. Haddon-Cave said today the approved establishment on April 1 this year, if the Draft Estimates were approved, would be 90,656 permanent posts and 7,809 supernumerary posts * a 4.3 per cent increase on 1971-72.

Presenting his Budget proposals to the Legislative Councilf he said civil service was one of the two main elements in the increase of 3384 million in recurrent expenditure for 1972-731 the other element being recurrent subventions.

He said civil service accounted for 3218 million of the 3384 million increase.

Of the 3218 million increase for civil service, he said, 340 million was accounted for by new posts, 341 million by incremental creep, and 3137 million by the new scales introduced as a result of the 1971 Salaries Commission’s recommendations.

”The personal emoluments bill for the Education Department will eventually increase by about 36 million in a full year if and when the new salary scales for teachers are agreed upon and implemented.”

-------0 --------

/57........

!

- March 1, 1972

- 37 -

STRONG RESERVE INSURANCE AGAINST REVENUE FALL-OFF

To Ensure Recurrent Services And Capital Expenditure Be Maintained

********

Government’s primary aim must be to maintain day to day services such as the Police Force, hospitals, and schools should the Colony’s trade and growth of revenue fall off.

The Financial Secretary, Mr. C.P. Haddon-Cave explained today that this is one of the main reasons for keeping a strong reserve position.

Mr. Haddon-Cave also emphasised that Hong Kong is free to invest its reserves either in Hong Kone* or in London and also has complete freedom to spend them should the need arise.

Earnings of 3207 million from these investments this year financed no fewer than J4 of the 65 heads of expenditure.

The Financial Secretary when he presented his Budget proposals in the Legislative Council today said that Hong Kong enters 1972/73 in ”a strong position” with a total reserve of 33,923 million.

He explained ^hat an estimated 3110 million for the appreciation of investments and a further 3913 million for the free surplus in the Exchange Fund added to the S2,9OO million in the General Revenue Account should bring the Colony’s total reserve position at April 1 this year to 33,923 million.

For this Hong Kong had to give thanks to the gilt edged market and careful management of the Colony* s portfolio by the Crown Agents in London and the Accountant General acting within the broad guidelines laid down by *be Exchange Fund Advisory Committee, one of the many advisory committees working quietly behind the scenes to Lhc Administration with expert advice,ht

pointed out.

/This


Wednesday, March 1, 1972

- 38 -5

This S3.923 million reserve would just about cover the outstanding expenditure commitment as at February 9 of 33.^24 million in Category A projects in the Public Works Programme.

Mr. Haddon-Cave went on to say that in considering Hong Kong’s reserve position the main, and indeed the primary, determinant of incomes and hence of revenue yields, ”is the economy’s export performance over which we can exercise but a limited degree of control”.

”This exposed external position means that we must maintain a Strong reserve position in relation to annual expenditure,” he added.

Pevcnue Fall

’^Obviously, should our trade and hence the growth of our revenue ever slacken off seriously we must be in a position to maintain recurrent services and the level of capital expenditure either until the rate picks up again or, if this takes too long and our reserves are in danger of being rapidly depleted, until we can cut the rate of growth of expenditure methodically,” he said.

To do this would not be easy, he added.

A cutback of plans for a steady expansion of recurrent services could only be achieved at a social and administrative cost; and to slow down expenditure on capital works would probably be costly in the sense that nugatory expenditure would be involved, he said.

In addition, this would be difficult to organise, not only because of the problem of selecting the projects to be slowed down, but also because of the sheer size of the Public Works Programme, he added.

-------O---------

/39

!

Wednesday, March 1, 1972

- 39 -

NEW SYSTEM FOR ASSESSING TAX

Among Financial Secretary’s Proposals For 1973“7^ »*t***4t

The Financial Secretary, Mr. C.P. Haddon-Cave, today proposed a system of assessing tax for the current year on the actual income or profits earned in that year.

He announced this and one other tax proposal for 1973/71* when he presented his Budget in the Legislative Council.

’•The target date for the changeover will be April 1, 1975/’ he said. He informed Members of the Council that a Bill to change the basis of assessment to a current year basis would be drafted and introduced into the Council within the next two or three months.

Mr. Haddon-Cave said the switch over from the present in exact and artificial basis of assessing tax for the current year with reference to income or profits earned in a preceding period to the proposed system concerned the last remaining major recommendation of the 1968 Report of the Inland Revenue Ordinance Review Committee.

This particular recommendation was not included in the Inland Revenue Ordinance (Amendment) Bill 1971 because of opposition from sovera') trade and accounting bodies as regards the application of this recommendation to profits tax, he added.

The income of the year ending March 3^» 1973 would be used provisionally to calculate the tax payable for the year 1973/7^-• This would only be a provisional payment and not the tax assessment for that year, he said.

/The Financial

Wednesday, March 1, 1972

40

The Financial Secretary explained that when the income for the year 1973/7** was returned a year later the tax assessment would be made and the provisional payment set off against the tax assessed.

’•An important feature of the transitional arrangements is that it is proposed to drop out of charge the incomes of most taxpayers for the year ending March J1, 1975* That is to say, if a taxpayer’s income for this year exceeds the income for the year ending March 31, 1972, by no more than 15 per cent the excess will be disregarded.”

He added that amounts in excess of this 15 per cent margin would be able to tax, but the Commissioner of Inland Revenue would arrange payment of the additional tax by instalments.

No. Ac tv. I

There would be no actual loss in terms of the total collection in 1973/7** under the new system compared with what the collection would have been in 1973/7** under the present system.

In 197**/75j the second year after transition and subsequent years, a new feature of the taxpayer’s annual notice of assessment would be the adjustment required when tax assessed for a year was more or less than the provisional tax paid, he said.

Except in the case of permanent cessation of employment a taxpayer would receive only one salaries tax assessment notice each year, he added•

”If a taxpayer can show that his income has been substantially reduced during the year, he will be able to apply for a stand over of tax.”

Under the present artificial preceding year basis of assessment the taxpayer could not claim relief for a reduction in income and had to pay tax out of his current year’s income computed on the preceding year’s income, Mr. Haddon-Cave explained.

’•This can cause difficulty where a bonus payment in the current year is considerably less than that for the preceding year,” he rat >1 *

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A1 .........

Wednesday, March 1, 1972

-41-

CUT IN SALARIES TAX RATES PROPOSED To Ease Burden On Middle Income Group *******

The reduction in the rates of salaries tax proposed by the Financial Secretary today will bring relief to people in the middle income group, particularly those with annual gross assessable incomes of between 340,000 and 380,000.

In announcing this tax concession in the Legislative Council, the Hon. C.P. Haddon-Cave said the tax burden on this group was out of proportion to the burden borne by the lower income groups who, quite rightly, get off very lightly indeed. It was also out of proportion to the higher income groups who enjoy the reducing impact of the low standard rate.

The Financial Secretary proposed to reduce the rates specified in the Second Schedule to the Inland Revenue Ordinance so that the first step would be 2.5 per cent or one-sixth of the standard rate and each of the eleven steps thereafter up to the maximum marginal rate of 30 per cent would likewise be a multiple of 2.5 per cent. Thus an even gradation of the tax structure would be achieved.

The effect of this recasting of the schedule, so far as personal allowances are concerned, will be to push up the point at which net chargeable income reaches the standard rate; in the case of a single man, from 35^,000 to 862,000; in the case of a married man, from 861,500 to 869,000; and in the case of a married man with two children, from 365,500 to 373,000.

Explaining this tax concession, Mr. Haddon-Cave said: "This proposal seeks to recognise that, with the inflation of incomes in recent years, the 30 per cent rate is catching people it was never intended to cateh.”

/A married

Wednesday, March 1, 1972

- 42 -

A married man with two children will be afforded relief over a range of net chargeable income extending from 35>000 to 370,000: at 35,000 the relief will be 312.50 or 9.1 per cent of his present tax liability; at 335,000 the relief will be 3425 or 10.8 per cent of present tax liability; at 355,000 the relief will be 31,125 or 12 per cent of present tax liability; and at 370,000 the relief will be 3450 or 3.4 per cent of present tax liability.

The cost of the proposed salaries tax concession to the revenue in 1972/73 will be 37.1 million. This will eventually increase to about 39*5 million when all assessments in a year are made on the basis of the revised schedule.

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/43..........

Wednesday, March 1, 1972

- -

MAXIMUM RATE OF ESTATE DUTY

Reduction From April 1 Proposed By Financial Secretary

**«•*»•

The Financial Secretary, the Hon. C.P. Haddon-Cave proposes a reduction in the maximum rate of estate duty from 20 per cent to 15 per cent.

This is one of the four tax concessions announced by Mr. Haddon-Cave when he presented his Budget for 1972-73 in the Legislative Council today.

The Flrwnrnal Secretary said he would be introducing a bill into the Legislative Council to reduce the maximum rate of estate duty in respect of deaths occurring on or after April 1, 1972.

At the same time, the present 14 steps ranging from 3200,000 to 32,000,000 will be amended to eleven steps ranging from 3200,000 to 31,000,000.

The new scale will provide worthwhile relief to all estates exceeding 3300,OOOt for example, the rate applicable to estates of 3500,000 will be reduced from ten per cent to seven per cent representing relief of 315fOOO in duty.

Mr. Haddon-Cave said it would also help to discourage Hong Kong residents from taking avoidance action by transferring assets overseas before death.

The Financial Secretary said the annual cost to revenue was very difficult to estimate, but was likely to be between 31.5 million and 33*5 million. For 1972-73 he was assuming it would be 33 million.

-------0---------

Wednesday, March 1, 197-

- 44 -

PROPOSAL TO ABOLISH DUTY ON METHYL ALCOHOL

Financial Secretary And His Budget

*********

The Financial Secretary, Mr. C.P. Haddon-Cavo, proposed today to abolish the duty on methyl alcohol as from 6 p.m. today.

He made the announcement when he presented his Budget in the Legislative Council.

Methyl alcohol was taxed 57*50 per gallon, and in addition 28 cents for every one per cent by which the strength by volume exceeds 25 por cent.

’’The need for such r ~c originally from an epidemic of cases

of adulteration of liquor with methyl alcohol, a dangerous poison, causing deaths and injuries,” Mr. Haddon-Cave said.

It had been considered necessary to remove the financial inducement to use methyl alcohol for adulteration of liquor by subjecting it to duty at the same rate as for methyl alcohol, he added.

”When introducing this resolution in 1957, Mr. Clarke emphasised that the purpose of the resolution was not to increase revenue but to protect the public.”

The view shared by the Secretary for Home Affairs, the Director of Medical and Health Services, the Director of Urban Services and the Director of Commerce and Industry, that the likelihood of methyl alcohol being used for the manufacture of liquor rather than for duplicating fluids, printers’ ink, and such products was no longer of real concern, he said.

The loss of revenue by abolishing duty on methyl alcohol would be about 5100,000 a year, he added.

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/45.........

I

Wednesday, March 1, 1972

- 45 -

UNDERGROUND RAILWAY IS NC PANACEA FOR

HONG KONG’S WORSENING TRAFFIC PROBLEM

Road Congestion Will Still Have To Be Tackled

*********

The Financial Secretary, Mr. Philip Haddon-Cave, made it clear in his Budget speech in the Legislative Council today that, even if the underground railway is built, it will certainly not be a panacea.

"The problem of congestion from the growing numbers of vehicles on the roads, particularly private cars, will still have to be tackledj" he pointed out.

It was also a fact that an underground railway could not be provided by simply waving a magic wand "for there are simply enormous problems to be overcome before a start can be made."

Mr. Haddon-Cave said even the first stage of the underground railway scheme - the so-called Initial System - would take at least six years to build and would involve formidable engineering and technical problems.

"During this period also the building works will add to, rather than relieve, congestion on the roads, while traffic volumes will still be increasing year by year.

"Finally, there are the problems involved in financing the project, that is to say, of raising very large sums of money to be paid off over periods of time which are long indeed by the normal standards of Hong Kong."

/Continuing,

I

Wednesday, March 1, 1972

- 46 -

Continuing, the Financial Secretary said: ”So there is no doubt that the underground railway is a complex and difficult project and the Government certainly cannot at this stage say whether it will or will not be built.

"What can be said, however, is that other aspects of Hong Kong’s growing traffic and transport problem will need to be tackled resolutely in the coming years and I must give due warning that unpopular measures will before long be necessary and will have to be adopted for the good • of the community as a whole.”

Restraints Policy On Private Motorists

Earlier, the Financial Secretary had said that Government could not be content with a restraints policy on private motorists alone to cope with the movement problems of the 1970s and 1980s.

”We are pushing ahead with a road reconstruction and development programme; and we are considering very carefully the proposal for an underground railway.”

Since the summer of 1971, a small working group of Government officers, most closely concerned, had been meeting regularly to examine every aspect of this proposal and to consider it in the context of an overall traffic and transport policy for Hong Kong.

’•The group has just completed the first draft of a memorandum for Executive Council and this is now being considered in the Colonial Secretariat.”

Because of this, Mr. Haddon-Cave explained, he could not say a great deal more about transport policy at the present time.

A7...........

0 - -

Wednesday, March 1, 1972

- ^7 -

FINANCIAL SECRETARY ANNOUNCES MEW RESTRAINTS POLICY OK PRIVATE MOTORISTS

Peak Hour Congestion Caused By Commuters: Mr. Haddon-Cave

Problem of Traffic Congestion Getting v*orse

Despite all efforts at road building and improvements, on which more than $400 million have been spent in the past eleven years, the problem of traffic congestion is getting worse, the Financial Secretary^ Mr. C.P. Haddon-Cave said today.

In his Budget speech in the Legislative Council, the Financial Secretary warned that unless something was done to contain the growth rate of vehicles, ”we shall face more and more severe traffic congestion in the urban areas as time goes on.”

He said this problem of congestion arose from the ’’increasing prosperity” of the community coupled with the fact that demand for transport always tended to increase more rapidly than incomes. Income per head, at current prices, was getting on for twice what it was in 1961.

The problem was not peculiar to Hong Long and was present in most large cities around the world. ’’But it is becoming especially acute in Hong Kong because of our high densities and our peculiar geographical c ircumstances.”

Mr. Haddon-Cave said that, even to begin to cope with the problem, Hong Kong must have a traffic and transport policy which recognised that there was only a given amount of road space available in relation to the increasing numbers of vehicles demanding to use it.

/’’This.....

Wednesday, March 1, 1972

- 48 -

"This increasing demand must somehow be restrained and those vehicles which use road space inefficiently must be made to accept a greater part of the cost of the congestion they cause in relation to efficient users, such as large double decker buses.

"In other words, whether we like it or not, we shall be forced into a policy of restraints, whether by fiscal means or other means, on the inefficient and less necessary use of road space in order to prevent the system clogging up."

The Financial Secretary told Council that one of the most difficult problems facing Hong Fong at the present time was what to do about the ever-increasing volume of traffic on the roads.

Increasing Strain

He quoted statistics to show the growth of vehicles using the road system.

In 1961, there were about 56,000 motor vehicles of all kinds in the Colony, of which 36,000 were private cars. "Now the numbers have tripled to over 166,000 and 107,000 respectively."

The number of goods vehicles had also roughly trebled during this period and public transport trips had doubled.

He said: "Despite all our efforts at road building and improvements -and we spent $422 million in the eleven years ending 1971/72 and we have $475 million worth of expenditure still to come on projects currently in hand - and despite also the adoption of better traffic management techniques, the evidence of the increasing strain being placed on our road system is there for all to see.

/"Furthermore •••••

i

' Wednesday, March 1, 1972

-49-

’’Furthermore, the number of new vehicles being registered each year is increasing at a rate of almost 15 per cent; and there is no sign as yet of any slackening in this rate of growth.

"So the problem is getting worse and unless something is done to contain it, we shall face more and more severe traffic congestion in the urban areas as time goes on.”

The Financial Secretary said that, despite Kong Kong’s general financial position at the moment, Government could not afford to delay the introduction of a restraints policy on the private motorist.

Peak Hour Congestion

’’And we believe we should begin now with a new parking policyt for a large part of the congestion at peak hours is caused by commuters who then take up parking spaces all day.”

Mr. Haddon-Cave said that charges for the 3,600 spaces in Government multi-storey car parks in the central urban areas had remained unaltered since 1966. A further 900 spaces were under construction.

”At present they do not even recover historical costs, let alone historical costs and recurrent expenses, let alone equate the demand for spaces with their supply.

”As a consequence, there is no control of priorities and there is additional congestion as drivers search for scarce parking spaces. Certainly, present charges do not achieve the established policy objective of a fifteen per cent vacancy at peak hours.

,lThese car parks are filled day after day with cars driven in

>y commuters in the morning and drive out after work in the evening.”

/During •••••


Wednesday, March 1, 1972

- 50 -

During the day, only a few short-term parkers could utilise these facilities because they were always full with commuter vehicles. The same applied to open air car parks which provided at present about 1,000 spaces.

The proposed increased car parking charges, the Financial Secretary said, should be so constructed as to load more of the increased charges on to the commuter whose demands added to the congestion on the roads at certain times of the day.

Amending Legislation

Mr. Haddon-Cave told Legislative Council that appropriate amendments to the Road Traffic (Parking and waiting) Regulations and the Road Traffic (Temporary Car larks) Regulations would be made shortly.

’’They should increase revenue by at least 43 million a year,” he said.

The Financial Secretary then went on to say that the increased parking charges was only a ’’modest beginning to what is going to be a continuing process.”

Given the physical limitations on the provision of parking facilities in the urban areas, it was reasonable to require the motorist to pay a higher price than at present for those parking spaces which could be provided.

”We certainly cannot guarantee, therefore, that these charges will not be raised again in future years; indeed, it is probable that they will be.”

/Mr. Haddon-Cave

Wednesday, March X* 1972

- 51 -

Mr. Haddon-Cave turned to the subject of on-street parking and remarked that charges for on-street parking would also need to be ।

raised. In the down town areas at present, there were 18,000 free on-street parking spaces and 5,000 free spaces for goods vehicles, compared with 7,000 metered spaces.

More Meters Ordered

More meters were on order and the aim would be progressively to extend meter charging to all parts of the urban areas where on-street parking could be permitted, to extend the hours of operation and to charge the appropriate rate in tach area according to demand.

•*In due course, this should ensure that parking spaces, whether on the street or in multi-storey or open air car parks, are available for those who wish to park and to pay for the privilege."

This policy, the Financial Secretary said, would also provide a tariff base which should encourage the building of car parks by private developers and land would be made available for this purpose.

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Wednesday, March 1, 1972

- 52 -PROPOSED REDUCTION IN RaTES FOR PREMISES

From 17 per cent to 15 per Cent As From April 1, 1975

The Financial Secretary, Mr. C.P. Haddon-Cave, today proposed for 1975/7^ a reduction from April 1, 1975 in the present rate charge for premises from 17 per cent to 15 per cent.

He said that with the general increase in rentals since the last valuation list had been prepared, most assessed values.were likely to increase, some very substantially, as a result of the revaluation to be carried out this year.

Assuming average increases in rateable values of say 25 to 50 per cent for domestic premises, he explained, the reduction in the rate would bring the increased rates that would otherwise have been payable down to around 32 per cent.

When presenting his Budget in the Legislative Council, he announced his intention to put to the Council for consideration later this year a resolution under Section 29 of the Rating Ordinance providing for a reduction in the present rate charge.

He said that such a resolution would, on present figures, reduced the forecast revenue from rates by U55 million to ^60 million.

He said lower rate charges for tenements in the urban areas where only an unfiltered mains water supply was available or where no mains water supply was available would be provided for in this resolution at 1U per cent and 13 per cent respectively.

In those parts of the New Territories, mainly Tsuen V7an and Kwai Chung, presently assessed to rates, the standard rate was 11 per cent, he added.

He explained that this lower rate charge was determined in 195^ when legislation had been introduced to bring those areas into rating and had been related, in a general way, to the local government type services then available.

/"Having regard

Wednesday, March 1, 1972

5

"Having regard to the rapid development in those areas since then, there is a very strong case for bringing the rate up to that applicable in the urban areas proper; but for the moment I propose that no sueh change should be made and, therefore, the rate will remain at 11 per cent," he said.

He added that eventually the rate should bo in line with that applicable in the urban areas.

"But this latter objective can best be achieved by a phased programme so as not to disrupt unduly landlord and tenant relationships."

Other Areas In N.T.

"I hope that a start can also be made to. bring other areas in the New Territories into rating with effect from April 1, 1974 benefiting the revenue by about 34 million to 35 million; the areas I have in mind are Tai Po, Yuen Long, Clearwater Bay Road and Tsing Yi," the financial Secretary said.

Whilst he believed Government could afford to make a concession in the rate charge applicable with effect from 1973/74 in view of the increased assessed values resulting from this year’s revaluation, this did not mean that the new rate could remain unchanged for yet another years.

He pointed out that as a result of the downward revaluations

of 1967/68 and 1969/70, the total of rateable values and thus the growth of revenue from rates had been rather less than previously.

"We wore able to accept this in the general financial situation then prevailing but should there be any downturn in rents which is reflected in the revaluation scheduled for 1975/76 resulting in a slower growth

of revenue from rates, we may have to consider raising the rate charge again."

• Wednesday, March 1, 1972

- 54 -

”1 hope not; but by that time the Urban Council will be taking a share of the general rate to help cover expenditure on the functions it is to assume and I cannot forecast the Council’s view of their needs. And I should add that the changes I am now considering will obviously have no effect on the arrangements for the Urban Council envisaged in the ’Thite Paper,” he said.

At present, rates charges on unoccupied premises were refunded; but there were two compelling arguments in favour of charging at least a •• proportion of the rate on unoccupied premises, Mr. Haddon-Cave said.

First, they enjoyed services (the Fire Services, for

example) to the same extent as those occupied; and secondly, the administrative cost of actually refunding rates paid and inspecting vacant premises was fairly substantial, he pointed out.

Dual Liability

"While rates are basically a charge on the occupation of premises, in Hong Kong there is a dual liability, and I cannot see why a landlord, even when premises are vacant, should not make some contribution to local services.”

”1 propose, therefore, that Section 32 of the Rating Ordinance should be amended to provide that with effect from April 1 1973, only •one half of the rate charged on unoccupied premises be refunded,” he said.

"This would save the revenue about £1.25 million even at the present time,” the Financial Secretary said.

He added that as a side effect, the charging of rates on unoccupied premises might deter landlords from keeping domestic premises vacant.

/Most assessed

Wednesday, March 1, 1972

- 55 -

Most assessed values were likely to increase even if there were a tendency for rents to decline this year; and the 1972 Property Review indicated there might well be some downturn in rents, particularly for flatted factories and also perhaps for large flats, he added.

He pointed out that there were a fair number of shop premises, vacant at the present time, but rents for shops generally showed little sign of falling*

-------o---------

FULL TEXT OF FINANCIAL SECRETARY’S SPEECH

Distributed Separately In Press Boxes

*******

Note to Editors: Copies of the full text of the Financial Secretary’s

Budget Speech ore distributed separately in the Press Boxes, G.I.S. this evening.

• - - - 0 -------

Release time: 10*00 p.m.

4000091 P.R.H. 7 *

HONG KONG GOVERNMENT

NFORMATION

SERVICES

DAILY INFORMATION

BULLETIN

Wednesday, March 8, 1972

OBJECT OF INCREASED CAR PARKING CHARGES To Ease Problem Of Road Congestion

’’The proposed increased car parking charges announced in the Budget should help ease Hong Kong’s worsening problem of road congestion,” a government spokesman said today. Parking charges are to be raised not so much because of a shortage of car parks but because of the shortage of road space.

”By constricting parking the companion activity of motoring is controlled,” the spokesman said, adding that practical experience in Western cities indicated that higher parking fees did discourage people from driving their cars to work, thereby helping to ease congestion in urban centres at peak hours.

With the higher charges proposed, people previously motoring to and from work would be induced either to share cars or to use public transport facilities. Moreover many would-be motorists would recognise that they could not afford to use their cars for the journey to and from work. At present a great deal of peak hour congestion is caused by commuters who park their cars all day along in city centres. They drive in during the morning, fill the car parks and drive out after work in the evening. While they are on the roads they use road space uneconomically by comparison with public transport, and while their vehicles are parked they prevent short-term parkers from finding

/parking ......

Wednesday, March 8, 1972

- 2 -

parking spaces. Present charges do not achieve the policy objective of always maintaining a few parking spaces empty* The present excess of demand for parking spaces over supply also means that motorists make an abortive search to find parking spaces which itself adds to the congestion on the roads.

Charges for spaces in Government multi-storey car parks have remained unchanged for six years, the spokesman said, and the alternative uses to which land given over to vehicle parking could be put would bring in a far higher rental than the return now received from car parking fees. ”So the motorists are getting a bargain, the undercharging for parking amounting to a subsidy to those motorists enjoying the facility,” he added.

Basic Objection

Another basic objection to the present situation was that somebody prepared to pay for a parking space in the down-town area was not permitted to do so. Raising the charges would discourage some would-be parkers and make the facilities available for those who were prepared to pay.

At present there are six Government multi-storey car parks providing 3,600 parking spaces, one is under construction and a number of others are planned. In addition, there are two government open air car parks with about 900 parking spaces.

As regards on-street parking, there are 18,000 free on-street parking spaces, 3»000 free spaces for goods vehicles, and 7»000 metered spaces.

The Financial Secretary, when he presented his Budget on March 1, said that more meters were on order, and the aim would be progressively to extend meter charging to all parts of the urban areas where on-street parking could be permitted, to extend the hours of operation, and to charge the appropriate rate in each area according to demand.

/’’In due.........

Wednesday, March 8, 1972

- 5 -

"In due course, this should ensure that parking spaces, whether on the street or in multi-storey or open air car parks, are available for those who wish to park and to pay for the privilege."

In addition, this policy would provide a tariff base which should encourage the building of car parks by private developers and land would be made available for this purpose.

At present, Government is pushing ahead with a road reconstruction and development programme. More than $2^0 million will be spent in the coming 1972/73 financial year on civil engineering and highways projects to improve the Colony’s roads and transport.

-------0----------

A....

Wednesday, March 8, 1972

- 4 -

SOCIAL WORK TRAINING IN HONG KONG Publication Of Dame Eileen Younghusband’s Report ***«*»«

Dame Eileen Younghusband believes there is a need for more trained social workers in Hong Kong, and to meet this need, there should be a two-year full-time qualifying course — under the care of an educational institution whose policies are decided primarily on educational grounds.

Dame Eileen says if the course cannot be sponsored by a university, then an independent educational institution, or board, might have to be established, with responsibility for setting standards — and students who complete the course should be recognised for appointmentt salary and promotion prospects as qualified social workers.

This proposal is one of several major recommendations put forward by Dame Eileen in a 50-page report following a second visit to Hong Kong between December 28, 1970, and January 27» 1971» and published today.

The visit was financed by a grant from the Social Work Training Fund, and her terms of reference were related to the provision of social work training in Hong Kong, with particular attention to in-service training at all levels.

Her report, entitled "Employment and Training for Social Work in Hong Kong," has already been tabled in the Legislative Council, but is being published now because a wider distribution is considered desirable to enable government departments, voluntary agencies, and the universities to comment in detail, addressing this to the Director of Social Welfare.

/Dame Eileen ••

Wednesday, March 8, 1972

- 5 -

Dame Eileen proposes that the Advisory Committee on Social Work Training be re-constituted to form a strong advisory committee, or council, composed of the various bodies active in social work training.

She urges that the 19&5 ’’Survey of the Need for Trained Social Workers in Hong Kong,” prepared by a sub-committee of the Advisory Committee on Social Work Training, be updated to give an accurate picture of the supply of social workers in relation to the demand.

She suggests that an overall planning group be established to review the total training needs and resources with a view to agreeing on an annual comprehensive programme for the Social Welfare Department’s Lady Trench Training Centre.

Overall Strategy

In her view, this planning group should prepare an overall strategy of in-service training for different levels of social workers.

Commenting on these recommendations, Mr. T.S. Heppell, Assistant Director (General), Social Welfare Department, says ’’considerable progress has already been made in actively considering, and making plans for implementing, Dame Eileen’s major proposals.”

In particular, her recommendation for a full-time two-year training course is under close examination, along with similar proposals for a College of Social Work Training by Dr. Irving Spergel, a visiting United Nations Adviser on Youth Work, who has since returned to the University of Chicago, and by a committee of the Hong Kong Council of Social Service under the chairmanship of the Reverend Eric Kvan.

/Mr. Heppell

Wednesday, March 8, 1972

- 6 -

Mr. Heppell says there have already been close consultations with other interested bodies, including in particular the Advisory Committee on Social Work Training.

He hopes it will be possible for the Department to put forward agreed proposals for a College for Social Work Training, "in one form or another within three months.”

But before this is done, there will be further discussions with Dame Eileen who is now in Hong Kong again as the guest of the University of Hong Kong, which is conferring on her an Honorary Doctorate of Social Sciences. Dame Eileen has been invited by the Social Welfare Department to remain for another week to advise in more detail on her ideas regarding the two-year course.

Reconstitute

On her other recommendations, Mr. Heppell says Dame Eileen*s proposal that the Advisory Committee on Social Work Training be reconstituted to form a strong advisory or consultative committee is being "actively pursued.’*

He notes that the updating of the 19&5 ’’Survey of the Need for Trained Social Workers" is in hand, and that a new survey has been carried out and is now being analysed.

But he believes that further development in in-service training must depend on the outcome of proposals for a College for Social Work Training, "and wide-reaching forward plans in this field, accordingly, cannot be made until the College issue is settled."

- - 0 -

/7

Wednesday, March 8, 1972

- 7 -

MEDICAL AND HEALTH STATISTICS For Week Ended February 12 .

Statistics released today by the Medical and Health Department for the week ended on February 12, 1972 are as follows

Notifications of infectious cases (previous week’s figures in brackets) — total 267 (255); amoebiasis — 1 (nil); bacillary dysentery — 6 (10); chickenpox — 57 (21); enteric fever (typhoid) — 9 (8); enteric fever (paratyphoid) — nil (1); leprosy — nil (5); measles — 55 (46); ophthalmia neonatorum — 2 (1); poliomyelitis — 1 (nil); and tuberculosis — 178 (145).

Births — total registered 1,415; 552 on Hong Kong Island, 848 in Kowloon, and 215 in the New Territories.

Deaths — 447 from all causes; 158 on the Island, 274 in Kowloon and 55 in the New Territories.

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/8........

Wednesday, March 8, 1972

- 8 -

VEGETABLE MARKETING CO-OPERATIVE INAUGURATES

Societies’ 20th Term Committee

**********

The Federation of Vegetable Marketing Co-operative Societies Ltd. will be holding an inauguration ceremony for its Twentieth Term Committee on March 10 at 7 p*m.

The ceremony, which will last for about one hour, will take place at the New May Flower Restaurant at No. 611, Nathan Road, Mongkok, Kowloon.

Mr. J.M. Riddell-Swan, Deputy Director of Agriculture and Fisheries Department, will officiate at the ceremony.

The Federation of Vegetable Marketing Co-operative Societies Ltd. is a division of the Vegetable Marketing Organisation, and its main function is to provide wholesale marketing facilities and other ancillary services to vegetable growers.

Note to Editors: You are cordially invited to send a reporter and/or photographer to cover the inauguration ceremony which will start at 7 p«m.

Wednesday, March 8, 1972

- 9 -

SWEDISH GENERALISED SYSTEM OF PREFERENCES Arrangement Proposed By Hong Kong Accepted *********

The Director of Commerce and Industry, Mr. E.I. Lee, today announced that the Swedish authorities had agreed to the arrangements which had been proposed by Hong Kong in respect of the certification and other administrative procedures involved in obtaining the benefits of the Swedish Generalised System of Preferences.

The Commerce and Industry Department has consequently now started to accept applications for Certificates of Origin (Form A), which are required for exports of products under claim to preferential duties on entry into Sweden.

The Generalised System of Preferences was introduced by Sweden with effect from January 1, 1972, and Hong Kong has been included as a beneficiary.

Certain agricultural and marine produce and most manufactured products from Hong Kong will be allowed entry into Sweden free of duty.

The origin criteria under the Swedish scheme are very similar to those of the E.E.C. and U.K. schemes.

Fuji details of the method of applying for the certificates of origin are included in a circular to the trade which the Department is issuing today.

-------0---------

/10..........

Wednesday, March 8, 1972

- 10 -

LARGE PLAYGROUND FOR SHAU KEI WAN RESIDENTS

To Provide Much Needed Recreational Facilities

it*********

Residents of densely-populated Shau Kei Wan will soon have a large playground to provide them with much needed sports and recreational facilities.

The new playground, which will be built on the concrete roof of the Shau Kei Wan Service Reservoir near Holy Cross Path Village, will have an approximate area of 1.8 ^cres when completed. It will be the largest recreation centre of the district.

The playground will have a turfed soccer pitch and a hard-surfaced basketball court together with a changing room with toilet and shower facilities.

Nine park benches will also be installed for the convenience of spectators, and additional railing will be built along the edge of the reservoir roof for safety purposes.

Construction is expected to begin in early May and should take about four months to complete.

0--------

Wednesday, March 8, 1972

WATER INTERRUPTION IN SHAM SHUI PO

Turned Off For Five Hours

***********

Water supply to a number of premises in Sham Shui Po will be turned off for five hours on March 10 from 1 a.m. to 6 a.m.

The temporary stoppage is to allow the Waterworks Office to carry out a leakage test in the area.

The area affected is bounded by Po On Road, Pratas Street, Tonkin Street, Un Chau Street, Castle Peak Road and Cheung Fat Street.

In addition, water supply to Nos. 2-18 and 3-15 Headland Road will be turned off for eight hours from 10.00 p.m. on March 10 to 6.00 a.m. on March 11.

The temporary water stoppage is to allow the Waterworks Office to connect an eight-inch fresh water main at Headland Road near house No. 1.

- - 0 -

Release Time; 6.^5 p.m

4000091 P.R.H. 7

HONG KONG GOVERNMENT

NFORMATION SERVICES

DAILY INFORMATION BULLETIN

Wednesday, March 15^ ^972

GOVERNMENT HAS FAILED TO ACHIEVED ITS INTENTIONS:

HON. SIR Y.K. KAN

Senior Unofficial Member Criticises ’’Conservatism and Pessimism” in Legislative Council’s Budget Debate ***««*«*

The Hong Kong Government has failed to achieve all that it should have achieved, the Senior Unofficial Member of the Legislative Council, the Hon. Sir Yuet-keung Kan, said today.

Speaking in the resumed debate on the Budget, Sir Yuet-keung said although Government’s intentions were ’’unexceptionable", unfortunately the way in which it had set about putting these into effect was open to criticism.

"There have been several reasons for this," Sir Yuet-keung said.

There had been a serious deficiency in forward planning and Government activity in general had been, to a large extent, "moulded and restricted by a financial policy” which, in his opinion, had erred on the side of "conservatism and pessimism,"

Sir Yuet-keung said, although he would hesitate to suggest that Government had not all along felt confidence in the ability of the people of Hong Kong to achieve what they had so notably succeeded in achieving in the past two decades, "this confidence has not made itself manifest in Government policy,"

/’’Indeed,

Wednesday March 151 **972

- 2 -

’’Indeed, the impression has been given of a Government holding back in many fields of endeavour.”

Sir Yuet-keung criticised the Government for its ’’inadequate efforts” in the field of public assistance.

He said Unofficial Members of the Legislative Coqncil had urged the Government, for many years, to give recipients cash assistance instead of only issuing dry rations, ’’but it was only last year that this began to be done.”

Proposals for increasing the rates of assistance, referred to by the Financial Secretary, had now been approved. ’’Even if these are taken into account, however, the effort in this field must be considered inadequate in the light of our financial position and the public need.”

Public Assistance

Sir Yuet-keung referred to the Financial Secretary’s remarks that the rates of public assistance should not be such as to have an adverse effect on employment and wages.

’’This, no doubt, is another way of saying that they are to be kept low so as to discourage anyone from giving up his work and relying on publie assistance to support himself.

’’While this may be a sound principle as far as able-bodied persons are concerned, can it be considered sound as regards those whom public assistance is in the first place designed to aid - the aged and the disabled?

’’Should, say, a man ef 80 be given inadequate assistance on the grounds that more would have an adverse effect on employment and wages?”

/The Senior

Wednesday, March 15, 1972

- 3 -

The Senior Unofficial Member called for a review of the policy on the resettlement of squatters.

Sir Yuet-keung said this policy, apart from disaster victims and a ■ few special cases on compassionate and other grounds, ’’continues to be related to the clearance of land required for development.

’’While this policy was perhaps justified at the time resettlement began some two decades ago, it is unsatisfactory that it should continue to be applied today when conditions have so radically altered.”

Rehouse Squatters

In its latest report, the Housing Board had recommended that Government should rehouse squatters in the worst squatter areas in addition to those cleared for development purposes, and that,, as a first step, 30»000 people should be rehoused in the next six years.

What was required, Sir Yuet-keung emphasized, ”is not fringe modifications but a thorough-going review of resettlement policy in the light of present conditions.”

Two major points of this resettlement policy needed to be examined.

The first was the question of the future of the oldest resettlement areas.

’’which have appropriately been described as our new slums.” The second concerned the very large number of squatters in the Nev/ Territories, now totalling 270.000 as compared with 410,000 in the urban areas, including Tsuen Wan and Kwai Chung.

Sir Yuet-keung said about 40 per cent of the total number of squatters were in the New Territories, ”yet the effort to resettle these persons has so far been marginal.” In the five-year period ending last year, less than six per cent of those resettled were New Territories squatters.

/Speaking •••••••

Wednesday, March 15» 1972

- 4 -

Speaking on the subject of education, Sir Yuet-keung said it had occupied, "quite rightly," an important place in Government thinking.

After years of urging by the Unofficial Members of Legislative Council, it was only at the beginning of this year that primary education became free in Government and aided schools.

Sir Yuet-keung said the position with regard to secondary education, however, "still leaves much to be desired."

Secondary And Technical Education

According to the Draft Estimates of Revenue and Expenditure, the revised policy for post-primary education provides for 18 per cent of children in the 12-16 age group to have five years of assisted secondary education leading to a Certificate of Education, while the Director of Education’s Annual Summary spoke of 18 to 20 per cent.

"In the light of the educational needs today, and our strong financial position," Sir Yuet-keung continued, "we cannot feel satisfied with this low target, particularly as neither the Estimates nor the Annual Summary of the Director of Education give any indication that Government plans to revise it upward in the next few years."

Government activity in the field of technical education, Sir Yuet-keung said, also left much to be desired.

He referred to the 1971 report of the Industrial Training Advisory Committee which expressed concern over Government’s "lack of decision" on the recommendation of the Functional Committee on Technical Institutes for the setting up of four more technical institutes.

/He said: •••••••.

Wednesday, March 15, 1972

- 5 -

He said: "Yet today Government, after long consideration, has only approved the establishment of two more technical institutes, and these are not expected to be opened till September 1975 and September 1976.

"As for the proposed Polytechnic, though a site has been earmarked and a Director has been appointed and indeed, has been in Hong Kong for some months, planning remains in an inchoate stage and there is no indication when it can be expected to get off the ground,"

Wednesday, March 15* 1972

-> 6 -

HON. SIR Y.K. KAN URGES ’’THOROUGH-GOING RE-APPRAISAL”

OF GOVERNMENT TRANSPORT POLICIES

Sound Overall Policy Needed For The Future

********

The Hon. Sir Yuet-keung Kan today called on the Government to make a ’’thorough-going re-appraisal of its piece-meal policies” on road transport and to work out a ’’sound overall policy for the future.”

Speaking in the resumed debate on the Budget in the Legislative Council, the Senior Unofficial Member said the transport problem ’’vitally affects every member of our population, as it does the people of any great city.”

Sir Yuet-keung said that the Government, instead of facing up to the road congestion problem in a satisfactory manner, was attempting to make the commuter travelling by car the ’’villain of the piece.”

Government was still avoiding ’’coming to grips” with the transport problem as a whole and working out a satisfactory overall policy.

Sir Yuet-keung said Government had placed itself in an ’’invidious position” on the question of private motorists and parking by having two widely divergent policies - one for the general public and one for civil servants.

Whatever Government decided to do about private motorists and parking, he added, it should not have one policy for members of the general public and an entirely different one for civil servants.

In his remarks on the transport problem, Sir Yuet-keung said; ’’And the growth of this problem in the light of our rapidly expanding vehicular use of our roads has been evident for a long time.

/”Yet today •••••••

Wednesday, March 15$ 1972

”Yet today we still find Government avoiding coming to grips with the problem as a whole and working out a satisfactory overall policy.

’’The various aspects of the problem, such as roads, town-planning, public transport, private transport, parking and the mass transit scheme continue to be dealt with piecemeal and with no sense of urgency.”

The Financial Secretary had told Legislative Council in his Budget Speech that even the first stage of the mass transit project would require at least six years to build.

Raises Question

Sir Yuet-keung said: ’’This surely raises in the minds of the public this question: how is it that, on a project which will require so much time to carry out, Government has dragged its feet for so many years - while all the time the estimated cost of construction has been rapidly mounting?”

Another sector in which the absence of sound policy was keenly felt, Sir Yuet-keung said, was that of road transport and parking.

”My colleagues, I expect, will deal with this, as with ether subjects, in much more detail that I propose to, but I would like to make these points.”

He said it was a serious reflection on Government thinking on this topic that, apart from a road development programme which suffered from a lack of integrated planning and was many years behind Hong Kong’s needs, ’’virtually the sum total of immediate Government action seems to be to impose what the Financial Secretary calls ’a policy of restraints on the private motorists.• ’’While these restraints may lead to a marginal improvement in the situation, our transport problems can no more be solved by squeezing the private motorist than a water shortage could be solved by increasing consumer charges for water.”

/Secondly,

Wednesday, March 15» 1972

- 8 -

Secondly, Sir Yuet-keung went on, ”it is disturbing to find that Government, instead of facing up to the road congestion problem in a satisfactory manner, is attempting to make the commuter travelling by car the villain of the piece.”

Travel to and from work was a necessity, not a pleasure, and in the light of Hong Kong’s inadequate public transport, and the fact that large areas of the Colony were not served by public transport at all, what alternative, Sir Yuet-keung asked, was there for many people than to commute by car?

Divergent Policies

Government had placed itself in an ’’invidious position” on the question of private motorists and parking by having two widely divergent policies - one for the general public and one for civil servants.

In dealing with the public, Sir Yuet-keung said, Government was ”all out” to cut down the use of private cars and to make motorists pay more for parking.

’’Government has repeatedly pointed out how valuable land used for parking is, and how much more car park charges should be than they are.

’’Public servants, however, live in a different world entirely. Government encourages ownership of cars by making loans to civil servants for the purchase of cars on a very generous basis - I think for 56 months of repayment terms at four per cent interest.

’’And it encourages even minor civil servants commuting by car by providing free parking on extremely valuable land in expensive central urban areas.”

Sir Yuet-keung said that some years ago, the then Financial Secretary did an exercise in which he calculated, on a commercial basis, the cost of parking spaces in multi-storey car parks, /"Perhaps .........................................................................

Wednesday, March 151 1972

- 9 -

"Perhaps the present Financial Secretary would let us know what is the present cost of the free parking spaces for civil servants in central urban areas, calculated on the sane basis.”

In the circumstances, Sir Yuet-keung said, he would urge the Government to make a "thorough-going re-appraisal of its piecemeal policies in this sector and to work out a sound overall policy for the future."

"I scarcely need add that, whatever Government decides to do about private motorists and parking, it should not have one policy for members of the general public and an entirely different one for civil servants."

Sir Yuet-keung concluded his speech by recalling Sir Murray MacLehose’s remarks on his arrival in November, 1971 to assume the Governorship.

"Sir, when on your arrival here you said: ’Our object is prosperity with social progress,’ I believe you voiced the hopes of all the people of Hong Kong.

"Economic growth and financial success alone are not good enough*• These must be matched by social advancement. This is the only sure way to ensure the confidence in the Government which is essential for the establishment of peace and order on a firm foundation.

"All that I have said today has been said with the aim of urging Government to achieve what I think can be achieved in this field."

/10..........

Wednesday, March 151 1972

- 10 -

LACK OF ENTHUSIASM FOR CAREER IN POLICE FORCE

The Hon. P.C. Woo Wants To Know Why

********

The Honourable P.C. Woo wants Government to find out why there is a lack of enthusiasm among young people for careers in the Police Force.

He wanted to know whether the present increase of police salary was sufficient to attract young recruits; whether the risk they had to run deterred them from joining the force or was it because their parents did not deem it an honourable occupation for their children.

Mr, Woo asked these questions in the Legislative Council today when the Unofficial Members spoke on the Budget.

’’These are matters we must look into in order to boost recruitment for the Police Force,” he stressed.

In his view, he said, one of the causes of the rise in crime committed particularly by youngsters was that Hong Kong had not enough policemen on the streets to combat them.

”1 know that the Police Force is below strength to the extent of over 1«700 in rank and file and as Chairman of the Establishment Subcommittee I know that the Commissioner of Police had proposed to Government to enlarge the establishment to the extent of about 2,000 men.”

He pointed out that roughly, if the estimate of the Police Commissioner were correct, the Police force was about 4*000 men below strength in order to combat crime.

/’’This is

Wednesday, March 15, 1972

- 11 -

’’This is a serious matter, as every man knows that it is not safe for him to go out in the street because when any assistance from the Police is sought it may not be forthcoming,” he said.

Mr. Woo also asked Government to consider seriously whether or not some of the duties now performed by the Traffic Branch of the Police Force would be done by civilians.

’’The Traffic Branch has taken the job of the Traffic Warden as we have in England, and I am sure that these duties can be performed by civilians rather than by uniformed personnel.”

Unoccupied Premises

On the proposal to charge rates on unoccupied premises as from April 1, 1973, Mr. Woo pointed out that the burden of payment of rates was on the occupier and if the premises were unoccupied the rates were therefore not payable.

”My Honourable Friend’s proposal is a departure from general principles but I am not arguing on general principles and if this Council accepts his proposal one very important exception should be made,” he said.

Developers of land at present were building multi-storey buildings with a view not to let them but to sell them and people also found it cheaper to buy their own residences than to rent them.

”If my Honourable Friend’s proposal is accepted it would deter development of land in Hong Kong, for once the Certificate of Occupation is granted by the Building Authority rates will begin to be payable even if the premises are vacant,” he said.

/It would .......

Wednesday, March 15, 1972

- 12 -

It would be a hardship on the developer to have to pay rates even before he had time to sell his vacant premises and therefore, he considered it only equitable to give the developer a period of time to enable him to sell his premises before rates became payable.

He suggested that a period of 6 to 12 months would be sufficient for that purpose and there should be a condition that once the premises were sold for the first time then rates whether the premises were vacant or not* were payable at half rate from the date of sale. He also suggested as an additional condition that the half rate principle should apply after 12 months had elapsed from the granting of the Occupation Permits by the Public Works Department even if the developer had not sold all his flats. In the case of an unscruplous landlord deliberately leaving his premises vacant in order to get higher rentals, Mr. Woo said he agreed that rates should be payable and no concession should be given.

Pay And Allowances

On the existing rate of pay and allowances for Auxiliary Units* Mr* Woo said it was only equitable that these should be revised in the light of raises in salaries received by civil servants since April 1, 19&7•

He pointed out that it should be accepted that a man or a woman who was called out for service with his or her Auxiliary Unit and had to take unpaid leave from his or her normal employment should not lose out on pay and travelling expenses.

/’’The rates

Wednesday, March 15, 1972

- U -

"The rates of pay and allowances for Auxiliaries should therefore be realistic and should compare favourably with the average salaries of the general public# In this respect the rates of pay and allowances of Government civil servants and Services personnel should be used for comparison purposes," he added.

On estate duty, Mr. Woo said he welcomed the proposal of the Financial Secretary to reduce it to the maximum rate of 15 per cent only.

’however, I think my Honourable Friend should not stop at 15 per cent but should consider reducing the rate progressively until the total abolition of estate duty in Hong Kong is achieved."

Avoidance Action

Recalling the words of the Financial Secretary when he presented his Budget on March 1, that the proposed reduction "will also help to discourage Hong Kong residents from taking avoidance action by transferring their assets overseas before death", Mr. Woo said "there is also the benefit that if no estate duty is payable in Hong Kong, persons from overseas will bring their assets into Hong Kong for investment or business".

On the growth of the public service, he said the Establishment Subcommittee was specially concerned about the economical and efficient use of staff when proposals for increases of posts were being considered.

He added it was very important that there should be adequate numbers of supervisory staff to ensure that junior staff could carry out their work as efficiently as possible and that even in the middle grade sufficient control should be exercised to avoid a wastage of manpower and to streamline the work and thus prevent undue delay in matters within and without the service and in particular in relation to the general public.

/"It seems •••••••*

Wednesday, March 1J» 1972

- 14 -

”It seems to me that there is a need for the appointment of a very senior officer to look into this particular point so as to ensure that all concerned in Government service are fully and gainfully employed at all times,” he said*

-------0--------

/15........

Wednesday, March 15, 1972

- 15 -

HON. SZETO WAI CRITICISES UNDER EXPENDITURE

Progress Of Social, Community Services Retarded

The Hon. Szeto Wai today voiced strong criticisms of Government’s budgetary policies when he spoke at the resumed Budget Debate in the Legislative Council.

He said he could not but ’’appal the continued deliberate under-estimating of revenue which has been allowed to inhibit expenditure and thereby retard the progress of our social and community services.”

"It is all the more difficult to justify, in the face of this year’s whacking surplus, the increase of water charges, the meagre provision of public assistance and the stubborn resistance towards improving our technical education," he added.

It was regrettable, Mr. Szeto Wai said, that on occasions of Budget Debate it was invariably the Financial Secretary’s prerogative to have the last say and Unofficial Members’ vindication inevitably came a year lateI

He recalled the many years during which the former Financial Secretary, Sir John Cowperthwaite, had produced large surpluses and described this as "an amazing feat.” He said either Sir John’s control over spending was excessive or his crystal ball for revenue estimation needed polishing or a more realistic interpretation by its master.

"In any event, such extraordinary inaccuracies have now become the rule rather than the exception and one can no longer dismiss them as just incorrect estimation,” Mr. Szeto Wai said.

/He said

Wednesday, March 15, 1972

- 16 -

He said his critical attitude last year of the four per cent unrealistic growth rate had now been vindicated. In fact the growth rate turned out to be 13 per cent. His criticism on this year’s low estimates in revenue from land sales and stamp duty had also turned out to be correct.

Turning to the estimated 7# per cent increase in revenue for 1972/73, Mr. Szeto Wai said it was an improvement on the four per cent for 1971/72 though in his opinion it was a little pessimistic.

He felt that the Financial Secretary’s had been more optimistic than his predecessor on revenue from sale of land — an expected drop of S39 million as against Sir John’s forecast decline of $109 million.

Land Sales

Recalling that the Director of Public Works had recently indicated that almost two million square feet of land would be ready for disposal next year, Mr. Szeto Wai said in all probability the Financial Secretary would be taken by surprise again by a windfall revenue from that source.

”If my honourable Friend was gloomy over land sales next year the same cannot be said to his outlook on taxi concession,” he said.

He felt that the $30 million which the Financial Secretary had anticipated from that source might prove to be a disappointment for apparently he had been forestallftd recently by the previous Commissioner for Transport who, acting on his own, had promised to operators, without any form of competitive tendering, 200 hire-car licences on the context of improving airport transport services.

The premia that would be offered for the new taxi licences as recommended by the Transport Advisory Committee early last year were bound to be affected by the large fleet of additional hire-cars on the roads, he added.

/The most

Wednesday, March 15, 1972

- 17 -

The most welcome feature of next year’s Estimates was its great leap forward in expenditure, he said*.

The 25 per cent increase compared well with the 17, 18, 4, 5 and 11 per cent over the previous four years from 1968/69*

”However, closer examination reveals that this great leap lies mainly in the considerably increased cost of our Civil Service which amounts to almost 20 per cent over that of this year while in the last five years the average increase was ten per cent.”

He said the 8227 million increase for next year represented J1 per cent of the total increase budgetted.

Civil Service Cost

’’The total estimated personal emoluments for 1972/73 is over one half of the total recurrent expenditure and over one third of our total expenditure and certainly points to the ‘rery high cost of our Civil Service.”

He added that the estimated increase of 8259 million in next year’s revenue would be almost absorbed by the increase in Civil Service cost.

’’Indeed, in the words of my honourable Friend the 1971 Salaries Commission has proved to be a costly exercise. What he said also reflects the opinion of his predecessor held in 1966 that the cost of our Civil Service was disproportionately high to our means,” he said.

On capital expenditure, Mr. Szeto Wai pointed out that the 8280 million increase in non-recurrent public works programme represented nearly 82 per cent of the total increase of 8543 million.

/The increase

Wednesday, March 15, 1972

- 18 -

The increase of $280 million, as explained in the Memorandum Note of the Draft Estimates was due to substantial higher contract prices and several major projects including the Airport Runway Extension, the raising of the Plover Cove Dam, the High Island Water Scheme and the Desalting Plant.

"The increased prices of these large engineering projects not only dig deeply into the public purse they also adversely affect private development,0 he said.

Clearly, Hong Kong was now suffering from high construction costs in the many capital projects needed to improve and strengthen community services.

Construction Prices

’’However, I would point out now as I did in the past that opportunity had not been taken in the years of low construction prices when the same volume of work could have been achieved at nearly half the cost.

’’The adverse consequences of neglected or inadequate economic, social and community services are legacy of a deliberate fiscal policy of creating and amassing huge yearly surpluses,” he said.

Mr. Szeto Wai said the Financial Secretary contradicted himself by saying, in one breath, that "artificial boosting of public expenditure in time of accumulated surpluses would be at the expense of the present generation of taxpayers, and in another, that the present generation of taxpayers has contributed very substantially ($2,000 million without counting the $600 million plus interest) in recent years to the financial resources for future spending on capital projects." "Perhaps it is realised that this remarkable contribution was only made possible by the majority of our people living a very frugal life, in many cases substandard," he said.

/"I therefore ••••••••

Wednesday, March 15, 1972

- 19 -

”1 therefore see every justification for timely boosting our public expenditure in a suitable but not extravagant scale in this our sixth year of continuing prosperity and surpluses,” he added.

He welcomed the proposed increases in Public Assistance and eaid that Hong Kong’s aged, the sick, the widowed and the needy ”must be given the opportunity of sharing, even a very small fraction, of our good profit.”

While the present proposals might make Hong Kong a pace-setter in the field of social services in Asia as claimed, Government’s tardiness in introducing the original scheme was an embarrassment to the Colony’s accumulated wealth.

He welcomed the present proposals of improvement and coupled his support with a plea for speedy implementation and a widened scope beyond the present target of 15,000 cases.

Hong Kong’s financial state could well afford the additional expenditure involved, he said.

-------0----------

/20.........

Wednesday, March 15, 1972

- 20 -

TIME FOR DECISION ON MASS TRANSIT SYSTEM

Indispensable In Combatting Road Congestion In Major Cities

********

The Honourable Szeto Wai said today the time had come for decisive action on the Mass Transit System.

He was speaking in the Legislative Council when debate on the Budget was resumed.

”We have now amassed a reserve in excess of the highest yearly expenditure so far. Sir, all Hong Kong awaits this decision,” he said.

Mr. Szeto Wai pointed out that major cities in the world were finding mass transit systems indispensable in combatting road congestion.

By population count, Hong Kong ranked 17th place among those cities but by density of development and physical restrictions, the Colony could certainly claim a primary place, he added.

The Financial Secretary was rightly worried by the scheme’s high cost, even the initial scheme, and had said that it could not be provided by simply waving a magic wand.

’’But we do have a magic wand, and one studded with jewels to the value of nearly $4,000 million.”

He added that to the uninitiated economic mind, the yearly interest from the Colony’s reserves would help to go a long way to financing the Initial Scheme which would in turn go a long way to solving traffic congestion.

’’There are other methods of financing such as loan finance, contractor finance, etc., which Sir John Cowperthwaite deprecated and which my Honourable Friend may find acceptable,” he said.

/On parking ......

Wednesday, March 159 1972

- 21 -

On parking charges, he said the Financial Secretary had stirred up ’’the hornet’s nest” by proposing to increase parking charges.

’’The objection is understandable because of the acute shortage of parking spaces and Government’s continued denial of the dire need of such facilities in the many busy commercial/residential areas,” he added.

’’Above all is the resentment to the preferential treatment meted out to civil servants and the expense of the people who are the employers.

’’The present policy on off-street parking and the emphasis on commercial viability of Government multi-storey carpark are responsible for our critical parking condition today.”

He said the Financial Secretary had not linked the increase of parking charges to commercial viability but rather to a more enlightened principle of road use and had warned that such increases represented the beginning of a continuing process aimed at relieving road congestion.

”1 cannot lend my support to the increase if it is designed chiefly as a measure to combat road congestion while continuing to ignore the needs of more off-street car-parks by Government,” he said.

/In the .........

Wednesday, March 15, 1972

- 22 -

In the context of Hong Kong’s economy and investment, Government car-park policy had been severely criticised as being ’’unrealistic” and the criticism was attested by the negligeable number of parking spaces having been provided by private enterprise, he added.

Mr. Szeto Wai said that among the restraining measures to combat road congestion, the increase of off-street parking facilities had to rank with equal importance with road improvement in any overall transport policy and should take priority above other fiscal devisest

/23

Wednesday, March 15, 1972

- 23 -

HIGHER TEMPO FOR SOCIAL, COMMUNITY AND ECONOMIC SERVICES Primary Duty To Present Generation *******

Social, community and economic services should be fulfilled at a higher tempo and without having to wait for the building up of the Colony’s reserves*

The Hon. Wilfred Wong said this in the Legislative Council today when debate on the Budget was resumed.

”Our primary duty is to the present generation. Therefore, in seeking to establish our aims in social progress, we must not be complacent because of our economic solvency and political stability.”

Mr, Wong advocated loan financing to pay for major public works such as the Mass Transit System and the Desalinization Programme.

”If adopted the reserves we have should hold until 1982-83,” he said. The expenditure of those two community services could both be regarded as self-liquidating as there would be revenue from public transport and rates for water, he pointed out.

”In embarking on loan financing on a scale larger than our total annual revenue, we will have the next generation share in the payment for the public debt incurred by the present generation. The justification is that the next generation will also be benefactors if not the owners of the projects,”

He said although loans might be obtained internationally, he believed that a public bond would be in the best interest of Hong Kong.

/A public..........

Wednesday, March 15i 1972

- 24 -

A public bond would put off increased taxation; would bear lower interest rates than commercial interest or even international loan interest; would create a bond market and absorb surplus capital; and would create a sense of belonging for the bond holders with a greater stake in the Government of Hong Kong, he said.

On raising the retirement age of civil servants from the existing 55 years to 60, Mr. Wong said the Chinese Civil Servants Association were unanimously in favour of bringing the retirement age in line with the rest of the world and thus stabilize their livelihood.

Valid Argument

It appeared that the only valid argument against extending the retirement age from 55 had been put up by the ’’next in line” in that heads of departments were now blocking their promotion.

The answer to this line of reasoning is that the same terms would apply to the next-in-line in that by waiting a few more years he would stay a few years longer as head.

’’Meanwhile, we are losing men at the zenith of their wisdom and experience by this antiquated system.

"The civil service is a career job. The terms of service must be such to make it so. For the sake of the few exceptions we should not leave civil servants high and dry at the age of 55/’ he said.

Mr. Wong added that he sincerely believed that both from the view point of Government and the individual servant the retirement age of 60 should be instituted forthwith.

/He also......••••

Wednesday, March 15, 1972

- 25 -

He also advocated that some of the rigid conditions in the existing Merchant Shipping Regulations which are based on the British Merchant Shipping Act 1894 should be modified.

He pointed out that one of the most important of the difficulties which Hong Kong owners were facing was the question of manning.

The regulations stipulate that five officers (the Master, Chief Engineer, 2nd Engineer, Chief Officer and 2nd Officer) of every ship must be of British nationality holding a Board of Trade Certificate.

"I have no doubt a fleet such as World-Wide will eventually get any British officers that it may require but until a tradition of service has been built up in this and other fleet owners are forced, if they register their vessels as British ships, to accept whatever British Officers they can get.”

Reserves Exceed Expenditure

Earlier in his speech, Mr. Wong said that for the first time Hong Kong’s total reserves would exceed one year’s expenditure.

Official reserves stood at $2,513 million on March 31, 1971» plus a Development Loan Fund of $8?4 million and an Exchange Fund based on 105 per cent coverage of banknotes in circulation.

He added that bank deposits ending 1971 totalled $18,785 million and bank advances were 311,8j6 million, and the Colony’s total reserves by April 1, 1972 should be about $3^923 million.

Mr. Wong described the 1972/73 Budget as ’’the biggest and the rosiest”.

”It is the biggest because revenue and expenditure are both at a record high. It is the rosiest because it not only reveals that our surplus is likely to be in the neighbourhood of $700 million by March J1, 1972 but also predicts that the rate of economic growth will rally after 18 months time,” he said.

/26........

- - 0 - -

Wednesday, Mareh 15$ 1972

- 26 -

HUMAN INVESTMENT IMPORTANT 114 INDUSTRY DEVELOPMENT

More Technicians And Craftsmen Training Facilities Needed

*«**»**«

Human investment is even more important than financial investment in the development of industry, Dr. the Honourable S.Y. Chung said today.

He was speaking in the Legislative Council when the debate on the Budget was resumed.

’’Therefore, we should and must make adequate investment in the development of our human resources through technical education,” he added.

Dr. Chung stressed that by technical education he meant technical education at all levels — technologists and professional engineers, technicians and technician engineers, craftsmen and machine operators.

He said the deficiency lay at the lower levels of technical institutes and vocational schools.

The Hong Kong Polytechnic would take care of 4,000 full-time and

20,000 part time students by 1975*

He pointed out that based on the scale factor alone, without the application of the sophistication factor, Hong Kong would need eight technical institutes by 1976.

’’The provision of only three such institutes is completely out of proportion,” he added.

He said he personally could not agree with the arguments of the Director of Education that the surveys conducted by the Industrial Training Advisory Committee had not been really accurate and rather out of date.

/He pointed

Wednesday, March 15, 1972

- 27 -

He pointed out that the surveys were made in 1967-69 and that any person who had some knowledge of Hong Kong industry would realise that any move to update the statistics would ultimately show a greater need for technical institutes due to the increase both in size and in sophistication of local industry in recent years.

Citing the Morrison Hill Technical Institute, Dr. Chung said "It is bursting along its seams."

"I am informed that factories are holding up their modern industrial training schemes because the Technical Institute could not provide places for technical education running parallel with industrial training."

Qualified Teachers

Even when the next two technical institutes would be ready by 1975 or 1976, there was no guarantee that there would be sufficient qualified teachers to mount the courses.

"The shortage of technical teachers was brought to Government’s attention more than five years ago and so far Government has no plan to overcome this important shortcoming. In fact, many people doubt whether Government has made any serious attempt to solve this cogent problem," he added.

Hong Kong depended heavily on its manufacturing industry which played a leading role in providing 42 per cent of the Colony’s total employment and contributed 4j per cent to the Gross Domestic Product.

"No other industrial country in the world depends so heavily on its manufacturing industry," he pointed out.

/Therefore,

Wednesday, March 15, 1972

- 28 -

Therefore, the adequate provision of technical education was of paramount importance in the continued success of Hong Kong’s economic development.

’’And unless we can maintain our economic progress, I foresee many social and possibly political problems ahead,” Dr. Chung stressed.

Putting a meagre amount of $15 million out of a total expenditure budget of $3,657 million into technical education in a predominantly industrial society ”is really a mystery” to the commercial and industrial world, he added.

Dr. Chung went on to say that he fully agreed with the Financial Secretary’s proposal to abolish duties on hydro-carbon oils.

Concession

He noted that the concession did not include furnace oil on which duty was as high as about 20 per cent of its retail price.

He pointed out that as the proposal now stood, a domestic household using kerosene and liquefied petroleum gas for cooking, heating and lighting would be exempt from duty.

Whereas, another household using town gas and electricity for the same purposes would have to pay a duty, which in some cases, could come to a very significant proportion of the cost of fuel, power and light.

He said town gas and electricity were widely used in Hong Kong industry for heat and power and the continual imposition of a duty on furnace oil did bear on industrial costs.

”1 therefore submit, Sir, that this tax concession proposal of the honourable Financial Secretary is discriminatory and should be amended to include also furnace oil.”

/Earlier.......

Wednesday, March 15, 1972

- 29 -

Earlier in his speech, Dr. Chung compared Hong Kong’s Gross Domestic Product growth rate with other countries in the region.

He said the average growth of Hong Kong’s GDP at current prices for the six year period 1966 to 1971 was 14 per cent per annum.

’’According to the latest economic survey of Asia and the Far East published only a few days ago by the United Nations Economic Commission for Asia and the Far East (ECAFE), the average annual growth rate of GNP/GDP during the three year period 1969-71 is about nine per cent for Japan and about 15 per cent for Singapore, as compared to Hong Kong’s 16 per cent,” he said.

--------0 --------

/30........

Wednesday, March 15, 1972

- JO -

QUARTERLY SURVEY BY LABOUR DEPARTMENT Of Employment And Vacancies In Industry «,«******

One of the Labour Department’s regular surveys of employment and vacancies in industry now in progress is in respect of the first quarter of this year.

Printed employment return cards were sent on March 10, to the management of all registered and recorded industrial establishments with a request that they accurately provide the information sought as at March 15< and return the card to the Labour Department on or before March 20. The cards are printed in Chinese and English.

From the information provided by these surveys, the numbers of persons employed and of vacancies in each of the main industries in Hong Kong are calculated. The resulting statistics provide information about trends in employment over the years, both in particular industries and in general.

It is hoped that all managements which have received these cards will ensure that they are fully and accurately completed, and promptly returned in the reply-paid envelopes provided.

The co-operation of managements in responding to the last survey resulted in complete coverage for all industrial establishments employing over 200 people while for those employing 50 to 200 people, the response rate was 98%. However, the overall response rate was 64%.

/This ........

9

Wednesday, March 15» 1972

- 31 -

This could be further improved if all establishments, particularly the smaller ones, would respond promptly to the survey.

The information provided on these cards is kept strictly confidential and is used only for the preparation of statistical information, and not for the enforcement of labour legislation.

The cards are destroyed under supervision when all the relevant information has been extracted and incorporated in statistical summaries and tables,

--------0 --------

EXPORTS OF WOOL AND MAN-MADE FIBRE

Knitted Sweaters To Canada

**********

The Hong Kong Government has, with effect from today (Wednesday) f lifted the quota control on exports of wool and man-made fibre sweaters to Canada,

Announcing this in a Notice to Exporters Series 4 No. 1/72 issued today, the Director of Commerce and Industry said the decision was made following consultations with the Canadian Government.

Trade Associations and companies on the Commerce and Industry Department’s mailing list for Notice to Exporters, Series 4 (Canada) will receive copies of the above Notice shortly but interested persons may also obtain copies from the Department’s Textiles Licensing Office, 2nd floor, Fire Brigade Building, Hong Kong.

-------0---------

/32........

Wednesday, March 15, 1972

- 32 -

HONG KONG DELEGATION TO ATTEND

28th Plenary Session Of ECAFE In Bangkok

*********

The Hong Kong delegation to the 28th Session of the Economic Commission for Asia and the Far East to be held in Bangkok from March 15 to 27 will be led by Dr. the Hon. S.Y. Chung, Unofficial Member of the Legislative Council.

The other members are Mr. E.I. Lee, Director of Commerce and Industry, Mr. D.J.C. Jones, Deputy Economic Secretary, Mr. D.S.W. Wong, Trade Officer, and Miss J.A. Willis, Assistant Secretary, Economic Branch of the Colonial Secretariat.

The meeting is expected to be attended by a large number of representatives from ECAFE member countries as well as observers from non-member countries.

The 28th Session coincides with the celebration of ECAFE’s 25th anniversary.

A commemorature volume describing the work and the role of ECAFE in the region will be tabled before the Commission. The publication consists of two parts: Part I outlines the impact of ECAFE’s multiple programmes of studies, research, seminars and advisory assistance on the development activities and policies of its member countries; Part II outlines the genesis, purpose and attainment of selected physical projects involving close co-operation among countries.

/Hong .......

Wednesday, March 15, 1972

- 33 -

Hong Kong has been an Associate Member of ECAFE since 19^7•

Note to Editors: Dr. Chung is not making any statement when he leaves for Bangkok tonight on flight BA8O7, E.T.D. 8.20 p.m. But he will meet press representatives in the V.I.P. Press Conference Doom at Kai Tak Airport on his return on March 22 by flight ML 568, E.T.A. 7.^0 p.m.

-------0---------

TEMPORARY CLOSURE OF A SECTION OF GARDEN ROAD

*»*«*»«***

The section of Garden Road adjacent to St. Joseph’s Church will be temporarily closed to traffic from 1 a.m. to 6 a.m. on Saturday, March 18 and Sunday, March 19 to allow work to take place on the flyover there•

During these periods, traffic from Garden Road and Kennedy Road wanting to use this section of Garden Road will be diverted to Upper Albert Road, returning to Garden Road via the slip road connecting Upper Albert Road and Garden Road.

Appropriate signs will be posted to guide motorists.

0--------

/ 34.......

Wednesday, March 15, 1972

- 34 -four bills passed in legco **********

Four bills received their third reading and were passed by the Legislative Council this afternoon.

They were the Limitation (Amendment) Bill 1972; the Corporal Punishment (Amendment) Bill 1972; the Matrimonial Causes (Amendment) Bill 1972 and the Detention Centres Bill 1972.

The Telecommunication (Amendment) Bill 1972 was read the second time while the Criminal Procedure (Amendment) Bill 1972 was adjourned at its second reading.

The debate on three other bills — the Appropriation Bill 1972; the Merchandise Marks (Amendment) Bill 1972 and the Offences against the Person (Amendment) Bill 1972 — were resumed.

Four sessional papers were tabled in the Council. They were the Annual Report by the General Manager, Railway for the year 1970-71; the Annual Report by the Director of Immigration for the year 1970-71; the Accounts and Statements of the Grantham Scholarships Fund for the year ended 51st August 1971 and the Annual Report by the Secretary for Home Affairs for the year 1970-71.

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/35.........

Wednesday, March 15, 1972

- 35 -

DEPUTIES MAKE JOINT VISIT

********

In a novel joint venture the Deputy heads of two government departments together toured the San Po Kong premises of Sonca Industries today (Wednesday)•

Mr, Ian Price, Deputy Commissioner of Labour, and Mr. H. Williams, Deputy Director of Commerce and Industry, spent the afternoon touring the factory which, apart from being a leading manufacturer of electrical appliances and components, also has a well-equipped apprentice training centre.

Said Mr. Williams, who was with the Labour Department before moving to Commerce and Industry, ”This type of excercise helps to maintain close co-operation between our two departments although our respective apporaches are from different angles.”

For Mr. Price, it was an opportunity to see first hand a physical aspect of his department’s work.

He said: ’’Inevitably I get deskbound for much of the time in my job and I think it important to get some insight into the general roles of management and worker.” ------------------------------------0---------

RECORDINGS AVAILABLE

**********

Note to Editors: The proceedings in today’s Legislative Council meeting have been recorded. You are welcome to consult the tapes at the Press Room, Government Information Services.

-------0---------

/36........

Wednesday, March 15, 1972

NEW LAWS NEEDED TO BETTER COMBAT CRIME Emphasis On Individual Rights Detrimental To Public Well-Being ***««»*

The Hon. Mrs. Ellen Li today urged the introduction of new laws to bring into effect better control of law and order and control of other less serious anti-social and illegal acts.

Speaking at the resumed Budget debate in the Legislative Council, she said: "We tend to place more emphasis on individual freedom and rights to the detriment of public well-being and social progress."

Violent crimes committed by young people, very often in broad daylight, were witnessed by crowds of people who did not even give a voice, much less lend a hand to help, she said.

,rWe blame the police for not being able to catch the robbers and yet at the same time we resent a search for deadly weapons, and we crucify him for wounding or killing a thug when the policeman tries to do his duty,” she pointed out.

There were also people who advised one another to carry 8100 in their pockets in readiness to appease prospective robbers in order to avoid possible trouble, she added.

"This permissive attitude on the part of the public must change to one of cooperation with the police if lav/ enforcement is to be effective.

/"I understand

Wednesday, 'March 15, 1972

- 37 -

"I understand that our police force is still under strength and the recent increases in salary for the rank and file may help to speed up recruitment,” she said.

Citing examples of permissiveness, Mrs. Li said illegal hawkers were allowed to clutter up the streets and front doors; litterbugs polluted the entire Colony, and squatters were everywhere•

’’The public would like to see heavier penalties imposed by the courts on lawbreakers, the Urban Council would welcome heavier fines for litterbugs, and other departments would like to have power to cancel licences of businesses for failure to conform to the conditions stipulated in their permits.

Permissive Attitude

”Unless we change this permissive attitude on the part of Government, the judiciary and the public, we are encouraging disrespect for law and order,” Mrs. Li said.

On youth and education, Mrs. Li said that since at least half the population were young people below the age of 21, emphasis of service had to be placed on them and geared to their need.

”Our education system must be streamlined to fit them for work when they leave school without any time gap in between. It should be our ultimate aim to carry a young man up to the age of 17 or 18,” she stressed.

She pointed out that Government was vigorously pursuing its policy of providing assisted places for at least half the children within the- age group of 12-14.

/it was .••••

Wednesday, March 15, 1972

- 38 -

It was gratifying to note that some 17,000 additional places in Form I to III plus a further 14,000 subsidized places in existing private schools would bo available during 1972/73•

”At this rate, we are pretty sure that the target will be reached in time and with luck perhaps a little ahead of time,” she said.

Hence, the ultimate aim for a subsidized universal secondary education was no longer a far-fetched ideal but a possible reality in the not too far distant future, she added.

Land Grant

”1 would like to repeat my plea to Government to undertake to accelerate its efforts to expedite the process of land grant and capital subsidy to voluntary agencies to build and operate more secondary schools and vocational centres during the next few years,” she said.

Many people had criticised the education system as too academic and too examination-oriented.

A system of competitive selection, especially at the university entrance level, had to remain a necessary evil as long as the three tiers of education remained a sharp pyramid.

’’However, the aim of secondary education should not be so much to produce candidates for the universities, but more important, to produce useful and responsible citizens as well as a trained work force for commerce and industry and the professions,” she said.

’’The period 12 to 18 is the most important and formative years in a child’s life and we depend heavily on this particular tier of the education system for the development of character, good citizenship and high moral standards in our children, through strict discipline and extra-curricula activities.”

/Mrs• Li .....

Wednesday, March 15, 1972

- 59 -

Mrs. Li went on to urge Government to provide more recreational and sports facilities for school children and other young people as a whole.

nWe need more football and basket-ball pitches, swimming pools, picnic grounds, camp sites, community centres and youth centres for concerts, plays, exhibitions, dances and other forms of healthy entertainment,” she said.

On the Financial Secretary’s proposals to increase car parking charges and to charge rates on empty flats, she said: ’’The increase in carpark charges and the levy of one half the amount of rates for empty flats can be described as irritating measures similar to cutting off one’s toes to fit the shoes.”

More multi-storey carparks were needed to keep cars off the roads, she said.

Serious Repercussions

The charging of half rates for empty flats to combat high rents might boomerang into even more serious repercussions, she added.

The high cost of construction would continue and if the demand was there, the rates would still be added onto the rents, she said.

”In a place like Hong Kong, so sensitive to slight changes and so liable to sharp reactions, the law of supply and demand must be left to find its own level. Emergency rent control in time of need is sufficient and effective enough for the purpose.”

Mrs. Li suggested a system of deficit subsidy for social welfare services in very much the same way as the Medical and Education subsidies, to maintain a uniformly high standard of such services.

/”Nowhere

Wednesday, March 15, 1972

40 -

1 ‘Nowhere else in the world can we find such a number of voluntary agencies providing a vast variety of services to the community in supplement to Government’s efforts,” she said.

She was disappointed that Government had not seen fit to adopt a more realistic subvention policy for nurseries, she said.

“Since more than 300,000 women work in industries and 200,000 in other fields, the need for more nurseries or day-care centres has become more and more acute,’1 she pointed out.

Quality Of Service

On the Public Service, Mrs. Li said that there was one aspect in the quality of service that every taxpayer would like Government to pay special attention to, that is, the attitude and manners of some of the civil servants need some improvement.

This could be done through training courses on techniques in public relations, especially for those who represented Government in direct contact with the public, she said.

“One rude word, an arrogant gesture or an attitude of indifference may destroy in one moment an image our Government spends years and millions of dollars to build up,” she said.

On the high cost of dying, Mrs. Li said that for many years the Urban Council had publicized a practical solution to this problem by offering cheap cremation services and a niche for the ashes at the columbariumr all for 4300.

It had proved so popular that the niches of the columbaria at Cape Collinson Crematorium and Wo Hop Shek Cemetery had all been taken up two years ago.

She said she was glad to note that funds had been provided for an extension to these columbaria in the 1972/73 estimates.


Wednesday, March 15, 1972

- 41 -

$4,500 RAISED BY INMATES FOR CHEST

*«*•**«*«

A cheque of $4,500, raised by 20 inmates of the Tai Lam Treatment Centre through taking part in the ’Walk for a Million0 on March 5, 1972, will be presented to the Community Chest tomorrow (Thursday),

The presentation ceremony will take place at 12 noon in the Assembly Hall of the Tai Lam Treatment Centre.

One of the inmates, who took part in the walk, will present the cheque to Mr. Yu Look-yau, who will receive it on behalf of the Community Chest.

The 20 inmates who took part in the walk had been sponsored by a prominent resident at the rate of $150 per person, subject to completion of the course. Ten other staff members, including the Superintendent of the Centre, also took part in the walk.

Note to Editors: You are cordially invited to send a reporter and/or photographer to cover the presentation ceremony. Transportation will be provided by the Prisons Department. A mini bus will leave the open air car park behind the Tsim Sha Tsui Post Office at 11 a.m.

0--------

/42...........

Wednesday, March 15, 1972

- 42 -

TWO GRANTS FROM LOTTERIES FUND APPROVED

*********

A resolution seeking approval for the allocation of two grants totalling $1,135,400 from the Lotteries Fund were approved by Legislative Council today for community and welfare use.

Both grants were recommended by the Social Welfare Advisory Committee.

The Financial Secretary, Mr. C.P. Haddon-Cave, in moving the resolution, said one of the grants involving $135*400 was to be made to help the Hong Kong Society for the Blind to meet the cost of renovating and fitting out proper office and storage space for its To Kwa Wan Workshop and Training Centre.

The second grant, amounting to 31 million, was to be made to the Community Relief Trust Fund to assist towards its expenditure on disaster relief.

-------0---------

A3....

Wednesday, March 15, 1972

1

- -

OFFENCES AGAINST THE PERSON (AMENDMENT) BILL

To Be Given Two Years' Trial

«**««***

The Attorney General, the Hon. D.T.E. Roberts, today accepted.a suggestion by the Hon. Sir Yuet-keung Kan that the Offences Against the Person (Amendment) Bill 1972 should be given a life of two years and that it should cease to have effect unless the Council by resolution extended the period of its operation.

Mr. Roberts was speaking in the resumed debate on the Bill at this afternoon’s meeting of the Legislative Council.

He said much can be done to prevent the abuse of the bill by a careful control of the hospitals and clinics in which therapeutic abortions will be permitted.

”If this Bill is enacted, a close watch will be kept by the Director of Medical and Health Services on its operation,” he said.

Mr. Roberts hoped that it would not be thought that the Bill in any way sought to encourage easy abortion.

’’Any deliberate termination of a pregnancy which does not fall within the conditions prescribed by the Bill will remain a criminal offence,” he said.

”Even in circumstances in which the Bill permits an abortion, it will remain for the individual to decide on whether or not she will allow it,” the Attorney General added.

Earlier, the Hon. Sir Yuet-keung Kan had suggested that the bill, if passed into law, should be allowed to ’’run initially for a trial period of say, two years.”

This, he said, was to calm genuine fear among certain sections of the community that the bill would lend itself to ’’rampant abuse.”

/He.......

Wednesday, March 15, 1972

M -

He also suggested that during the trial period, the Director of Medical and Health Services should keep a close watch on the situation.

’’The question whether or not the law should be extended or made permanent, with or without modifications, can be determined in the light of the experience gained,” Sir Yuet-keung added.

Two other Unofficial Members, the Hon. Ellen Li and the Hon.

Wilson T.S. Wang, also spoke on the bill.

Mrs. Li said she was sure that she was not alone in feeling that the social aspect, the family circumstances and the welfare of the existing children should be taken into account.

’’Furthermore,” she said, ’’the woman herself should be given a chance to decide on her own destiny, not the husband or the mother-in-law, and certainly not a third unknown party in cases of rape.”

”A determined mother who tried very hard but still failed to prevent an unwanted pregnancy should also be given a choice,” she added.

Mr. Wang spoke of his experiences during his years with the Tung Wah Hospital and said that nothing had grieved him more than to see sad faces in the maternity ward and to deal with cases of abandoned babies.

He urged the Council ”to cast a sympathetic eye on such victims and introduce further amendments to this bill in order to bring the social aspects of the problem into consideration.”

-------0---------

Release time: 10.00 p.m.

4000001 P.R.H. 7

HONG KONG GOVERNMENT

NFORMATION

SERVICES

DAILY INFORMATION BULLETIN

Thursday, March 16, 1972

SHORTAGE OF LOCAL RECRUITS FOR CIVIL SERVICE

The Hon. Wilson 'Vang ;ants To Know

The Hon. Wilson Wang wanted to know whether there was really a shortage of local people wanting to join the Civil Service.

He wanted to find out whether this shortage was entirely due to the brain drain or was it due to keen competition in the private sector or was it some other reason.

Mr. Wang asked these questions at the resumed Budget Debate in the Legislative Council today.

”1 am inclined to feel that there is room for improvement in the present method of recruitment and in the training of the serving officers," he said.

He suggested that Government should do more than advertise for applicants.

"The potential applicants should be approached and fully briefed on the nature of their work and on promotion prospects and requirements, apart from salary scales,” he said.

He pointed out that able young graduates generally received a good number of offers and for that reason they should be booked well in advance of their graduation especially when processing of applications took as long as months so that even second choices were unlikely to be available after completion.

/Enterprising.

Thursday, March 16, 1972

- 2 -

Enterprising young men want a chance to achieve something and they want their achievement to be recognised in terms of promotion to more responsible positions, he said.

Although a sense of security was desirable, young men were not unconscious of the danger of being turned into useless mules on a tread-mill, he added.

Again, Government should not rely entirely on recruitment from abroad to make up deficiencies in the administration. In any case, overseas personnel were getting increasingly scarce and expensive, he added.

Far-sighted

"What is more important is that our policy should be far-sighted and that we should take active steps to discover men of potential ability from among our serving officers and implement a comprehensive scheme of training them so that we may have an adequate supply of capable and highly qualified local men to fill posts of responsibility” he said.

Hence, he said, it was essential to prepare a forecast of establishment a good number of years ahead.

A search for the right men should begin well in advance, so that all interested persons, already or not yet in the Civil Service, might be given sufficient time to prepare themselves for the posts or be invited to take up courses of training if required, he added.

”1 propose, also, that Government, like a good employer, should be more generous in awarding them leave if not as much as those enjoyed by expatriates at the end of each tour of service.

/"I suggest .....

Thursday, March 16, 1972

- 3 -

”1 suggest that it is a false economy to confine our local officers to daily routine and keep them like frogs in wells,” he said.

On young people, particularly those below the age of 15, Mr. Wang said: ”We must not and could not afford to let them go astray for a few years and be content to say that school places will soon be available.”

He said this should be more obvious at this moment when the Colony was concerned with the most undesirable upsurge of juvenile crime.

Difficulties

Admittedly there were physical difficulties involved in expediting the construction of schools and the training of teachers but he was not sure all had been done to reach at a much earlier date the present target of providing 50 per cent of three years aided post-primary education by 1976 and 100 per cent by 1980.

”1 therefore propose that urgent action should be taken to explore all other ways and means of expediting this provision,” he stressed.

While waiting for the attainment of that target, Mr. Wang proposed that Government should accept the responsibility of ensuring that no child between the age of 6 and 15 was deprived of education solely because of financial difficulties.

He said public funds should be made available so that all parents-in-need could apply for financial assistance to pay for a part or the whole of the school fees in any school registered with the Education Department, provided the Director of Education was satisfied there were no aided places available for them.

/Mr. Wang .....

Thursday, March 16, 1972

- 4 -

Mr. Wang also urged that a Council for Physical Recreation be formed immediately.

He envisaged such a Council to be not just an addition to the organisation already in existence, but rather an essential means of enlarging the scope of activities in a field which had surely to be regarded as tremendously important for Hong Kong’s young people.

As regards public assistance, Mr. Wang urged that the welfare of the aged should take first priority. Aged people in need should be granted better public assistance than the others, and not merely on a subsistence level.

- - 0 - -

/ 5.....

Thursday, March 16, 1972

- 5 -

TOURISTS MAKE VALUABLE CONTRIBUTION TO COLONY’S ECONOMY Estimated To Spend $1,800 Million In 1972 *******

The Hon. H.J.C. Browne said today tourists would spend an estimated 31,800 million this year — a sizeable and very valuable contribution to Hong Kong’s economy.

Because of congestion, rising costs and other factors Hong Kong was not as attractive as it once was and was now facing competition from other places in Asia, he added.

Mr. Browne was speaking at the resumed Budget Debate in the Legislative Council.

”V/e cannot take the expansion of our tourist trade for granted and I feel Government should take positive steps to make things more attractive for tourists in Hong Kong.”

He suggested that "more beef” be put behind the Urban Council’s campaign to clean up the city, and if necessary introduce new legislation to strengthen the U.S.D.’s hand.

He felt a more positive approach was needed to increase the scope of things that tourists could do.

This could be achieved by setting aside areas for resort development and then inviting bids from international and local developers, he said.

”1 would urge a new policy towards the development of resorts in the New Territories and Lantao.”

He said higher priority should be given to improving the road system on Lantao so a vehicular ferry service could be introduced*

/Double

Thursday, March 16, 1972

- 6 -

Double tracking the short road to Lok Ma Chau was also needed urgently as it was often overcrowded at present, he said.

"These facilities would, of course, be used by our own people as well as by tourists."

He also urged Government to give higher priority to Phase 2 of the Stage IV development of the Hong Kong Airport Terminal Building and to press on with the detailed planning of Phase 3*

"The forecast shows that we ere going to run into serious congestion again in the terminal building from 1973 onwards," he said.

New Policy

Mr. Browne said he would also like to see a new policy towards shops at the airport.

"I am alarmed to see that against the original estimate of revenue of #12 million from airport concessions in 1971/72, the figure has doubled to #25 million in 1972/73."

He thought it wrong to put airport shop spaces out to tender to the highest bidder without considering other factors.

"This results in charging rents that are higher than almost anywhere else in the Colony," he said.

He pointed out that almost every tourist entered and left Hong Kong through the airport and it gave a very unfavourable impression if they were asked to pay an unrealistic rate when money was changed, and high prices for liquor and other goods they might purchase at Kai Tak.

"If we don’t do something about overcharging and congestion in the airport terminal we are bound to run into increasingly adverse publicity," he said.

/On the .....

Thursday, March 16, 1972

- 7 -

On the Civil Service, Mr. Browne said he was glad to hear that the Organisational Surveys Unit had now been moved into the Finance Branch.

HI hope it will be strengthened and expanded and that it will be effectively used as a tool; firstly, to streamline existing Government systems and procedures, and second to spearhead an economy drive on Government spending.”

In suggesting an economy drive, he wanted it made clear that Hong Kong was well served by the Public Service, he said.

However, there was always room for savings in any large organisation and Government could be no exception, he added.

Determined Drive

With the Public Service at almost 100,000 strong and costing nearly 50 per cent of recurrent revenue, a new and determined drive was needed to reduce waste and increase productivity, he said.

”1 hope this suggestion will be seriously considered, even if it means writing new terms of reference for the O.S.U. perhaps tripling its size, employing consultants whenever necessary, and perhaps putting a Senior Administrative Officer in charge of the whole effort,” he said.

Supporting the Financial Secretary’s budgetting for a modest surplus, Mr. Browne said commitments to considerable and increasing recurrent expenditure in education, medical, social welfare and other items might well lead the Colony into deficits later in the 1970s.

”1 am glad that a start has been made in borrowing from the Asian Development Bank for capital projects,” he said.

/But there .••

Thursday, March 16, 1972

- 8 -

But there was still a tremendous amount that still had to be done in housing, resettlement, secondary education, and in the development of more facilities for technical education, he said.

Mr. Browne said that Hong Kong must develop more technologically orientated industries if our export trade was to survive. Government should encourage overseas investment by putting up more land for sale and not trying to secure excessively high premia by restricting the amount of land made available•

Thursday, March 16, 1972

- 9 -

TIME TO DIVERSIFY STERLING RESERVES: THE HON Q.W. LEE

U.K. Guarantee Changing In Character

♦*♦*♦♦*

The Hon. Q.W. Lee said today the time "is coming nearer and nearer" for Hong Kong to diversify its reserves in currencies other than Sterling.

He was one of the eight Unofficial Members who spoke when the debate on the Budget was resumed in the Legislative Council.

Mr. Lee was commenting on Hong Kong’s reserves position and the changing character of the United Kingdom Sterling guarantee•

There had not been much dispute that Hong Kong should have reserves, he said.

"It is only their size and where they should be invested that have always been controversial,” he added.

The Colony’s social, economic and political progress dictated that more and more should be spent on new developmental and social projects such as the desalting plant, High Island water scheme, public assistance, technical education and loans for small industries.

In addition* one day a decision might be reached to go ahead with the Mass Transit System* Social Security* National Health and Free Secondary Education, he said.

It was therefore clearly logical that Hong Kong had to have substantial reserves in order to be prepared to deal with the situation that from 197^/75 onwards budget forecasts would show deficits, he added.

/He recalled .....

Thursday, March 16, 1972

- 10 -

He recalled that an agreement was reached in June 1968 between the United Kingdom and Hong Kong whereby the U.K. was to issue Hong Kong Dollar bonds to protect the Hong Kong dollar value of the Colony’s sterling funds in the United Kingdom.

’’This arrangement was, however, substituted in September 1968 by a Sterling guarantee which gave protection to the official Sterling assets deposited by all Commonwealth countries in the United Kingdom that the value of Sterling would not be less than US$2.40,” he added.

Mr. Lee pointed out that the advantages of putting a part of Hong Kong’s reserves in London was obvious because, besides that guarantee attraction, London had a large money market capable of offering good returns and sound investment opportunities for them.

Investments

The yield from the Colony’s United Kingdom investments was higher than that from Hong Kong, he added.

’■Notwithstanding these advantages, however, we must always consider how safe are our reserves against future monetary crisis affecting Sterling.

”1 think the time has now come when we should re—appraise our situation seriously,” he said.

Mr. Lee pointed out that since the re-alignment of all major currencies in the world in December last year, the parity of Sterling had been raised from US$2.40 to US$2.6057*

’’This almost completely changes the character of the Sterling guarantee for it is only below this rate will Hong Kong be qualified for protection and therefore, for all intents and purposes, the United Kingdom Sterling guarantee now means very little to Hong Kong,” he said.

/He went ••

Thursday, March 16, 1972

- 11 -

He went on to point out that the situation for Hong Kong was even more ’’uncomfortable” by reason of the fact that Government had extended similar guarantees to the banks in Hong Kong to protect the Hong Kong dollar value of their Sterling investments in the U.K.

”For, while a devaluation of Sterling from US$2.6057 to below US$2.40 is unlikely, the possibility of Sterling falling back to between US$2.6057 and US$2.40 should not be ruled out bearing in mind that the recent strength of Sterling is partly technical as reflected by the weakness of the U.S. Dollar,” he said.

Sterling

Mr. Lee added that should the U.S. Dollar regain its strength, Hong Kong would be open to risk that could arise from the possibility of Sterling being devalued to a rate below US$2.6057 but still above US$2.40 and yet the Hong Kong Dollar, for obvious reasons, might not follow such devaluation or might only follow partly as in the 1967 Sterling devaluation.

’’The result would then be that the Government has to compensate the banks for their losses which it could not recover under the United Kingdom Sterling guarantee because the U.S. Dollar value of Sterling would still be above US$2.40,” he said.

The ideal solution would be to raise the parity of US$2.40 in the guarantee to US$2.6057 or better still the gold content in Sterling should be guaranteed, he added.

’’With the Sterling guarantee expiring in September 1973, Hong Kong must in any case commence negotiation with the United Kingdom Government to find a solution to settle this complicated problem.”

/Commenting •••••

Thursday, March 16, 1972

- 12 -

Commenting on borrowing externally to finance Hong Kong’s desalting plant, Mr. Lee said the action taken by Government to raise money from the Asian Development Bank was economically and politically sound and should be supported.

The loan from the Asian Development Bank would be long term and the interest rate was lower than what Hong Kong was getting from its reserves, he said.

Other advantages associated with external borrowing which he would like to mention briefly were:-

* Hong Kong does not have to draw on its reserves thereby further strengthening its reserves position to meet contingencies;

* Hong Kong’s internal liquidity will be increased;

* External borrowing will counteract inflationary depreciation on the future purchasing power of reserves;

* External borrowing will create international presence and attention thereby bringing about psychological political stability.

On the proposal to refund only one half of the rate charged on unoccupied premises, Mr. Lee said that a charge of 7^ per cent on the rateable value of unoccupied premises would not effectively deter landlords or developers from keeping their premises vacant or unsold in a seller's market when demand exceeds supply.

On the other hand, this charge would be an unfair burden on the landlords and developers in a buyer's market when supply exceeds demand and premises were difficult to let or to sell, he added.

"The rates are basically charged on the occupation of premises; therefore tc levy charge on unoccupied premises would turn out to be a departure from the concept for which it was originally intended.”

/Mr. Lee

Thursday, March 16, 1972

- 13 -

Mr. Lee said the logical approach would be to charge a smaller percentage, say 2/? per cent to five per cent rates on vacant premises and the full 15 per cent payable only when they were occupied.

He added that a grace period should be given to premises newly completed, say six months from the date .of occupation permit and to premises that have been let three months from the date of their being vacant•

/ 14......

Thursday, March 16, 1972

- 14 -

BARGAINING POSITION ON ECONOMIC ISSUES

One Advantage Of Diversification Of Reserves

*******

The Hon. G.M.B. Salmon said today there might well be advantages from diversification of the Colony’s Sterling reserves bearing in mind the appreciation in value had Hong Kong held Deutchmarks or Yen.

He made this comment in the Legislative Council today when the debate on the Budget was resumed. The speaker before hi®, the Hon. Q.W. Lee, had dwelt in detail on Hong Kong’s reserves position and the changing character of the United Kingdom Sterling guarantee.

Mr. Salmon pointed out that diversification of the Colony’s reserves would give Hong Kong a bargaining position on economic issues elsewhere.

He did not know whether Hong Kong’s substantial reserves in London had been used for bargaining purposes in the textile negotiations with the British Government in January, he said.

But Hong Kong had full reason to be badly shocked and disappointed over the short notice of the quota controls in the United Kingdom and he hoped the Financial Secretary would keep the Council advised of developments, he added.

Continuing his comments in connection with trade, Mr. Salmon said he would like to make a further point which concerned Hong Kong’s public relations effort.

Hong Kong, he said, had an office in London and representatives in Brussels, Geneva and Washington.

/"I wonder, •••••

Thursday, March 16, 1972

- 15 -

"I wonder, incidentally, whether it would be worth considering having our own man in Tokyo as well,” he asked.

Certainly there was indication that Hong Kong’s public relations not only in the United Kingdom, but elsewhere as well, was lacking in some respects, he added.

”The Public Works Programme included in the Estimates shows the gigantic task with which the Department is faced, and they have my utmost admiration," he said.

It was inevitable that some projects got delayed for one reason or other, in whatever category they might be, he added.

Post Office

"But the long delay in the Colony Mail Sorting Office in Hung Hom and the General Post Office in Central stick out like a sore thumb; while it is absurd for an item, such as improvements at the Tathong Point Light Station, to go into Category E, in 19$9i and have to be upgraded to Category A in 1972 because it is now going to cost three times the original estimate."

A substantial cause of crime and drug taking had to be attributed to the home-life of many of the Colony’s citizens, not just in the overcrowded resettlement estates, but the many living in slum conditions in areas of very high density population, he said.

"One form of relief to the younger generation, and I personally think a most important one, is the provision not only of open spaces, and parks, and playgrounds for children, but also for places where sport of one sort or another can be played."

/Mr. Salmon .....

Thursday, March 16, 1972

- 16 -

Mr. Salmon said it was disturbing to see a "magnificent playground” at the top of Garden Road very much under utilised because of its location whilst other very worthy projects both in the urban areas and the Nev/ Territories lingering for many years in the planning stage.

From the massive building developments in Tsuen Wan and Kwai Chung, he had a nasty suspicion that even in that new township where recreational space could easily have been put aside with proper planning, there was not anywhere near enough amenities and facilities for the great many people who lived there, he said.

Sports

hV/e could and should do a lot more to provide areas for such games as tennis, basketball, volleyball, squash, and others, to get our youth using up their energy in open air sport rather than leaving them in their leisure hours with nothing much to do and nowhere much to do nothing in.”

Referring to the Estimates, Mr. Salmon said there was on Page 608 a list of Committees who determine whether individual building, engineering and waterworks projects should be included in the programme for consideration by the Public Works Sub-Committee.

”1 suggest a further Committee be now appointed, chaired I would hope by the Deputy Colonial Secretary, so that sporting and recreational facilities get equal attention in the consideration of priorities,” he said.

Mr. Salmon recalled that the Colonial Secretary in his Budget speech two years ago had said: ”The ability of the Post Office to cope with this increased work-load is hampered by very genuine problems of accommodation".

/”You, .....

Thursday, March 16, 1972

- 17 -

"You, Sir, have I know recently visited the G.P.O. and I am sure you will agree that if the Post Office staff were ’hampered* two years ago, they are today working almost miracles to receive, sort out and deliver the mail as they do, in conditions that are now really very difficult indeed.”

Although the G.P.O. would be getting another hanger on the Central Reclamation, what worried was its problems would be getting worse before they got better, because of the extraordinary inaction over building the Colony Sorting Office and new General Post Office, he said.

P: sizing Charges

On the Financial Secretary’s proposals to increase car parking charges, Mr. Salmon wanted to know whether that meant a policy of confining the ownership of a car to the very rich by penal taxation.

He suggested three practical measures to ease the traffic problems. They are:

* Continuation of the Colony’s substantial road programme;

* Provision of more multi-storey car parks;

* The gradual phase out of minibuses.

Mr. Salmon said that Hong Kong already had a substantial and commendable road programme — flyovers, widening of and improvement to roads, and so on — for all to see and there was a lot more to come.

He did not agree with the Financial Secretary that multi-storey car parks were not profitable.

/’’If the.....

Thursday, March 16, 1972

- 18 -

"If the operation of multi-storey car parks is not profitable to Government who do not have to pay out cash for land, what is the use of saying that land will be made available to private developers who will have to pay for land and will have even less hope of making car parks profitable," he said.

"I hope Government will think seriously again, particularly with the tunnel opening soon, and make provision for car parks, profitable or otherwise, where they are urgently needed to get cars off the side of the road and ease the traffic flow," he said.

Minibuses

Mr. Salmon urged that minibuses be phased out as quickly as possible and practicable as more double-decker buses come on the road.

"Minibuses are the biggest single obstacle for the movement of buses, trams, and everyone else."

"I have already said in this Council that minibuses are the craziest form of public transport in busy, congested urban areas, and I say it again this afternoon," Mr. Salmon added.

On pollution, he said not much had been heard lately of the "Keep Hong Kong Clean" campaign and the only reference to it.in the Estimates was that a co-ordinator had been appointed.

"I do hope this idea is not going to fall by the wayside because Hong Kong gets filthier and we should all be ashamed of it."

With regard to the harbour, Mr. Salmon said he hoped the question of the oil pollution unit being water-borne would be tackled without delay.

/He said

Thursday, March 16, 1972

- 19 -

He said the Marine Department's oil pollution unit, was apparently "hamstrung" by not having an appropriate launch to do its work.

"Being properly ready to deal with oil spillages, both minor and major, is of much importance," he said.

Meanwhile, the Hong Kong General Chamber of Commerce had already recommended that Government created an appointment at Director level with authority to co-ordinate and control the efforts of the many Departments involved towards the preservation of the environment, he added.

"I would urge this proposal be given a favourable response,"

Mr. Salmon said.

- - 0---------

/20.........

Thursday, March 16, 1972

- 20 -

THE HON. T.K. ANN URGES INDUSTRY SURVEY

On Both Technical And Marketing Aspects

*******

The Hon. T.K. Ann urged today that a survey be carried out into the prospects of Hong Kong’s existing manufacturing industries and of setting up new ones.

Speaking in the resumed Budget debate in the Legislative Council, Mr. Ann said there was an urgent need for such a survey. The world had changed, he said, and Hong Kong must find new targets and pave new approaches.

He suggested that the survey should cover both technical and marketing aspects.

It was immaterial whether Government or another agency undertook the survey, but Government support, in his view, was absolutely vital, for only Government was financially capable and had the ability for a comprehensive in-depth survey.

’’This survey is important and should be carried out in the coming year or two in conjunction with a study as to whether industry can sustain the heavy increases in Crown rents now much in discussion among industrialists,” he said.

Mr. Ann said industry needed to know the expansion potential of existing manufacturing industries for both short term and long term development as well as the probability of unresolvable competition from neighbouring countries who had developed well in the past decade.

/Possible •••

Thursday, March 16, 1972

- 21 -

Possible diversification into related fields, new industries having regard to Hong Kong’s present capabilities and potentials, market trends throughout the world for the types of products Hong Kong had traditionally produced and technological trends of which Hong Kong could take advantage, were also among the things an industry survey could find out, he added.

"The results of such a survey will definitely throw valuable light on the problem of attracting prospective entrepreneurs and more overseas investors, and in the meantime guide Government in her future industrial infrastructure planning," he pointed out.

Growth Rate

Mr. Ann agreed with the Financial Secretary’s prognosis that the rate of growth would ease before a resurgence could be envisaged in late 1973* "But the anticipated resurgence of the rate of export growth is based on the assumption that the overseas market demands will always be for the same goods which we are now able to produce competitively."

"This simply cannot be true to life," he added.

He cited a recent attempt by Hong Kong industrialists to increase synthetic fiber manufacture exports by staking new investment in that field as evidence of the need for change in Hong Kong’s industrial capability.

"The attempt was, unfortunately, frustrated by new restrictions imposed by Hong Kong’s trading partners," he said.

Hong Kong could not place reliance permanently on textiles, plastics and wigs — the three sectors which absorbed 61 per cent of the total employment of 671,308 persons who manufacture for both export and domestic consumption,

Thursday, March 16, 1972

- 22 -

Mr. Ann said he was deeply impressed some years ago by a Japanese delegate at an ECAFE meeting when he commented that Japan always endeavoured to meet overseas market demands by making changes in her line of exports.

A ready example was the transistorized pocket radio in which

Japan could no longer compete with Hong Kong, Taiwan and South Korea, he cited.

"In this regard, Hong Kong can be no exception," he stressed.

Hong Kong’s enamelware industry had dwindled from an export turnover of $72 million in 1956 to less than half the amount or 352 million in 1970, he said.

Industry

During the ten-year period i960 to 1970, it shrank from 2.2 per

cent of the Colony’s then total domestic exports to a present day percentage of 0.26 per cent, he added.

"On the other hand, our early planners saw the possibility of developing the electronic industry and expanding our garment industry by trying to penetrate the fashion domain.

"The Eoady-to-Wear Festival, which you, Sir, saw ten days ago, is the result of this exercise," he said.

Mr. Ann attributed Hong Kong’s prosperity to the deliberate laissez faire policy of the Colony.

"In Hong Kong’s circumstances any undue interference by Government will, we all agree, only stifle its growth," he said.

/lie commended

Thursday, March 16, 1972

- 23 -

He commended Government’s foresight of preparing ’’fertile ground” for Hong Kong’s industrial expansion by providing housing schemes for workers, industrial town planning, water supplies for industrial use, productivity promotion, export credit insurance, safety and health policing, just to name a few.

In planning, he said, Government could see ’’the forest as well as the trees” and was sufficiently powerful to point to a direction which led to new successes.

"The main concern of a Government is to ensure full employment and to improve the quality of life of its population.”

More Technicians

Mr. Ann pointed out that although a private entrepreneur knew better than Government what was best for himself and his business, he knew only what was good individually and not collectively.

Hong Kong needed a great many more technicians and craftsmen trained in fundamentals, and the technologists which the new polytechnic would be aiming to produce, he said.

”Our industrial workers must be better educated and technically prepared in line with what is happening in our neighbouring countries, otherwise we will be outpaced by them in no time," he pointed out.

Citing figures in the 1971 Census, Mr. Ann said it showed that 20,900 children in the 12 and 13 age groups were not attending school nor could they join industry.

/Of the age......

Thursday, March 16, 1972

- 24 -

Of the age group 14 to 17 inclusive, 152,549 had not

been attending school with 28,710 of this group employed in industry at the end of 1971, one could assume that about 125,000 in this age group were either unemployed or employed outside industry, he said*

Even a 10 per cent unemployment was a large number, not to mention those in the older age groups who might be in a similar situation, he said.

Jobs had to be found for all those young people who were unemployed and hence industrial development was an urgent matter of a magnitude only Government could provide the framework for, he added.

’Unemployment and unprofitable leisure are poison to young people,” he said. ’’The increasing number of violent crimes perpetrated by youth today must be due in part to the fact that children were not attending school nor engaging in gainful work.”

Free Schooling

Although Government was aiming at free secondary schooling for 50 per cent of this age group by 1976, it was not sufficient and moreover still had a long way to go, he said.

”1 suggest that the process be accelerated and the need be more emphasized and if feasible, technical biased education be provided to the extent of one-third of the candidates for post primary education,” he said.

”A well-thought-out White Paper on our social problems is most desirable,” Mr. Ann said.

Mr. Ann concluded his talk by endorsing fully the Financial Secretary’s ’’important indication of his new approaches” when he presented his Budget on March 1.

/tie agreed .••

Thursday, March 16, 1972

- 25 -

He agreed with the Financial Secretary that Hong Kong had to fit public expenditure to available public resources; that the present generation of taxpayers had contributed substantially in recent years to capital works; gradual abolition of estate duty will encourage overseas money to continuously flow into the Colony.

These and other points, such as, indirect taxes assuming a more important role for reasons which are partly non-fiscal; and that indirect taxation should not bear on industrial costs or on basic cost of living, Mr. Ann said, would provide the right climate for further industrial development.

/26.........

Thursday, March 16, 1972

- 26 - .

LOANS TO SMALL INDUSTRIES SCHEME

Success Depends On Speedy Processing Of Applications

********

The success or failure of the Loans to Small Industries Scheme depends upon the speed with which an application is processed.

The Hon. K.S. Lo sounded these words of warning when he spoke at the resumed Budget debate in the Legislative Council today.

"There must not be too much red tape in approving an application, and the time of waiting should not be more than two to three weeks at the most. Any unnecessary long periods of waiting will scare the small borrowers away and doom the scheme to failure," he said.

He added that it was most gratifying to be told that Government had at last agreed to accept the proposal made by the Trade and Industry Advisory Board for setting up a loans to small industries scheme.

"This comes to me as a great personal satisfaction since I have made so many pleas for such a project in the past."

Government’s acceptance of the scheme was a "significant triumph" for the small industrial enterprises and came in the nick of time when fixed investments in plant, machinery and equipment showed signs of drop, he said.

It was also the first time that Government had given official recognition to the part played by small industrial enterprises in the economic growth, and the contribution made by them in the domestic exports, Mr. Lo added.

/"Let us .....

Thursday, March 16, 1972

- 27 -

’’Let us hope this will encourage them into upgrading the quality of their products and updating their management practices.”

He pointed out that the initial amount of S30 million for the scheme was undoubtedly small, but he had no doubt that further funds would be made available once the scheme had proven to be a success.

Mr. Lo said he particularly welcomed the Financial Secretary’s departure from his predecessors by putting expenditure before revenue.

He pointed out that up to the present an attempt had been made to fit public expenditure to available public resources.

Community’s Needs

”Now that we have built up this huge surplus, I think it is time that we turn around to look at the community’s needs first and then try to find the necessary revenue,” he stressed.

”If in any one year the expenditure should exceed the revenue then we should either spend some of our surplus fund or increase the taxes or do both,” he added.

Mr. Lo said that surplus budgetting and inadequate forward planning were the two main reasons why more schools, housing, recreational and sports facilities were not available.

On Government’s lack of overall long term planning in the areas of social services, he recalled that he had said last year that had Government tried to assess the community’s requirements in education, housing, medical and health services, recreational and cultural facilities in the same manner as it had done with Hong Kong’s requirement for water, then planned them accordingly and set target dates to bring them into being, things would have been very much different today.

/”We have

Thursday, March 16, 1972

- 28 -

nWe have done it with water, is there any reason why we cannot do it with the other services," he asked. ___

Mr. Lo urged Government to develop the draft Colony Outline Plan which still remained a "conceptual document" into a "master plan" and "to appoint a high power body" to carry out the implementation.

Commenting on the high cost of the Civil Service, Mr. Lo pointed out that out of the 3384 million increase in recurrent expenditure, Civil Service emoluments accounted for $6 per cent of it.

"This represents a record of 22.5 per cent increase over the previous year."

Better Management

"I do not think that our civil servants are being overpaid. In fact, having the privilege of serving in the last Salaries Commission, I am quite satisfied that they are not.

"But even with my superficial observation in the course of our visits and exchange of views with the various departments, I am of the opinion that efficiency and productivity can be improved with better management," he said.

A great deal of this had to do with better organisation, supervision, training, simplification and mechanisation, and some assistance from outside management consultants would be most useful, he added*

Commenting on the Agriculture and Fisheries Department’s small allocation of the Budget for research and developmental work, Mr. Lo said that he had pointed out last year that over 90 per cent of the Budget was spent on administration and less than 10 per cent on the productive side.

/"I find .......

Thursday, March 16, 1972

- 29 -

"I find again in this year’s Budget, although the Department’s total expenditure had gone up by 21 per cent to $22 million, the money allocated for research and development had remained the same as last year, and in some cases the amount is even less than last year,” he said.

Quoting figures from the Department’s report, Mr. Lo said that production of pigs, chickens, ducks and vegetables for the past two years remained almost constant whereas there was no increase at all in the production of marine fish as compared to an average increase of five per cent between I960 and 1965 and four per cent between 1965 and 1970.

Research

He pointed out that the increasing demand without the corresponding increase in supply had made the price go up by 17 per cent in last year alone.

”We should speed up our fishery research in order to guide fishermen to better fishing grounds, and to introduce more efficient fishing vessels which the Department is doing at the moment in a small way.

”We should teach our young fishermen modern fishing techniques which their own parents are unable to teach them,” he said.

-------0---------

/30.........

Thursday, March 16, 1972

- JO -

GOVERNMENT URGED TO IMPROVE AMENITIES IN N.T.

Hon. Oswald Cheung Would Like Improvements In Low Cost Housing, Medical Facilities

********

The Hon. Oswald Cheung today urged Government to consider the improvement of amenities to people in the New Territories.

He also asked Government to look into the potential in housing and industry and the use for recreation of the New Territories.

Mr. Cheung was speaking in the Legislative Council today when the debate on the Budget was resumed.

’’The New Territories is one of our greatest assets, and it is of its proper development and the enhancement of its tremendous value that I rise to speak today,” he said.

He would like to see improvements made in relation to low cost housing, water supply, street lighting, telephone communications, garbage disposal, medical facilities, secondary schools and roads.

He pointed out that Government had already announced a low cost housing estate in Sha Tin with greatly improved amenities.

’’But apart from that, what of other areas such as Cheung Chau, Tai 0, Fanling and Taipo,” he asked.

They had not so far had subsidized housing and there was a need for low cost housing schemes in those places even if on a smaller scale than that contemplated for Shatin, he said.

/On the supply

Thursday, March 16, 1972

- 31 -

On the supply of potable water to villages in Yuen Long, Mr. Cheung questioned whether the recommendation made by the District Administration to the Public Works Department of one standpipe to 500 people was enough.

’’The rural committees think not. I think there are valid grounds for ameliorating this discontent.”

He added that there was ’’surprisingly a problem about water” in a number of places in the New Territories.

Improvement of water supply to Kat 0 Island had been dealt with but

Lamma Island was still not properly supplied, he said.

He also drew the Council’s attention to the need for water by the

fish culture industry.

Fresh Water Fish

”1 am told, and I believe these figures to be accurate, that whilst

we consume 450,OCX) piculs of fresh water fish a year, we only produce at present something like 40,CXX) piculs, the rest being imported from China,” he said, r

He believed that properly encouraged the fish pond operators could produce more but at present they were handicapped by the lack of a reliable supply of water.

’’Another problem among fish pond operators was the lack of fish fry,” he said.

”1 would ask therefore that Government examine the problem to see whether with its vast resources it could not greatly increase the supply,” he added.

Mr. Cheung went on to say that no street lighting was provided in the majority of villages.

/In this ••••••••

W Thursday, March 16, 1972

- 32 -

In this day and age, he added, it was not unreasonable for village people to ask for the installation of street lighting for their own safety and convenience.

"It seems to me neither a big problem nor its solution expensive," he stressed.

On telephones, he said, the rural areas were "woefully ill-supplied" and again the satisfaction of such requests seemed to him one which did not require vast expenditure.

"I ask that the Telephone Company be advised and the Postmaster General be directed to look into it," he added.

Pollution

Mr. Cheung said that the problem of garbage and pollution had largely grown as a result of confusion in the lines of command.

"Who is responsible for the disposal of garbage in the New Territories — the Director of Urban Services or the Commissioner for the New Territories," he asked.

"Who is responsible for clearing streams blocked with rubbish and litter," he added.

He suggested that the responsibility, if it had not been done already, be firmly entrusted to one or the other, and that the necessary staff and finance be given to tackle the problem.

Mr. Cheung said he was happy that the Director of Medical and Health Services had asked Finance Committee for money to improve the services at Pak Oi Hospital.

/"But .........

Thursday, March 16, 1972

- 33 -

’’But what perturbs me is on the one hand the complaint by rural committees that medical facilities in the New Territories are inadequate, and on the other hand, the fact that the facilities provided are not fully used.”

’’Are the right facilities provided? Is the policy of Government to have one clinic for every 100,000 of population the correct one to apply to rural areas?” he asked.

He suggested that the Director of Medical and Health Services might find it profitable to sit down with representatives of New Territories rural committees to discuss their needs, and that Government gave sympathetic consideration to them.

Shortage

There was a shortage of secondary schools all over Hong Kong but they were more deficient in the New Territories than in the urban areas, he said.

”1 think in this connection it would be right to encourage rural committees to get into contact with existing grant in aid institutions, who already ran successful schools in the urban areas, to see if their expertise could be available to the rural areas.”

This would fit in with Government’s policy of encouraging the establishment of secondary schools by private institutions by providing land, grants and loans, he added.

On the potential of the New Territories in housing and industry, Mr. Cheung, citing Sha Tin, said that the development of that area ’’ought to be a Town Planners dream” for there he starts practically from scratch.

/He did ........

Thursday, March 16, 1972

- -

He did not want to see the development spoilt by inadequate provision for roads and the indiscriminate sale of land so that in 10 to 15 years time there was a conflict between pedestrian and vehicles.

If Sha Tin was to have a population of 600,000 or possibly 1,000,000, it was important that access and egress from it be dealt with forthwith.

”It means at least three major arteries; a second tunnel parallel with the present road tunnel, double tracking the railway, a six-lane highway along the present Taipo Road, and a fork off it to Kwai Chung or a new road or tunnel through Shing Mun,” he said.

Citing Castle Peak, he said much had gone into its planning and construction, but what amazed and alarmed him was the fact that plans for it went ahead of communications with it.

Housing

On the wider question as to what the New Territories could contribute to ease the problems of housing and the expansion of industry, Mr. Cheung said that the ’’time has come when we really must sit down just to think about it’.’.

He said the District Commissioner of New Territories should be provided with more staff who unburdened with day to day administration, could devote their time to thinking and planning.

’’The development of the potential of the New Territories could be helped by bringing together a small group of four or five people outside of Government who should be charged with investigating into what the problems are and to advise on lines of development,” he added.

/Mr. Cheung

Thursday, March 16, 1972

- 35 -

Mr. Cheung pointed out that although the working population had been given one day of rest, not sufficient thought had been given to what they should do with it.

"They are descending every Sunday into the New Territories by the hundreds of thousands and we have not done anything like enough to cope with it." In his opinion, he said, it was not enough to say that roads and other facilities were sufficient for all needs from Monday to Saturday.

"We must develop facilities to cope with the needs for Sunday and in that regard I think that problem ought also be placed before the small group of four or five people to whom I have referred earlier," he said.

-------0---------

/36.........

Thursday, March 16, 1972

- 36 -

CORRUPTION CHARGES INVOLVING MINIBUSES Mrs. Elliott’s Offer To Bring Forward Witness Welcomed *******

Government welcomes Mrs. Elliott’s offer to bring forward witness to substantiate allegations of corruption involving public light buses which were contained in her recent petition to the Governor.

Mrs. Elliott was told this today on the telephone by the Solicitor General, Mr. Graham Sneath, who was replying on behalf of Sir Murray to her petition.

The Solicitor General explained that any witnesses who offered to come forward to assist in these investigations would have to be prepared to give their evidence before the Courts if investigations showed there were grounds for pursuing a prosecution.

Their statements would be taken by the Anti-Corruption Office and would be seen by the Principal Crown Counsel who is the Attorney General’s personal representative in the Anti-Corruption Office.

Mr. Sneath went on to explain that the alleged racket had been under investigation for some time but insufficient evidence to justify any prosecution had been obtained. These investigations were continuing and Mrs. Elliott’s offer to encourage reliable witnesses to come forward was therefore welcomed.

-------0---------

/37..........

Thursday, March 16, 1972

- 37 -

PRESS BRIEFING ON FAMILY SERVICES

Head Of Division Invites Newsmen To Conference

*******

Mr. T.P. Khoo, Senior Principal Social Welfare Officer and head of the Family Services Division, Social Welfare Department, met the Press today at an informal gathering in the West Kowloon District Office.

He took the occasion to introduce officers in charge of the Division’s various branches throughout the Colony, and gave an account of how the Family Services worked.

Mr. Khoo referred to the multiplicity of the Division’s concern, from adoption and child care to rehabilitation of the disabled and their ultimate placement in "open” employment.

He spoke about counselling services, liaison with the voluntary agencies responding to emergency situations, said work amon^ the blind, the deaf, the mentally retarded and the physically disabled.

Officers who met the Press on this occasion included Mrs. Evelyn Doe, West Kowloon; Mr. Choy Kim-fun, East Kowloon; Mrs. Rosie Chiu Young, Eastern District; Mrs. Wu Chan Kwai-hing, Western District; and Mr. Wallace Lee, New Territories.

Mr. Khoo thanked the journalists for their interest in the Division’s work, and sought their views on how to improve mutual communications so as to increase the harmony that already prevailed.

The conference was the third in a series designed to familiarise working journalists with different aspects of the Department’s work. In this connection, the "spotlight" has already fallen on the Training Section, and the Probation and Corrections Division.

-------0---------

/38.......

Thursday, March 16, 1972

- 38 -

MEDICAL AND HEALTH STATISTICS

For Week Ended February 19

*******

Statistics released today by the Medical and Health Department for the week ended on February 19, 1972 are as follows

Notifications of infectious cases (previous week’s figures in brackets) total 187 (267); amoebiasis — nil (one); bacillary dysentery — seven (six); chickenpox — 12 (37); enteric fever (typhoid) — three (nine); enteric fever (paratyphoid) — one (nil); measles — 19 (33); ophthalmia neonatorum — nil (two); poliomyelitis — nil (one); and tuberculosis 145 (178).

Births — total registered 517; 144 on Hong Kong Island, 315 in Kowloon and 58 in the New Territories.

Deaths — 398 from all causes; 121 on the Island, 25^ in Kowloon and 23 in the New Territories.

-------0----------

Z39..........

Thursday, March 16, 1972

- 39 -

WATER INTERRUPTIONS

Areas In Wong Tai Sin Affected

* * 4> ♦ ♦ ♦ ♦ ♦ ♦

Water supply to certain areas in Wong Tai Sin, Kowloon, will be turned off for five hours from 1 a.m. tomorrow (Friday), to enable Waterworks Office staff to carry out a leakage test.

The water interruption will affect Blocks 14 to 16 and 21 to 26 of the Wang Tau Hom Resettlement Estate and the area bounded by Junction Road, Wang Tau Hom East Road and Fu Mei Street.

On the following morning, water supply to some areas in the same district will again be stopped between 1 a.m. and 6 a.m. to enable another leakage test to be carried out.

This will affect Blocks 17 to 20 of the Wang Tau Hom Resettlement Estate and the area bounded by Fu Mei Street, Wang Tau Hom East Road, Wang Tau Hom North Road and Fu Yue Street.

0 -

Release Time: 9«15 p.m.

4000091 P.R.H. 7

HONG KONG GOVERNMENT

NFORMATION

SERVICES

DAILY INFORMATION BULLETIN

Wednesday, March 29, 1972

GOVERNMENT’S INTENTIONS — ”EXCITING AND UNEXCEPTIONABLE " Financial Secretary Replies To Unofficial Members’ Criticisms **********

The Financial Secretary, the Hon. C.P. Haddon-Cave, today described Government’s intentions as ’’exciting as well as unexceptionable”.

”This would be a very remarkable Government if our performance was not open to criticism,” he added.

He was replying at the resumed Budget debate in the Legislative Council to points raised by the Hon. Sir Yuet-keung Kan in his ’’frank and hard-hitting” speech on March 15*

The Financial Secretary said there were bound to be lags in the adaptation of existing policies to changing circumstances for the civil service, and the consultative process which surrounded it, would always tend to be preoccupied with wide ranging responsibilities.

These responsibilities extended from the maintenance of law and order to education; from the collection of statistics to the conduct of international commercial relations; from the oversight of the fishing and agricultural community to the management of a necessarily complicated land policy; from the provision of an adequate water supply to the housing of 40 per cent of the population; and from the provision of various local government type services such as street sweeping and firefighting in unusual conditions to a whole range of medical and health services which were available free to the lower income groups in the community.

/”To meet

Wednesday, March 29, 1972

2

"To meet these and many other responsibilities the Government employs nearly 100,000 public servants organised into 40 departments; and subvents on a deficiency grant basis educational, medical and social welfare institutions employing another 25,000."

The Government operated the largest industrial undertaking — the waterworks — in Hong Kong and the largest workshops as well as innumerable other establishments ranging from offices to police stations to hospitals to schools to fire stations and facilities of all kinds, he pointed out.

Government's Stock Of Vehicles

Add to that the Government’s stock of vehicles and equipment, the multitude of contractual relationships entered into for supplies and for building and civil engineering works and the "ubiquitous nature" of the Government’s activities, despite its liberal economic and fiscal policies, began to become apparent, he said.

"And so does the sheer unlikelihood of our performance being, at all times, and in all areas, perfect."

Sir Yuet-keung blamed Government’s less than perfect performance on what he described as "a serious deficiency in forward planning", on a restrictive financial policy and on a lack of confidence in Hong Kong and the people of Hong Kong resulting in a certain hesitancy in "many fields of endeavour", the Financial Secretary said.

"We are planning and forecasting all the time, perhaps not very tidily, but we are," he stressed.

/He cited, .......

Wednesday, March 29, 1972

- 3 -

He cited, the annually updated Five Year Forecast of Revenue and Expenditure, the Public Works Programme, the IQ-year water development sequences, the four year housing programmes, the airport development programmes, the Medical Development Plan, the Development Plan for the Fire Services, the setting of targets for the expansion of the education system, various special studies such as the Long Term Road Study and the Mass Transit Studies as well as a host of departmental studies which form the basis, for instance, of land use policy and reclamation.

Those had not been set down in an overall 5 or 5 or 10 year Development Plan but all were ultimately reflected in the annual Estimates and extensively documented.

Planned Economy

"But I think it can be fairly said that that sort of overall plan, which usually involves a planned economy too, tends to inhibit that flexibility of approach and execution which is so necessary if the needs of the community arc to be met; for, once a share of assumed available resources has been allocated to a particular service or department or sector of the economy, it is difficult to effect changes.

’Wot that, in any case, in Hong Kong’s circumstances we can ever make very firm assumptions about available resources - though we can, now, in the short terra, make such an assumption thanks to our much criticised reserves,” he said.

/The Financial

Wednesday, March 29♦ 1972

- 4 -

The Financial Secretary said that the size of Hong Kong’s reserves amounting to 33,923 million had to be assessed in terms of total expenditure.

On April 1, 1972, they would amount to 108 per cent of estimated expenditure in 1972-73 of #3,657 million; compared with 84 per cent in 1971-72 when the reserves had been 32,475 million and expenditure 32,930 million; compared with 65 per cent in 1968-69 when the reserves had been 31,173 million and expenditure 31,873 million.

’’Clearly, we are well protected against any short term slackening of the rate of growth of revenue, but we must not forget, secondly, that capital revenue only finances a proportion of capital expenditure,” he pointed out.

Capital Expenditure

In years of high land sales and/or relatively low capital expenditure that proportion had been as high as 60 per cent but, conversely, in years of low land sales and/or high capital expenditure the proportion was much lower; and, with the very high levels of capital expenditure to be expected in the next few years, the proportion would be as low as 15 to 25 per cent, he said.

”In 1972-73 it is put at 25 per cent, as Honourable Members will see from Appendix III of the Estimates,” he added.

In absolute terms, of estimated capital expenditure in 1972-73 of 31,131 million, only 3287 million would be financed from capital revenue and in 1975-76 probably only about 15 per cent of forecast capital expenditure of 41,400 to 31,500 million would be so financed, he said.

/"Wo need

Wednesday, March 29» 1972

- 5 -

,rWe need to consider our reserves in terms of the unspent balance in Category A of the Public Works Programme, that is, projects to which we are already fully committed.”

At this moment that balance was 331548 million compared with

Si,756 million about a year ago and 81,631 million in February 1970, he said.

"Thirdly, and this is surely significant, the years in which our reserves have increased substantially have been years in which expenditure has likewise increased.”

At the beginning of 1970-71 the reserves amounted to Si,726 million and although expenditure had increased by 21 per cent, the reserves at the beginning of 1971-72 amounted to 52,475 million, duo mainly to a budget surplus of 8618 million.

Budget Surplus

In 1971-72 expenditure had increased by about 20 per cent and yet the reserves at the beginning of 1972-75 would be about S3,9OO million, due partly to a budget surplus of about 8700 million, he said.

”1 would suggest that the conclusion to be drawn from these figures is that our surpluses in recent years have been due to the strength of the economy^ growth movement, not to under-spending or to under-provision for spending,” the Financial Secretary said.

One important fact he had to mention was that while the reserves had increased from 51,173 million at April 1, 19&8 to 531923 million four years later or by 52,750 million, only 51,975 million could be accounted for by surpluses on the General Revenue Account, he said.

”The remaining

Wednesday, March 29, 1972

- 6 -

,fThe remaining $775 million is accounted for by appreciation of the book value of our investments and an increase in the surplus available for transfer from the Exchange Fund.”

The Financial Secretary said he could not agree with Sir Yuet-keung’s diagnosis that ’’the Government has exhibited less faith in the resilience of the Hong Kong economy than the people of Hong Kong themselves.

,fWe have been surprised at times that the growth rate of the economy has been so strong, but then the determinants of growth are so largely external•

"Who would have predicated, for instance, the coincidence in 1969-71 of the following factors: renewal of confidence, inflationary demand in our major overseas markets, a continuing inflow of funds from abroad, a re-emergence in a new form of the entrepot trade, a booming tourist industry and an upward swing of the building industry underpinned by a large number of long tern civil engineering contracts?

Government Policies

’’But I can sec no evidence whatever of Government policies being inhibited by nervousness of any kind: only prudence and an anxiety to get value for money, to utilise our resources to the best advantage and to avoid costly mistakes,” he said.

’•With respect, therefore, to my honourable Friend I honestly do not think his charge that a deficiency in forward planning, a restrictive financial policy and a lack of confidence have limited our horizons and frustrated the realisation of our intentions will stand up to a serious examination,” the Financial Secretary said.

/Replying to

Wednesday, March 29, 1972

- 7 -

Replying to criticism that Government’s performance against intentions had been substantially less than adequate, he said a very large number of people outside the Civil Service were associated with the executive and decision-making process via membership of Government’s network of advisory boards and committees.

”The whole system is designed to lay the performance bare.”

Neither the Government nor the Civil Service complained about that; nor about attacks on specific targets, he said.

"But these attacks must be seen against our total performance and the speed and accuracy of our responses to particularly urgent situations.

Sufficient Revenue

"They must be seen against our ability to raise sufficient revenue for the public services without recourse to tax increases and here I would like to pay tribute, Sir, to the record of the Inland Revenue Department these past nine years under Mr. Duffy’s leadership,” ho said.

They had to be seen also against Government’s failure to make serious mistakes, »»for serious mistakes we can ill afford”, he added.

The Financial Secretary said Sir Yuet—keung two weeks ago had referred to — ’’Government activity moulded and restricted by a financial policy which ••••• has erred on the side of conservatism and pessimism” — and the Hon. Szeto Wai had accused successive Financial Secretaries of ’’deliberately underestimating revenue to slow down the rate of growth of expenditure •••••”.

"This simply is not true,” he said.

/’’Of course, .......

Wednesday, March 29, 1972

- 8 -

"Of course, Financial Secretaries will always err on the side of caution, but not for the Machiavellian reasons ascribed to them by my Honourable Friends," he added.

He wondered how "free and easy our critics inside and outside this Chamber" would be about what Mr. Browne had described as the "credibility of the Estimates" if Hong Kong had not been operating against a strong reserve position, he said.

"And strong we intend to keep it, despite the fact that on my last count various commentators, again inside and outside this Chamber, have spent our reserves several times over," ho stressed.

Substantial Amounts

Ho explained that only in the last three years when the Colony was enjoying a "remarkable growth movement", had revenue exceeded expectations by substantial amounts.

Mr. Haddon-Cave went on to say that he could not believe that his Honourable Friends did not wish a degree of control to be exercised over the rate of growth of expenditure.

"V/e do this directly and not indirectly by fiddling the revenue estimates," he emphasised.

"Indeed, it is with the utmost reluctance that we ever take the easy way out and say of such and such a project or proposal to expand a service: we cannot afford it," he said.

"Furthermore, our system permits a degree of flexibility which is probably unique," he added.

/He was

Wednesday, March 29, 1972

- 9 -

He was referring to the Financial Secretary*s delegated powers to authorise spending on personal emoluments up to the limit of the approved establishment; his delegated powers to authorise spending on public works projects up to approved project estimates; the fact that there had always been more work in the Public Works Programme than could conceivably be completed before the next batch of projects came forward for upgrading to Category A despite substantial increases in the establishment of the Public Works Department in recent years and increased use of consultants; and finally, the fact that total vote provision, or spending authority, had in recent years been around 112% of actual expenditure and around 115% of the original estimates.

Estimates Of Revenue

"The question does arise, of course, whether ray estimates of revenue for 1972-75 are realistic: I cannot say with certainty, nor can ray honourable Friend Mr. Szeto. For all his good humoured scepticism I heard nothing in his speech which amounted to a critique of my forecast.

"But I can assure both him and my honourable Friend Mr. Browne that I am as anxious as anyone that the Estimates should be ’credible*• I believe they are," he said.

The Hon Szeto Wai, while deploring in one breath "the amassing of huge yearly surpluses" had implied in another that Govcrment should not compete with the private sector for available resources.

/"But .......

Wednesday, March 29, 1972

- 10 -

,rBut it is simply not possible, except at a social cost, for the demands of the public sector to be cut back at a time when the economy as a whole is expanding with all that that means in terms of the community’s requirements for new facilities and expanded services."

In yet the next breath, my honourable Friend pleaded for "a suitable but not extravagant boosting of public expenditure", he pointed out.

"I find this, in fact, u most adequate description of the 1972-73 Draft Estimates of Expenditure and I commend them to my honourable Friend for his further attention," he said.

Long Term Bond

The Financial Secretary assured the Hon. Wilfred Wong that the financing of the deficit on capital account would not, within limits, be allowed to inhibit the steady expansion of the Colony’s recurrent services and that, in certain circumstances, Government would "cheerfully draw down our reserves".

On Mr. Wong’s suggestion that major public works should be financed with local bond issues, he pointed out that there were various complicated aspects of any attempt to raise funds locally in that way which perhaps had been overlooked.

"Obviously the success of a large long term bond issue would be dependent on the Government being prepared to offer re-purchase facilities or on the development and maintenance of a secondary market throughout the life of the bonds," he said.

/On Hong Kong’s •••••••

Wednesday, March 2% 1972

- 11 -

On Hong Kong’s foreign exchange reserve position, the Financial Secretary said he hoped to be holding discussions in London shortly on the management and security and future of the Colony’s sterling assets.

”1 would prefer to say no more at this stage except that I have taken careful note of the various points made,” he said.

0--------

Wednesday, March 29, 1972

- 12 -

MORE RESOURCES — REAL AND FINANCIAL — TO TACKLE TRANSPORT PROBLEM

Expansion Of Road Networks, Rail And Water Links

*******

The Financial Secretary, the Hon. C.P. Haddon-Cave, said today that in Government’s view the time had come to devote a larger proportion of the Colony’s real and financial resources to the emerging movement problem of the 1970s and 1980s.

He was replying to points raised by Unofficial Members when debate on the Budget was resumed in the Legislative Council.

’’Any overall policy must obviously involve three elements, namely, first, the expansion of our network of roads and rail and water links; secondly, the improvement of public transport facilities; and thirdly, the restraint of private transport,” he said.

A cursory look at the Public Works Programme would show that there was a growing emphasis on the development of the Colony’s road network and other improvements, such as, flyovers, bus termini, and the double tracking of the Kowloon/Shatin section of the railway.

In addition the Long Term Road Study was to be updated to take account of the results of the 1971 census, he said.

The bus companies and the ferry companies had been pressed to improve their services and measures had been introduced to improve their financial stability, he said.

Public Light Buses had been regularised but were still a somewhat controversial form of public transport, he added.

/Although ••••••••

Wednesday, March 29, 1972

- 13 -

Although in the long run they would not be regarded as efficient contributors to the public transport system, the Financial Secretary said he did not agree with the Hon. G.M.B. Salmon that they should be phased out as soon as possible.

He pointed out that the reconstruction and expansion of the road network and ancillary works and the improvement of public transport had to be coupled with policies designed to optimise the use of available road space.

0/*rail Policy

The third element in the overall policy — the restraint of private transport — involved first, freeing the roads of stationary vehicles; secondly, encouraging the use of vehicles which were efficient users of road space in terms of number of passengers carried; thirdly, discouraging the use of vehicles which were inefficient users; and lastly, developing offstreet parking facilities and charging for their use, as well as for onstreet parking where it could be permitted, on an economic basis. Later, charges will have to be pitched at a higher level as part and parcel of the overall control of the use of road space, in the interests of the community as a whole, including motorists, he said.

”It is surely significant that, whereas some 6,OCX) trams, buses and mini-buses carry almost four million passengers daily, our 100,000 private cars carry only about 500,000,” he stressed.

He added that the carrying capacity of even the present fleet of public transport vehicles would be increased possibly by as much as 25 per cent if the road had been clearer.

/In building .......

Wednesday, March 29, 1972

- 14 -

In building up the public transport system, the addition of an underground mass transit railway would undoubtedly be beneficial, but it would cater for only one third of public passenger journeys that were expected to be made in the design year 1986.

”1 think it is important that everyone in Hong Kong should realise that a mass transit railway would not itself constitute a solution to our transport problems,” he said.

An underground mass transit railway could play an important role in the public transport system as a whole, he said. >

’’What is difficult is to decide first, whether our transport needs outweigh other calls upon our resources to such an extent that a substantial sum of public money should be committee to assist in the financing of this project rather than many others?

Interest Rate

”If so, secondly, can it be constructed without undue disruption?

’’Thirdly, can the outside capital finance be obtained on appropriate terms as regards the interest rate and the repayment arrangements which, for this project, would require an unusually long grace period?

’’Fourthly, can the system be operated in such a way as to generate a sufficient cash flow to service the investment and cover operating costs?

”If not, fifthly, should the system be subsidised from public funds, that is to say, should our transport needs take precedence over other social improvements,” he pointed out.

/On the financial •••••••

Wednesday, March 29, 1972

- 15 -

On the financial side one very large unknown factor was the capital cost, he said.

’’All our cal cul at ions have to be based on assumed prices and, more important, assume that contractors will not seek to cover the risks of working underground with excessively large margins,” he added.

”But whatever the ultimate decision on the mass transit railway, the Government is not thinking in piecemeal terms even if the actual implementation of a coherent and internally consistent transport policy has necessarily to be piecemeal, because serious problems of road congestion are already apparent in certain areas at certain times,” he said.

-------0---------

Wednesday, March 29, 1972

- 16 -

INTRODUCTION OF NEW PARKING CHARGES TO BE DEFERRED

Announcement By Financial Secretary

********

The Financial Secretary, the Hon. C.P. Haddon-Cave, suggested that the new parking charges be deferred for a month or two.

He said this in the Legislative Council today when the debate on the Budget was resumed.

’’When I proposed the increased car parking charges in the Budget Speech I was at pains to stress that they did form part of our overall thinking and that they were only a beginning," he said.

!rHowever, as Honourable Members seem to be reluctant to see even the early beginnings of a restraints policy in the context of an overall policy along the lines I have described, I can only suggest that the introduction of the new charges be deferred for a month or two," he added.

In themselves, and at the new levels now proposed, car parking charges might not ease road congestion by discouraging the use of cars for certain types of journeys, he said«

"But this is their ultimate objective and this means that higher charges as well as other measures will have to be considered in due course," he said.

"Perhaps we all tend to think of higher parking charges as a means of equating the demand for with the supply of parking spaces," he added.

In fact, the resource which was in really short supply and which, unlike parking spaces, was incapable of expansion in certain areas, was road space, he stressed.

/’•If the policy

Wednesday, March 29, 1972

- 17 -

”If the policy of restraining the use of road space is to be achieved by raising parking charges, then there must always be a certain vacancy ratio in the parking facilities available in the central business areas,” he said.

’•At what level of charges this can be achieved will depend upon three factors: the strength of demand, which in turn will depend partly on the availability of public transports; the supply of parking spaces in the central business areas; and the supply of parking spaces on the outskirts of the main business areas, the provision of which will be more attractive to private developers the higher the level of parking charges in Government-owned car parks in the central areas,” he explained.

Private Car Parks

It was true that, at a given level of charges, there could be an over-provision of private car parks in terms of the policy objective of limiting the number of cars using the roads (as opposed to the other objective of getting stationary cars off the roads).

At this point, however, there would have to be a planned restriction on the availability for sale of car park sites.

”My honourable Friend Mr. Szeto seemed to suggest that the only problem was to find sites for car parks and that this could be done by a Colony wide survey.”

But there is no real shortage of such sites in relation to the real shortage - the inescapable shortage - which is a shortage of road space,” he stressed.

/Thus, •••••••••

Wednesday, March 29, 1972

- 18 -

Thus, the purpose of increasing parking charges stemmed, not so much from the present shortage of parking space, as from the limitation on the availability of road space in our urban society, he explained.

The Hon. G.M.B. Salmon had asked whether higher parking charges had been designed to restrict ownership of cars, he said.

”1 must say here and now that the aim of higher parking charges is not to limit car ownership; rather, to repeat, the higher parking charges — and even higher charges to come — are designed to restrict the use of cars rather than their ownership,’’ he stressed.

Mr. Salmon’s view was that, in the Central district of Hong Kong Island, Government car parks made a profit, he said.

’’This is not so: overall we lose S59 per space per month,” he added.

Even if the new charges do not have a deterrent effect, they will only result in our breaking even on an historical cost basis,” he said.

/19..........

Wednesday, March 29, 1972

- 19 -

SUBVENTIONS FOR VOLUNTARY WELFARE ORGANISATIONS Financial Secretary Explains Allocation Methods ********

The Financial Secretary, the Hon. C.P. Haddon-Cave indicated to the Legislative Council today there would be no change, at least for the time being, in the bases upon which subventions are made to voluntary welfare organisations.

Speaking at the resumed Budget debate, he said nearly all subvented voluntary organisations were being assisted on the discretionary grant basis. Government, he explained, was still operating on this basis, largely because it had not yet crystallised its views on the development of social welfare services through the voluntary sector.

However, he understood that the Director of Social Welfare was now formulating revised aims for social welfare and drawing up specific targets to meet these aims over a five year period,

’•Subject to these recommendations being accepted by Government, I am confident it will be possible to devise ways and means to enable public funds to be applied more positively and meaningfully,”Mr. Haddon-Cave said.

The Financial Secretary was replying to a point raised by the Hon. Mrs. Ellen Li, who had suggested that a system of what she called deficit subsidies be adopted by Government for social welfare services in very much the same way as medical and education subsidies, if a uniformly high standard of service was to be maintained.

/Explaining

Wednesday, March 29, 1972

- 20 -

Explaining the different bases upon which subventions were made, the Financial Secretary said recurrent subventions were made either in the form of a deficiency grant; or in the form of a discretionary grant.

A deficiency grant is a subvention designed to meet the difference between a subvented organisation’s approved expenditure for a programme of activities approved by Government and its income from other sources. These grants are normally made available to organisations providing necessary services that Government does not itself provide, or does not provide in full, for historical, accidental and other reasons.

Discretionary Grant

A discretionary grant, on the other hand, is a lump sum grant designed to assist towards activities which Government considers to be no more than desirable and worthy of support. Organisations receiving discretionary grants are independent bodies over whose operations Government exercises little or no control and, unlike deficiency grant organisations, these agencies do not have to refund unspent balances in their subventions.

The Financial Secretary said nearly all subvented voluntary welfare organisations arc assisted on the discretionary grant basis.

’•The reason for this is that Government’s policy for many years has been that voluntary welfare organisations are, with some special exceptions, not the agencies of Government unlike aided schools and large medical organisations,” Mr. Haddon-Cave said.

/"By.........

Wednesday, March 29, 1972

- 21 -

nBy and large, they take their own policy and financial decisions; and public funds are made available only where we believe assistance to be desirable.”

The Financial Secretary warned that a deficiency grant basis of subvention might not be suitable for welfare agencies. This was partly because it would involve a degree of control that the Social Welfare Department was not at present staffed to exercise, partly because such controls would be costly, and partly because the diversity of social welfare services in the voluntary sector did not readily lend itself to controls.

-----0------

Wednesday, March 29, 1972

22 -

CREATION OF HONG KONG MERCHANT SHIPPING REGISTER Suggestion Under Careful Consideration ********

The Financial Secretary, the Hon. C.P. Haddon-Cave told Legislative Council today that Government was giving careful consideration to the possible creation of a Hong Kong Merchant Shipping Register.

The Government, he said, was now working on this question but there were problems to be overcome and these would involve consultations with the United Kingdom and perhaps with other Commonwealth countries#

The creation of a Hong Kong Merchant Shipping Register was one of the points raised by Unofficial Members when they commented on the Budget two weeks ago*

Mr. Haddon-Cave said the Director of Marine was currently in contact with the Hong Kong Shipowners Association and the Hong Kong General Chamber of Commerce with a view to drawing up proposals on the subject.

The Financial Secretary then referred to the comment that countries allow the use of their flags primarily because they treat registry as a source of revenue, whilst at the same time attempting to evade the responsibility of applying international conventions other than in the letter*

He realised it was not suggested that Hong Kong should tread this path through a relaxation of safety standards for Hong Kong vessels, simply to allow or even encourage registry in Hong Kong at a handsome fee* But he agreed that the creation of a separate Hong Kong Shipping Register could bring some advantages*

/It would, .........

Wednesday, March 29, 1972

- 23 -

It would, for instance, allow the Director of Marine to adopt a more flexible approach to the conditions of registration. But it would not absolve Hong Kong from meeting its obligations as a signatory to various international safety conventions, such as those associated with life-saving and radio equipment, fire appliances, loadline requirements, and the construction of vessels having regard to structural strength.

"So far as these matters are related to safety of life at sea, the standards agreed to at international level must be maintained, if not improved upon, by signatories to the relevant conventions,” Mr. Haddon-Cave said.

; inniuts ui Vessels

On the manning of vessels, the Financial Secretary said the present legal requirements were laid down in the Hong Kong Merchant Shipping Ordinance, which stipulated that all officers should be British nationals with a certificate of Commonwealth validity. This legislation was based on the United Kingdom Merchant Shipping Act and the standards required were similar to those applied to all British ships, that is ships registered in any Commonwealth country.

The Director of Marine, however, had powers under the Merchant Shipping (Aliens Employment) Ordinance, which provided for aliens to be employed on British ships under certain conditions. Such exemptions were normally granted only when an alien was in possession of an acceptable certificate of competency in the first instance.

The Financial Secretary added: ”If we were to alter our requirements for officer manning aboard Hong Kong registered vessels, then it would be necessary to hold detailed consultations with the United Kingdom Department of Trade and Industry to seek acceptance of our proposala on a Commonwealth basis.”

/Mr. Haddon-Cave

Wednesday, March 29» 1972

- 24 -

Mr. Haddon-Cave pointed out it was worth noting^ in this connection, that the International Maritime Consultative Organisation was attempting to develop internationally accepted standards for the training and certification of merchant marine officers. If this study were to lead to greater acceptance of officers meeting internationally accepted standards it could well be of help to Hong Kong in overcoming the manning problem*

Wednesday, March 29, 1972

- 25 -

INTRODUCTION OF MORE ADVANCED FISHING METHODS AI D EQUIPMENT Continuous Investigations By Agriculture And Fisheries Department *******

The Agriculture and Fisheries Department is continuously investigating more advanced fishing methods and equipment for use by the local fishing fleet.

The department is also currently designing a prototype modern trawler of improved standards in terms of working conditions, safety, efficiency and comfort. The first of such vessels may be introduced within the next year or so.

The Financial Secretary, the Hon. C.P. Haddon-Cave told the Legislative Council today the new type vessel would involve a higher rate of capital investment when compared with existing types of modern vessels.

He added: ”It must be recognised that it is not likely that the younger generation of Hong Kong’s fishing community will be attracted to work on board fishing vessels unless these improved standards are provided.”

The Financial Secretary was replying to suggestions made during the debate on the Budget that money spent on research and development constituted only a small proportion of the allocation to the Agriculture and Fisheries Department.

He said an examination of the 1971-72 figures would show that of a total expenditure of about 318 million only 15 per cent was spent on administration, but 23 per cent was spent on research, 56 per cent on development and 28 per cent on regulatory requirements.

The pattern, he said was very similar for the 1972/75 estimates

/The Financial

Wednesday, March 29, 1972

- 26 -

The Financial Secretary assured the Unofficial Members that the Director of Agriculture and Fisheries was only too conscious of the need to provide training and engaged in research to increase the productivity of the fishing fleet.

He said there was a shortage of fishing crews in Hong Kong and the younger generation was becoming less willing to pursue that “adventurous life of the sea" to which the Hon. K.S. Lo referred.

Mr. Haddon-Cave said the general economic development of Hong Kong had made life ashore more attractive. Many young sons of fishermen had gone overseas and whole fishing communities in the New Territories had ceased fishing completely or reduced their fishing activities because of the inflow of money from abroad.

The much higher standard of education now available for fishermen’s children had also led to a reduction in the numbers of potential fishermen, he said.

-------0---------

Wednesday, March 29, 1972

- 27 -

HONG KONG SOCIETY OF ACCOUNTANTS

Legislation To Be Introduced Shortly

*******

Legislation for the establishment of the Hong Kong Society of Accountants will be introduced into the Legislative Council in late April or early May.

The Financial Secretary, the Hon. C.P. Haddon-Cave, said today that final drafts of the bill and of the by-laws had now been agreed both by a Government working party and a working party of practising members of the profession.

Replying to queries from Unofficial Members concerning the employment of qualified accountants in Government departments, Mr. Haddon-Cave said the approved establishment of such posts was 57, and there were five vacancies.

He said if recruitment possibilities in recent years had been more promising the establishment might well be larger.

The Financial Secretary agreed that accountants were thin on the ground, but added that the Accountant General intended to review the position once he was able to assess the effect of the improved terms resulting from the recommendations of the 1971 Salaries Commission.

-------0----------

/28........

Wednesday, March 29, 1972

- 28 -

BILL TO PROTECT DEPOSITORS AND TO PREVENT FRAUD Draft Legislation In Advanced Stage 4c ** ******

Draft legislation aimed at protecting depositors and to prevent fraud is in an advanced stage of preparation and should be finalised fairly soon.

The Financial Secretary, the Hon. C.P. Haddon—Cave announced this in the Legislative Council today when debate on the Budget was resumed.

Replying to questions raised by the Hon. H.J.C. Browne about the implementation of the recommendations in the First Report of the Companies Law Revision Committee, he said that since the middle of January this year, Government had engaged Mr. James Selwyn, a retired Adviser in the Bank of England, to assist in processing ’’this comprehensive and complicated’1 Report.

He was pleased to say that significant progress had been made in the preparation of legislation on the basis of the Committee’s recommendations.

On securities with particular reference to stock exchanges, the Financial Secretary said the chapter dealing with it was rather more complicated.

There was much to be said for the Committee’s firm conviction that Government should not get too deeply involved in attempts to regulate and supervise stock exchanges and dealings with them.

On the other hand, in the present circumstances of Hong Kong, self-regulation of the kind and to the extent that existed in Britain might take a little time to achieve, he added.

/”The problem •••••••

Wednesday, March 291 1972

- 29 -

"The problem is that of finding a workable balance between direct Government supervision and self-regulation by the exchanges themselves," he said.

He said that considerable discussion had taken place between Mr. Selwyn and various interested parties with a view to finding the most satisfactory plan for Hong Kong.

"Some tentative conclusions have been reached which will enable a draft Bill to be sketched out, but much work remains to be done on the details," he said.

The proposal to license investment advisers and portfolio managers had been given low priority, as recommended by the Committee itself, he said.

As regards company prospectuses, the Financial Secretary said a draft Companies (Amendment) Bill giving effect to the Committee’s recommendations had been finalised and would be submitted to the Executive Council within the next few weeks.

On take-over bids, he said consideration would be given to that aspect of the Report soon after the Committee’s more urgent recommendations had been dealt with.

As regards mutual funds and unit trusts, the Financial Secretary said that a first draft of a Unit Trusts Bill had been completed.

Drafting of a Mutual Funds Bill was also proceeding, but might take rather longer in the absence of corresponding British legislation.

/He explained

Wednesday, March 29, 1972

- 30 -

He explained that although mutual funds and unit trusts had similar financial aims, the legal concepts involved were quite dissimilar and it would not be practicable to deal with both those investment media in a single piece of legislation.

0--------

/31.........

Wednesday, Karch 29, 1972

- 31 -

RECORD '51,200 MILLION FOR PUBLIC WORKS IN 1972/73 Look To The New Territories For Further Expansion

The Director of Public Works, the Hon. J.J. Robson, said today more than vl,200 million will be spent on Public Works in the coming financial year — a record by any yardstick.

“But this will be eclipsed by that of the next year when total expenditure by the Public Works Department will probably exceed 31,500 million on projects already approved and in the Public Works Programme,” he added.

Mr. Robson was replying to questions raised by Unofficial Members on March 15 and 16 when debate on the Budget was resumed in the Legislative Council.

He recalled that he introduced his speech last year by explaining that to achieve a rate of expenditure of around -51,270 million would not be easy either for the Public Works Department or the Construction Industry.

Each year it required more staff time to spend the public works dollar as projects were becoming progressively more difficult and expensive to construct because of shortage of sites, rising standards and congestion of both the Colony’s roads and environment, he said.

"I was, however, hopeful that the wages and materials fluctuation clauses introduced into Government contracts would give contractors confidence to bid for Government contracts and that by increasing the number of contracts under construction the delays caused by rising costs to the contractor and shortage of labour could be overcome.”

/Mr. Robson.....

Wednesday, March 29, 1972

- 32 -

Mr. Robson explained that his 1971/72 estimates had been prepared on that basis and he was happy to say that his hope that they would not prove to be too far off the mark had not been misplaced.

The approved 1971/72 Non-Recurrent P.’-.'.D. estimates were 3530 million and ho expected to snend $550 million. The total of the Non-Recurrent P.W.D. estimates for the past three years 31,189 million as compared with an actual expenditure of 31,219.5 million.

”My forecasts must make provision for rising costs, the chances of filling vacancies on establishment, and the many factors which can effect the 600 odd projects for which funds have been provided in this year’s estimates and the 400 odd contracts which are running at any moment in time over the year,11 he said.

P.W.D. Estimates

In the circumstance the P.h’.D. estimating had not been too bad and that was only possible because of the extreme flexibility of the financial system and the despatch with which first the Public Works Subcommittee of the Finance Committee of the Legislative Council approved projects for construction and then the approval of the necessary funds by the Finance Committee.

Mr. Robson said that he was to blame for what the Hon. Szeto Wai had described as nthe gloomy forecast of returns” from land sales of 3149 million which he had made last year.

For the coming year he had estimated a return of 3223 million but those estimates had to be made anticipating market prices 15 months ahead, he added.

/He refuted ••

Wednesday, March 29, 1972

- 33 -

He refuted the statement made by the Hon. H.J.C. Browne which suggested that Government restricted the amount of land made available for sale in order to secure excessively high premia.

’’This, of course, is not so. The allegation has been denied a number of times in recent years and I am surprised to find that the view is still held by my Honourable friend,” he said.

He assured Mr. Browne that in the urban areas his department was offering as much land as it possibly could for sale by public auction and at no time had withheld a land sale to achieve excessively high revenue, he added•

Sales Programme

The Sales Programme for the next six months from April to September 1972 contained 66 lots in the urban areas with a total area of over one million square feet covering residential, industrial and commercial property, he said.

”It is hoped that a somewhat similar programme will be possible in the following six months from October 1972 to March 1973*

’’But it will not be possible to keep up this rate of sale indefinitely as suitable sites in the Urban Area are becoming fewer and those which can be found are more difficult to develop,” he said.

The Urban Area was becoming more and more congested and therefore, for the future, one had to look to the New Territories for further expansion, he pointed out.

Ample land was becoming available at, for instance, Castle Peak where over 300,000 square feet of industrial land was available for sale.

/Referring.....

Wednesday, March 29, 1972

- 34 -

Referring to Shatin, the Hon. Oswald Cheung had stressed the need to provide adequate space for roads for Government and Community use; the segregation of pedestrians from vehicles; and the need to ensure that the new township had adequate road and rail access between Kowloon and Shatin and with the neighbouring township of Kwai Chung-Tsuen Wan.

Mr. Robson explained that when large scale detailed planning layourts were prepared adequate road provision would be made in each of the planning areas to match the extent of development planned, both in government and private sectors.

Planning For Shatin

‘A feature of the planning for Shatin is the provision of a hierarchy of roads for the main types of traffic encountered, with the primary network providing direct access to the town from Kowloon and Tsuen "an.”

These roads would be of the limited access type and would include grade-separation at all intersections to ensure that the capacity of the system for traffic was maximised, he said.

A system of secondary or district distributor roads would distribute the traffic to the various areas within the town where the local roads would provide access to the individual developments, he added.

As far as the second Lion Rock Tunnel was concerned, Mr. Robson said that he would seek funds at the First Review of the Public Works Programme on May 5 to enable a start to be made on an enlarged Waterworks Tunnel required for the High Island Scheme as that would be made big enough to take vehicular traffic.

/There was •.•

Wednesday, March 29, 1972

- 35 -

There was no indication that the existing Taipo Road needed to be widened for some years but should the population at Shatin build up far more rapidly than expected the road could be widened if required, he added.

’’Plans exist for this although it will be appreciated that it will be an expensive and difficult task due to the general topography of the area.”

Plans also existed for a road link between Shatin and Tsuen Wan by way of a tunnel through the Shing Mun hills but the need for that should not arise until the early 1930*s, he said.

Double Tracking

Mr. Robson said the cost of double tracking the railway was about #20 million but that figure did not include a second railway tunnel from Kowloon or the provision of additional rolling stock to provide a more frequent service.

,;I would like to add that provision is being made in the planning layouts for the possibility of extending any future mass transit system to Shatin,” he added.

The plarming for Castle Peak followed the same pattern as Shatin but the most important consideration was to ensure that a new road link between Tsuen Wan and Castle Peak was available to traffic at the earliest possible date.

For that reason the P.W.D. recommended that the work be carried out in two stages — Stage I providing for a three-lane carriageway and Stage II for a further three lanes, he added.

/He explained

Wednesday, March 29, 1972

- 36 -

He explained that the construction of six-lanes in the first instance might achieve economies by virtue of being able to produce a balanced cut-and-fill design for the new road, the savings in cost would be more than offset by the loss due to capital outlay in advance of the road.

More important was the fact that any attempt to complete all the formation works at once would almost certainly delay the opening of the Stage I works to traffic, he added.

,fI should like to assure my Honourable friend, Mr. Browne that Phase I of Stage IV of the expansion of Kai Tak Airport Terminal Building will be upgraded to Category A of the Public Works Programme and work started as quickly as possible.11

Sketch plans or final details of all sections of this phase were nearing completion and specialist consultants would probably be appointed to advise on the Baggage Handling layout and equipment, he added.

-------0----------

/37........

Wednesday, Mar^jJ 291 1972

- 37 -

URBAN COUNCIL’S KEEP HONG KONG CLEA7' CAMPAIGN Plan For Large Scale Community Involvement *«***«»

The Director of Urban Services, the Hon. D.R.W. Alexander, said today a plan for large scale community involvement in the Urban Council’s Keep Hong Kong Clean Campaign is currently being considered.

He was replying at the resumed Budget debate in the Legislative Council to questions raised by the Hon. Oswald Cheung on March 16.

Matters such as staff recruitment and training, designing of new litter containers, scheduling of area clean-ups, and myriad minor details were all being pursued, he added.

:iBut the crux of the matter will not be solely the provision of funds for staff and equipment and a will on Government’s part to clean up Hong Kong.”

It rested firstly, on whether the local populace could be persuaded that the days of indiscriminate littering and refuse dumping were over.

He pointed out that this could be done in the long term by a continuation of education and persuasion but in the immediate term, on pain of prosecution with adequate penalties.

Secondly, he added, it was not a question of the Urban Services Department cleaning up the mess but one of the populace not creating it in the first place with his department enabling them not to do so by providing full and adequate services wherever required.

/On garbage ••••

Wednesday, March 29, 1972

- 38 -

On garbage and pollution of streams in the New Territories, Mr. Alexander said ’’the key to the situation, as I believe the Environmental Pollution Committee has already come to appreciate, is in public enlightenment coupled with determined enforcement of the law and land use policies and conditions.”

His department was responsible for the collection and disposal of garbage, and had been ever since the Nev; Territories Administration had shed sundry of its executive duties about I960 and had begun to give priority of attention to land policies and administration.

Rural Villages

Simple rural villages in undeveloped agricultural areas needed little or no rubbish collection but the change of the New Territories to an overpopulated, overgrown series of towns, cottage industrial estates and big farming businesses had been very rapid, he said.

nI am glad to say, however, that we are at last being provided with the resources needed to begin catching up, even though in many areas no rates are as yet paid.”

Mr. Alexander pointed out that there were about 1,000 distinguishable villages or small settlements in the New Territories, many of them inaccessible to vehicles.

’’This does not make collection and disposal of refuse any easier,” he added.

His department shifted nearly *>70 tons of refuse a day in the New Territories* he said.

/”! cannot ••••

Wednesday, March 29, 1972

- 39 -

nI cannot say hov; much is being dumped by selfish and unscrupulous farm and factory managers or thoughtless individuals into streams when nobody is looking, but wo are hoping for some interesting new information to emerge from the surveys we plan to set up this summer with the help of students dedicated to the war on pollution."

Mr. Alexander said his department also accepted the responsibility of clearing streams provided adequate resources were made available.

But, he said the practical task of cleaning 300 or more streams regularly was quite formidable, particularly at a time when unskilled labour in large numbers was not available.

Open Sewers

He explained that the majority of those streams had been converted into open sewers by the uncontrolled squatters who now infested most of the areas.

•‘Cleaning up alone will not put an end to the problem, as long as streams are still acting as entry points for all wastes from the activities of squatter structures, industries and whatnots along their banks."

A need existed for all existing streams to be dredged and trained and reverted to their original state, he stressed.

In their place, local sewerage systems and collection centres capable of dealing with all kinds of waste products, including refuse and nightsoil, should be provided.

"The pollution in the New Territories is horrible *— compared with the past, although, as far as I am aware, the general health of the rural population is so much better than it was," he said.

/His ability .....

Wednesday, March 29, 1972

- 40

His ability to clean up the mess was proportionate to the human and mechanical resources that he was able to acquire and to train and absorb into his establishment, he pointed out.

"But neither land for dumps nor additional money for staff, transport and equipment falls within my control. And even if they did, and I had all the staff and facilities I need, I still would not be able to succeed in my task unless I have the co-operation of the local population in understanding the problem and assisting me to overcome it.

"For it is they who have dumped their rubbish there — in many instances on private land," he stressed.

Cost Of Cleaning

Citing that the cost of cleaning up a short stretch of the Sutlej River near the Shcung Shui tanneries was about $700,000, Mr. Alexander said he expected the whole job to cost millions.

"How much it will cost and what precisely should be done to prevent the same thing happening again we still do not know,” he said.

On the problem of hawkers mentioned by the Hon. Ellen Li on March 15, Mr. Alexander said in a community as closely packed as Hong Kong, some curbs had to be put on individual freedom, if the safety and well-being of others were not to suffer.

"The Urban Council, while recognizing that, in certain areas, hawkers provide a very necessary service, also acknowledges the fact that their legitimate needs must be balanced against the needs of traffic and pedestrian circulation and of shops and residences," he said.

/"I hope,

Wednesday, March 29, 1972

- 41 -

”1 hope, in a very short while, to seek Members1 approval of an extensive revision of the Hawker By-laws designed to assist in the implementation of the revised policy, while, at the same time, offering greater protection for law-abiding hawkers,” he added.

Replying to questions raised by the Hon. Ellen Li and the Hon.

G.M.B. Salmon, Mr. Alexander said that recent progress in the development of active recreation facilities had been very satisfactory.

Over the last two years, the number of swimming pools had risen from two to five, with each of the three new complexes being considerably 1arger than the two old pools at Victoria Park and Kowloon Tsai put together, he added.

’•Two more are under construction at Kennedy Town and Morrison Hill,” he said.

Games Pitches

There were now 250 basketball pitches, compared with 200 two years ago, and 132 grass games pitches or hard surfaced mini-soccer pitches, an increase of 30 over the period.

The Colony had 79 volleyball courts and only last month six new tennis courts had been opened in Kowloon where the provision of squash courts were also being considered.

Revised sketch plans and estimates for the Indoor Stadium had recently been submitted, while the Architectural Office of the Public Works Department was actively working on sketch plans for the Ho Man Tin Football Stadium.

nIt is hoped that both stadia will be completed by 1976,” he said.

The Kowloon Civic Centre had just been included in the Public Works Programme as an Investigation Item so that an order of cost could be established with a view to approaching Finance Committee for approval, he added.

/He refuted .....

Wednesday, March 29, 1972

- 42 -

He refuted any suggestion that departments concerned with those projects were in no hurry to get them upgraded, particularly since the Urban Council and the Urban Services Department were undoubtedly the main instigators of such processing.

K0n the v/hole, I do not think there has been any undue delay without good reason in the processing of recreational and amenity projects, and it must be remembered that a large number of smaller recreational projects are being built from the Urban and New Territories block votes, without going through the Public Works Programme at all,” he said.

Pilot Scheme

Mr. Alexander said he shared Mr. Salmon’s hopes that it would be possible to build many more multi-purpose game-halls such as that being built at Kai Tak.

‘'This is, however, being regarded as a pilot scheme and those, who are perhaps a little too cautious, argue that we should see how the new hall wiH be used and what modifications will be thought to be desirable before we rush into a massive building proposal,” he said.

The same argument had been used in respect of study rooms the need for which and the supervision of which by comparatively junior staff had been proved beyond a doubt, he added.

"We have, therefore recently been given authority tp include study rooms in our schedule of accommodation for Aberdeen and To Kwa Wan Markets.”

-ith regard to the Hon. Ellen Li’s plea for more cultural activities for youth, Mr• Alexander said that during the past year, the Urban Council and the Urban Services Department had presented 177 performances of serious music, drama and dance — both Chinese and Western.

/He pointed ...

Wednesday, March 29, 1972

- 43 -

He pointed out that many of them had been joint performances, presented with willing and generous help from such organisations as the Goethe Institute, British Council, and Alliance Francaise, and various local groups.

The performances had been attended by about 148,000 people — the vast majority of them students, he added.

::The Urban Council will continue to present such programme charging a mere 31 a ticket for studentst and in July and August of this year will organise a Hong Kong Arts Festival to celebrate the 10th Anniversary of the City Hall."

Performing Arts

The programme would embrace all branches of the performing arts, as well as several art and photographic exhibitions and would bo aimed primarily at young people and for this reason, the summer school vacation period of July and August had been chosen for the Festival, he said.

In addition, the City Museum and Art Gallery had presented ten exhibitions covering a wide range of subjects including Chinese antiquities, Chinese paintings and calligraphy, archaeology in Hong Kong, coins and currency of Kwangtung, Macau and Hong Kong, and children’s art.

"These exhibitions were attended by over 175,000 people including a large number of students in organised school visits," he said.

The Urban Council’s libraries were jammed mainly by teenagers and the Council believed that additional libraries should now be built.

/The department....

Wednesday, March 29, 1972

- 44 -

Tne department was also, with the assistance of the New Territories Administration and the Social Welfare Department, looking into the existing and anticipated needs of the New Territories for library facilities, he added.

On the formation of a Council for Physical Recreation, he said that the Recreation and Amenities Select Committee of the Urban Council had studied in some depth the feasibility of creating a Physical Recreation Unit, with a controlling or advisory council or committee, to promote the greater and better use of existing public recreational facilities.

“The Select Committee agreed on its recommendations only last month, and I am now about to put these to Government," he said.

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/45........

Wednesday, March 29, 1972

- 45 -

MODERNISATION OF OLDER TYPE SETTLEMENT ESTATES

Estimated To Cost 3700 Million At Today’s Prices

*«««»*««

The Commissioner for Resettlement, the Hon. I.M. Lightbody, said today that preliminary proposals had been drawn up for modernising the older type estates at a cost of about 3700 million at today’s prices.

The 3700 million figure included the cost of building the necessary nevz reception estates to allow the old ones to be vacated, he added*

He was speaking in the Legislative Council when the debate on the Budget was resumed.

Mr. Lightbody said a start would be made on the Shek Kip Mei Estate which now housed 60,000 people.

The Public Works Department had prepared a scheme for modernising that estate, converting most of the old blocks with their communal toilets and other communal facilities into self-contained flats, and demolishing other blocks to make way for markets as well as multi-storeyed shopping and commercial complexes.

”What we do in Shek Kip Mei will set a pattern for the clearance of other old estates and we must find the right answers at the outset.”

He pointed out that the clearance of Shek Kip Mei would be simply the first of many such major upheavals in future and it was essential that it should be a success.

/’’But to

Wednesday, March 29, 1972

- 46 -

"But to make it a success, given that its tenants have been established there for up to 17 years, requires patient and time-consuming study of all human implications of the move,” Mr. Lightbody stressed.

Above all, he added, a repetition of the impersonal transfers of huge numbers of people from one area to another that characterized the early years of the resettlement programme had to be avoided.

A new organisation would have to be created within the Resettlement Department with the capacity to tackle such a "gigantic task” if that ’’laudable programme” was to be pursued, he said.

Exciting New Venture

"It is an exciting new venture that we have set ourselves and

I have therefore sought the creation, by supplementary provision, of a new Planning and Research Division in my department to supervise it,” he added.

Some 250 blocks in the old Mark I and Mark II estates built between 1954 and 1961 were definitely not satisfactory public housing for the 1970s.

’’Honourable Members may be assured that I am no less anxious than they to press on with this process, and to see the early demise of the old estates that served us well in the early years of Government housing but which now fall so short of today’s needs.”

Mr. Lightbody said that efforts over past years to put the needy into simple but secure homes had been prodigious by any standards, but even so, there was complete agreement on all sides that more had to be done and done better.

/"Many

Wednesday, March 29, 1972

- 47 -

,rMany people are ready to pay higher rents for better public housing and our plans for future public housing must also grow imaginatively to match the rising expectations of the public; we must build for future generations living more spaciously than people do in our estates today,” he said

The Housing Board, he said, had recently reviewed the building programme and had recommended that whilst the Census data was being studied, the programme should be enlarged by 25 per cent to ensure that the existing approved target, at least, be achieved.

”If this 25 per cent safety margin is approved, the target will increase from 700,OCX) to 875,000 adult spaces in the six-year period 1970 to 1976,” he added.

Substantial Rise

The recommended increase represented a substantial raising of ”our sights” over the previous programme period, he said.

”But even this will not be enough if we are to change the old estates from the slums we are ashamed of into the kind of urban environment the people of Hong Kong want — an environment fit for their children to grow up in.”

i.r. Lightbody said a new flexibility was appearing in the use of the terms ”resettlement” and ”low-cost housing” to meet the obvious logic of combining in one eligibility list the present Waiting List for low-cost housing and the various categories of persons eligible for accommodation in resettlement estates by force of circumstances.

/Estates .....

Wednesday, March 29, 1972

* - 48 -

Estates now being designed would be built to a common higher standard which all those in need of housing would enjoy, he added.

''There will soon be no ’second class’ housing provided by the Government,” he stressed.

On the clearance of squatters, he said it was true that present policies allowed for rehousing of squatters only where Government required the land, except that 5,000 adult spaces a year were earmarked for the clearance of particularly unpleasant areas.

184,000 Resettled

However, he pointed out, since 1964 a total of 184,000 people had been resettled from squatter or similar accommodation even though the land had not been required for development.

Of this, 160,000 were occupants of licensed areas and the remaining 24,000 squatters were victims of fire or typhoon damage.

The figure of 184,000 compared with 277,000 persons cleared from squatter areas for development showed a very significant measure of help for the under-privileged, he said.

’’Nonetheless, I fear that the sight of the squatter in his shack will be troubling our social consciences for many years to come, and I hope that it will be possible to expand our building programme to allow a more positive approach to the needs of our still too large squatter community,” he said.

-----0------

/49........

Wednesday, March 29, 1972

- 49 -

LOANS TO SMALL INDUSTRIES SCHEME SOON POSSIBLE Applications May Be Invited As Early As July *«***«•

The Director of Commerce and Industry, the Hon. E.I. Lee, said today that every effort was being made to ensure that the Loans to Small Industries Scheme was introduced as soon as possible.

He was replying at the resumed Budget debate in the Legislative Council to questions raised by Unofficial Members on March 15 and 16.

’’Although, as I have said, its operation will involve other organisations besides my own department, with the consequent need for a close liaison between them, I shall be personally disappointed if we are not in a position to invite applications before the end of June.’1

Mr. Lee stressed that the scheme was experimental in nature and was designed to extend over a period of three years or until such time as the total financial commitment had been reached.

’’There is provision for a review after eighteen months and if, by then, the scheme has proved its worth and if a higher level of lending appears justified, I believe there would be a quick response from Government to any proposal for an upward revision of its commitment,” he said.

He said he was as anxious as the Hon. K.S. Lo to avoid delay in considering applications and the arrangements now being made to administer the scheme were designed specifically to ensure that decisions were quickly reached.

/He explained ......

Wednesday, March 29, 1972

- 50 -

He explained that processing a loan application would involve consideration by a commercial bank, the Productivity Centre, and by his own department but, despite that he was hopeful that decisions would be reached within two or three weeks.

On the Hon. T.K. Ann’s suggestion that an appraisal should be made of Hong Kong’s manufacturing industry in an attempt to assess its potential in various spheres, Hr. Lee said he shared Mr. Ann’s concern to equip manufacturers with the services their industries required and with the facts which entrepreneurs had to have if they were to continue to make profitable decisions.

Complex Proposal

“But the proposal is a complex one and has implications which I should like to reflect upon before suggesting ways in which it might best be met and before recommending the extent to which Government could and should take part.”

The Hong Kong Productivity Centre and the Trade Development Council existed to serve the manufacturer and Mr. Ann was familiar with the research carried out in the department of Commerce and Industry into a series of selected industries, he said.

”1 intend first to consult the other agencies involved in the promotion of Hong Kong’s industry and trade in the hope that some agreement may be reached on priorities for research into the needs of industry and on the most effective means of carrying it out,” he added.

/On the .....

Wednesday, March 29, 1972

- 51 -

On the question of having "our own man" in Tokyo, Mr. Lee said that the Trade Development Council had, of course, been represented in Tokyo since November 1970, when an office had been opened in recognition of the growing significance of Japan as an export market.

"As far as Government representation is concerned, we have also considered this but feel that, for the present, the volume of commercial policy work is not sufficient to justify a full time presence, and we are well looked after by Her Majesty’s Ambassador and his staff," he said.

He pointed out that Tokyo was only three hours away and, in the past year, senior staff of his department had made several visits there to deal with specific points in conjunction with the British Embassy.

"It is our intention to maintain and strengthen these contacts," he stressed.

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Wednesday, March 29, 1972

- 52 -

TWO FURTHER TECHNICAL INSTITUTES PLANNED FOR COMPLETION IN 1975 Director Of Education Says Review Of Need For

More Institutes Being Carried Out

*******

Active planning is proceeding on the two further technical institutes and it is now anticipated that it will be possible to complete both projects by the beginning of the academic year 1975 and not one in 1975 and one in 1976 as originally envisaged, the Director of Education, the Hon. J. Canning told Legislative Council today.

HI am investigating ways and means to start the operation of these institutes in other buildings before the new buildings are completed and if this should prove feasible I will submit recommendations through the usual channels/5 Mr. Canning said.

He was replying at the resumed Budget debate to queries raised by Unofficial Members.

Mr. Canning pointed out that a review of the need for further technical institutes was currently in hand. The target date for the completion of this review, which was ordered by the Governor, is August 1972.

He emphasised that technical institutes, which have a capital cost of the order of 'J14 million each, required very detailed planning to get them right.

Clarifying a misunderstanding, Mr. Canning said that officers of his department had relied very heavily on the information and recommendations put forward by the Industrial Training Advisory Committee in promoting new courses in both the Morrison Hill Technical Institute and the Technical College.

/A report .....

Wednesday, March 29, 1972

- 53 -

A report by the Committee emphasised that the responsibility for the training of skilled manpower was divided between Industry on the one hand, to provide the practical training and Government on the other hand to provide the related technical education.

The Committee recommended that the best means of carrying out this principle was by means of part-time day—release courses whereby young people who were being trained by means of apprenticeship in industry were released for one day a week to attend a technical institute for their related technical education.

Technical Institutes

Mr. Canning said that for this reason, courses at the Morrison Hill Technical Institute and the courses in the two now technical institutes at present under planning were based as far as possible on the principle of part-time day-release.

’’This division of responsibility for technical training is fully accepted by the Industrial Training Advisory Committee in its final report.

’'It is essential, therefore, that the provision of technical institutes snould attempt to keep in phase with the numbers of places provided in properly organised apprenticeship schemes within industry and the rate at which industry will be providing apprentice training opportunities will, no doubt, have some bearing on the assessment of the need for additional technical institutes,” Mr. Canning said.

He announced that plans were under consideration for the expansion of the Morrison Hill Technical Institute by the addition of some 6,000 square feet of workshop area and constant review of courses were taking place to provide the best possible use of the facilities available.

/But in .....

Wednesday, March 29, 1972

- 54 -

But in one industrial field - printing - proposed training schemes might be held up because the Technical.Institute could not provide courses for those who would be receiving industrial training.

Hr. Canning said that highly specialised printing workshops, which were required, were not available at Morrison Hill although consideration was being given to include such facilities in one of the two institutes being planned at present.

Referring to expenditure on technical education, Mr. Canning said that the two further technical institutes would require a capital expenditure of the order of $26 to $28 million. "When all three technical institutes arc operational the recurrent costs will be of the order of $15 million per annum."

Pre-vocational Schools

Mr. Canning said that the expansion of pre-vocational schools had a planned capital expenditure of the order of $17 million. Ihen the planned projects were completed the recurrent costs of these schools would be of the order of $5 million a year.

The Director gave an assurance that everything was being done "to expedite the realisation of our aims" on the plans for three years of post-primary education for all who seek it.

On the shortage of secondary schools in the Nev/ Territories, Mr. Canning said that private secondary school operators tended to concentrate their activities in the urban areas and he could not hold out any real hope that any significantly large numbers of places would bo provided from that source in the near future.

/However,

Wednesday, Karch 29, 1972

-55-

However, he emphasised that the New Territories were not being neglected by Government. "Thore are at this time of speaking 18 secondary government and aided schools in an advanced stage of planning for the New Territories; work will commence at a new government secondary school at Sha Tin in April of this year and one of the two new technical institutes is to be located in the New Territories.

"Thus there is a total of 20 projects to cater for post-primary education needs in the New Territories. It is, therefore, expected that by 1976, there will be in the New Territories a provision of post-primary places for 18.2 per cent of 12-16 years age group; that is to say within the aim set for Hong Kong as a whole," Mr. Canning said.

Assisted Places

He also pointed out that the New Territories had not been neglected with regard to the scheme to provide by 1976 three-year assisted places for 50 per cent of the 12-14 ago group.

A start has been made with the buying of places; more will be purchased in 1972, and plans are being prepared for new schools offering a three-year course of education."

Mr. Canning gave an assurance that Government in its planning would continue to be mindful of the needs of the young people in the New Territories.

Clarifying one very important point, Mr. Canning said: "The present policy is to provide three years of aided post-primary education for all within the 12-14 years age group, and it is hoped to provide for 50 per cent of such people by 1976. No date for 100 per cent provision has been fixed.

/,fFor my • • • •

Wednesday, March 29, 1972

- 56 -

•Tor my part I would like to achieve 100 per cent provision as early as possible, but I really must emphasise that the expansion programme we have set ourselves in the post-primary field under existing approved policies is a tremendous one.15

Mr. Canning said that consideration would be given to a suggestion that public funds be made available to permit any child between the ages of 6 and 15 years to attend a school registered with the Education Department subject to it being established that the parents concerned would need such financial assistance and that there was no aided place available for the child.

Subsidized Special Schools

Turning to fees in subsidized special schools, Mr. Canning said: •’It is Government’s aim to provide a free primary education for all. Special schools have not yet been included in the present scheme, not because there is any doubt about the merit of extending free primary education to handicapped children, but because the financial arrangements in these schools differ considerably from ordinary primary schools.

"Proposals to increase the level of subsidies for special schools are now under consideration and I have recanmendcd that if they arc approved they should take effect from September 1, 1971." This means that the preposed new subsidies would be backdated if approved.

Mr. Canning said it was his view that handicapped children should be educated in ordinary schools provided that the degree of handicap was not severe and that special facilities and staff were made available.

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/ 57 ....

Wednesday, March 29, 1972

- 57 -

DEVELOPMENT OF POLYTECHNIC TO PROCEED AT "CRISP" RATE

Considerable Advances Made In Field Of Public Assistance

********

The Colonial Secretary, the Hon. Sir Hugh Norman-Walker, said today an item to provide an additional 25 lecture rooms as an extension to the existing Technical College had already been included in the Public Works Programme.

In addition, the expansion and reconstitution of the University Grants Committee into a Universities and Polytechnic Grants Committee was proposed, he added.

Speaking at the resumed Budget debate in the Legislative Council, the Colonial Secretary said that his task was to "glean behind his official col1eagnpR" without encroaching on the fields yet to be harvested by the Financial Secretary.

Continuing on the Polytechnic, he said: "Much remains to be done but I am hopeful that under the able leadership of My Honourable Friend, Dr. S.Y. Chung progress from now on will be at a crisp rate."

On the Public Assistance Scheme, he said he welcomed the interest in a scheme designed to help the least fortunate members of the community.

However, he had found it a little difficult to reconcile what had been said with the very considerable advances made in this field.

He pointed out that in December 1970, a single old person had been getting 333 a month but as from April 1 this year, that person would be getting $110 a month and a further 325 for rent as well as additions for special needs where appropriate.

/A family ........

Wednesday, March 29, 1972

- 58 -

A family of five who had been getting 3132 a month in December 1970 would be getting as from April 1 this year 3370 plus a higher amount of up to 368 for rent as well as additions for schooling expenses, essential travel and special needs, he added.

”0f course, Government is not now going to sit back and say that nothing more needs to be done for the elderly and the disabled or for other categories of people in need.”

Although the public assistance scheme had gone a long way in a short time, nevertheless, he did not think Hong Kong should be satisfied with what had been achieved so far though there was no comparable scheme in the region, with the exception of Japan, he added.

Look Ahead

He assured Members that Government accepted the need to look ahead and see what the future needs of the elderly would be.

’’For this reason, a working party including members of Government departments and of voluntary agencies concerned are already at work, and I look forward to seeing their proposals,” he said.

He reminded Members that the problems associated with geriatrics were worldwide, and that no nation had yet found a satisfactory and all-embracing solution.

’’Nevertheless we are, a young community and this is a challenge that we are perhaps in a better position to meet than most administrations.”

/Referring .......

Wednesday, March 29, 1972

- 59 -

Referring to the Hon. P.C. Woo’s request that the pay of members of the Auxiliary Defence Forces be suitably increased, the Colonial Secretary said he was glad to announce that, subject to the approval of the Finance Committee, increases would soon be made.

He also welcomed and endorsed the point made by the Hon. Ellen Li that there was a need for greater public co-operation with the Police, to make law enforcement more effective.

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/6o

Wednesday, March 29, 1972

- 60 -

PROPOSED CHARGE ON UNOCCUPIED PREMISES Financial Secretary Accepts Caso For Initial Free Period *********

The Financial Secretary, the Hon. C.P. Haddon-Cave gave an assurance today that points raised by the Unofficial Members on the proposed charge on unoccupied premises would be given careful consideration.

Three Unofficial Members - the Hon. Mrs. Ellen Li, the Hon. Q.W. Lee and the Hon. P.O. Woo - had made several points relating to the implementation of the proposed charge.

Speaking at the resumed Budget Debate in the Legislative Council, Mr. Haddon-Cave said: "Their points will bo given careful consideration when the necessary amending legislation is being drafted later this year.

,fIt will suffice to say now that I accept the case for an initial free period following the issue of an occupation permit."

On Mr. P.C. Woo’s suggestion that the funeral expenses allowed as a deduction before determining the value of a dutiable estate should be increased to take account of present day costs, the Financial Secretary said: it was an accepted principle that reasonable funeral expenses should be allowed ,but he proposed to increase the allowance from 32,000 to 85,000 instead of the 34,000, suggested.

The Financial Secretary, however, did not agree with the Unofficial Members’ view that the proposal to abolish duty on heavy oils be extended to cover oils consumed by the power companies on the principle that the indirect tax system should not inflate costs.

/Mr. Haddon-Cave

Wednesday, March 29, 1972

- 61 -

Mr. iiaddon-Cavc said: ’’Apart from certain technical difficulties relating to the passing on of relief to consumers, I did not feel justified in extending this measure of reform to them in view of the cost involved (approximately 337 million); and the difference in cost between cooking by electricity and even town gas, on the one hand, and by kerosene and liquefied petroleum gas on the other is already such that the competitive position of the electricity and gas companies will not be worsened."

-----0-----

/62

Wednesday, March 29, 1972

- 62 -

HONG KONG PRESSING FOR EARLY FORMAL CONSULTATIONS

With Britain On Exports Of Cotton Textiles

**********

The Hong Kong Government is now pressing the British Government

for early formal consultations on the post-1972 arrangements for exports

of cotton textiles to the United Kingdom.

The Financial Secretary, the Hon. C.P. Haddon-Cave, stated this

today in the Legislative Council at the resumed Budget Debate.

”We had hoped to be able to press Her Majesty’s Government for an improvement of their offer to us in respect of transfers from fabrics to garment quotas,” he said.

On transfers, H.M.G.*s response had been that an improvement could be offered only upon certain conditions, which had been unacceptable to Hong Kong, he added.

”Nor were we successful in our bid for hardship yardage, but then neither was any other supplier.”

After consulting the Textiles Advisory Board and taking all aspects of the situation into consideration the following decision was taken:-

* Continue to limit exports in 1972 on the same basis as in recent years;

* Reserve Hong Kong's position on the question of compensation; and

* Abandon negotiations for compensation for 1972 provided formal consultations were started soon on the arrangements to be introduced in 1973 consequent on Britain's entry into the E.E.C.

/Earlier,

Wednesday, March 29, 1972

- 63 -

Earlier, the Financial Secretary had said that he was grateful to his Honourable Friend Mr. Salmon for mentioning the question of the renewal of quota controls over Hong Kong’s exports of cotton textiles to the United Kingdom, for the conditions under which Hong Kong had to conduct its trade was of the utmost importance.

He recalled that when reporting the results of trade talks with Her Majesty’s Government in London in January, he indicated that, at the end of the talks, a position had been reached where both sides had been moving towards a measure of agreement.

"But from Hong Kong’s point of view, not sufficiently so to meet our objectives.”

”1 said then that we had remained in correspondence with Her Majesty’s Government subsequent to my return from London,” he said.

/64.........

Wednesday, March 29, 1972

- 64 -

AMENDMENTS TO LABOUR TRIBUNAL BILL PROPOSED

"Valuable Suggestions For Its Improvement"

Says Attorney General

The Attorney General, the Hon. D.T.E. Roberts, today proposed a number of amendments to the Labour Tribunal Bill to include in it "valuable suggestions for its improvement."

He was speaking during the committee stage of the Bill in the Legislative Council.

Mr. Roberts thanked the Unofficial Members for their valuable suggestions and said that comments and suggestions from various employers’ association had also been received and taken fully into account.

"The Bill has also aroused interest among workers and criticism and comment has been voiced by groups and representatives of workers," he said.

"Some of these show a misunderstanding of the scope and purpose of various parts of the Bill."

Mr. Roberts said a Chinese version of the Bill had been prepared by the Secretariat for Home Affairs, but had not been published because it was thought advisable to wait until it was possible to insert in it such amendments as might be made today.

In moving that Clause 9 be amended, the Attorney General said the object was "to make it clear that proceedings can be brought either in the Supreme Court or the District Court, as may be appropriate, after the six months’ period during which actions within the jurisdiction of the Labour Tribunal must be brought before the Tribunal."

/Mr. Roberts........

Wednesday, March 29, 1972

- 65 -

Mr. Roberts reminded the public that the Tribunal would have no power to deal with, or interfere in, industrial disputes, strikes, look-outs or negotiations between employers and groups of workers or trade unions.

It would deal with claims by individual workers against their employers for money or other benefits due either under the contract of employment or the Employment Ordinance.

He said a claim based on the appropriate provision of the Employment Ordinance might also be dealt with by the Tribunal, if the worker’s contract did not Already provide for something at least as good as that which the Ordinance obliged the employer to provide.

Maximum Period

In moving that Clause 15 be amended, the Attorney General said this was to meet Dr. the Hon. S.Y. Chung’s suggestion that there should be a maximum period within which the date for the hearing of a claim must be fixed, in order to ensure that claims were dealt with speedily.

He emphasised that ’’the bill is meant to provide a quick method of settling claims. If the process is slow, the Bill will not achieve its purpose,”

In moving that Clause 15 be amended, Mr. Roberts said the first amendment would oblige the conciliation certificate required under Clause 15(1) to be produced to the Tribunal at least 24 hours before the date fixed for the hearing of the claim.

This, he said, again was intended to ensure that no avoidable delay occurred in dealing with a claim.

/This Bill

Wednesday, March 29♦ 1972

- 66 -

f,This Bill will not replace the conciliation machinery of the Labour Department which will continue to play as important a part in the settlement of disputes between employers and workers as it does now,” he added.

Referring to the second amendment, the Attorney General said the only substantial difference was that the Commissioner might only adjourn a hearing if all parties to the claim had agreed to the adjournment for the purpose of conciliation.

Moving another amendment to the Bill, the Attorney General said there was some objection to the previous provision for penal costs to be awarded against a claimant. It was thought that this should be removed as it might constitute a deterrent even to those with legitimate claims to pursue.

Adequate Powers

Mr. Roberts said that the present Bill "does not confer adequate powers on the Tribunal to deal with insulting behaviour, failure to comply with orders to appear before the Tribunal or to produce documents or with a refused, to comply with lawful requests by the tribunal officers or with wilful obstruction of them." He proposed that three new clauses dealing with these matters be inserted into the Bill.

Referring to Clause 41 which makes it an offence to induce a witness or party not to give evidence in a hearing before the Tribunal, the Attorney General said: '^This clause seeks to ensure that a party to a claim and a witness shall be protected against pressure.”

"The clause is not intended to prevent a trade union from assisting a worker in his dealings with his employers, so long as this activity does not amount to an attempt to prevent a party or witness giving evidence to the Tribunal."

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/67........

Wednesday, March 29, 1972

- 67 -

TYPE OF MANPOWER REQUIRED BY GOVERNMENT SHORT IN SUPPLY Outbid By Private Organisations In Both Salaries And Fringe Benefits «*****««

The Colonial Secretary said today that many of the qualities, qualifications and types of experience required by the Government was short in supply both locally and overseas.

He was replying in the Legislative Council to questions on the large number of vacancies in the Public Service raised by the Hon. Wilson Wang on March 16.

”In consequence, outside organisations are often prepared to outbid the Government in both salaries and fringe benefits,” he added.

He welcomed Mr. Wang’s suggestions for improvement in the recruitment and training methods, but would not have him think that the present methods of ’’fishing" were comparable to those of "old man Keung", who used neither hook nor bait.

"We do not, as my Honourable Friend seems to imply, rely solely on advertisements•"

But unless the work was rewarding, the prospects good, and salaries and conditions of service in line with the going rate, then the fish "would not bite," he said.

He pointed out to Members that the Government made energetic and continuous attempts to encourage local candidates to join the Civil Service.

Talks were given at the Universities at regular intervals and in the schools; the Government took an active part in Careers Weeks and Workshops organised by both Universities; lectures were given by senior officers whenever possible, he added.

/More than

Wednesday, March 29, 1972

- 68 -

He said more than 200 officers were already away at this moment on courses lasting between three months and three years, and another 215 going in the coming financial year.

He shared the concern expressed on recruitment within the Police Force, but before he committed himself to a course of action on this, he would like a chance to examine the result of the recent improvement in police pay scale.

He said the many comments made by Honourable Members revealed an interesting conflict of views.

Public Service

M0n the one hand it is argued that the public service is too expensive, and that the Salaries Commission and its predecessors have resulted in costs that are disproportionately high for our means.

”0n the other hand it was also said, and rightly, that our vacancy position is serious, and that the modest increase of 4.3# in staff establishment this year is too little in the light of a record increase in Government expenditure,” he said.

The hard facts were that the Public Service was understaffed, most particularly where skill and experience counted, and particularly understaffed, to decide on and implement Government policies, he said.

He pointed out that the size of the Public Service was now of the order of one hundred thousand people, or would be if they were all in position.

/This, however, .......

Wednesday, March 29, 1972

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’’This, however, is misleading, for we count as public servants scores of thousands of people who in other administrations are differently labelled. For instance, railwaymen would be the Judiciary.

”No, Sir, I am worried about the size of the Civil Service, but I am not worried that it is too large. I am worried it is too small,” he stressed.

Relative to the size of the Service the professional, administrative and executive groups formed a tiny proportion, almost at three per cent.

To man the complex and sophisticated services now required by the public of Hong Kong, this seemed to him inadequate, he added.

’’The Government’s objectives are not achieved as fast and effectively as we would like because the resources that we do have are overstrained,” he said.

He stressed that the recruitment of good material and the retention of experience was of paramount importance.

’’The price may be high but this must be given increasing priority if all that we aim to do and all that the Senior Unofficial Members indicated that we should do,is to be achieved,” he said.

’’While much public attention has been focussed on the salary changes rnsulting from the activities of the Salaries Commission, these are merely a by-product of the principal recommendations cf 4 ’ e Commission which in fact amounted to a fundamental reform of the Government salary structure and which I may say have gone largely unremarked,” he said.

/The Salaries .......

Wednesday, March 29, 1972

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The Salaries Commission had done Hong Kong a good service in creating comparatively painlessly a much more flexible salary structure than the previous model scale system.

Judicious use of these new scales backed by thorough analysis and surveys from the Pay Investigation Unit would enable Government to respond more quickly to the changing patterns of recruitment in the market.

Recruitment had become much more difficult recently in some areas, particularly the professional and disciplined groups, where our salaries ”no longer held any competitive edge,” he said.

He said comment had been made on the length of our recruitment processes.

"These processes are efficient and thorough, but I do agree that they possibly are geared to more leisurely days when recruiting was easier and when a far less complex Public Service had to be manned.

"I have therefore instructed the Establishment Secretary to undertake a study of these procedures, with the object of reducing or streamlining them where this can be done without detriment to the public interest or loss of quality," he said.

The question on the age of retirement from the Public Service which the Hon. Wilfred Wong raised, was under discussion with the Associations, and he thought, it would be a breach of the spirit of the agreement on the •onsultative machinery publicly to state his own views, he said.

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REVISION OF LAND POLICY IN NEW TERRITORIES

Measures Being Formulated In Detail

«*******

The District Commissioner for the New Territories, the Hon. D.C. Bray, said today that separate measures are being formulated in detail to revise Government’s land policy in the New Territories.

The measures relate to rules and procedures for building small houses; to the amount of compensation paid on resumption of agricultural land for public purposes; to the question of re-entry of land for breach of lease conditions; and to restrictions on development in layout areas where plans for development exist but where no development work is proceeding.

Mr. Bray was speaking in the Legislative Council when debate on the Budget was resumed.

He explained that the Heung Yee Kuk last summer had raised four points of land policy which had been under discussion during recent months.

”1 must say I found our own rules and procedures on the building of small houses were still rather restrictive,” he said.

Two sorts of control were involved; the first being controls on siting and location and the second being plans of the buildings themselves, he explained.

The controls on siting involved some sort of crude planning, which was very difficult if you were trying to do it without accompanying the planning with infrastructure works, he added.

/He said ••••••••

Wednesday, March 29, 1972

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He said it was not easy to be sure that if a building was allowed it would never be in the way of anything and therefore, it was tempting to allow a ’’temporary’1 building and villagers had found that it was easier to get Government to approve temporary buildings than permanent ones — just as Government found it easier to get supernumerary staff than permanent staff to deal with new work.

"I came to the conclusion that while approval of temporary structures might satisfy some deep felt bureaucratic need to avoid taking a decision, it did not give the same satisfaction to villagers’ equally deeply felt need for a home to call his own.

”1 have therefore been working since last summer on a package of measures designed to allow small buildings to be as permanent as land title can make them in places where they are allowed at all, to simplify the procedures and remove unnecessary restrictions on the construction of the buildings themselves but to require rigid compliance with the few essential requirements, mainly of a health and safety nature,” Mr. Bray said.

On the matter of resumptions, he believed the answers might be found in a more general use of deferred exchanges outside layout areas or very much greater cash payments than the market normally makes.

’’Exchange entitlements for land surrendered in a layout area are well liked by New Territories land owners though few townsmen have ever heard of a Letter B”, he said.

The Kuk had suggested the same principles be used for land surrendered outside a layout area and these proposals were being examined sympathetically.

/On re-entry, .........

Wednesday, March 29, 1972

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On re-entry, Mr. Bray believed there was not much difference of opinion between himself and the Kuk.

Re-entry was a serious step, seldom taken and only for good cause and there was also ample provisions for appeal, he explained.

He pointed out that the question of development in layout areas during the time between the drawing up of a plan and its implementation was more difficult in theory than in practice.

"If the Kuk is really only concerned with small house development, as it says it is, we should be able to find a way out by making provision for village expansion without wrecking major layout plans.

”If we cannot we should consider their proposal to re-site such an owner outside the layout,” he said.

The trouble with schemes designed for small scale development was that they could be abused, he said.

"They just will not work for large scale development yet land owners are past masters at getting through policy loopholes and we have to try not to leave too many,” he added.

On more amenities for people living in the New Territories, he said that everyone in his department would very much like to see more low cost housing, more schools, more clinics, better water supplies and roads and more clean beautiful country there.

In the field of housing his department had been among the first to exploit the hints of the change in policy emerging from the 1970 Housing Board Report.

/This report .......

Wednesday, March 29, 1972

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This report recommended that when people were found living in really appalling conditions the people should be given new homes and the squalor cleared — cleared simply because it was squalor and not because the land was wanted for development, he said.

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FIVE BILLS RECEIVE THIRD READING AND PASSED

At Today’s Legislative Council Meeting

**•«**$

Five bills received their third reading and were passed by the Legislative Council this afternoon.

They were the Appropriation Bill 1972; the Merchandise Marks (Amendment) Bill 1972; the Offences against the Person (Amendment) Bill 1972, the Labour Tribunal Bill 1972; and the Telecommunication (Amendment) Bill 1972.

Two other Bills - the Drug Addicts Treatment and Rehabilitation (Amendment) Bill 1972 and the Oaths and Declarations Bill 1972 were introduced and read for the first and second time.

In addition, the Criminal Procedure (Amendment) Bill 1972 and Appropriation Bill 1972 received their second reading when debate on them was resumed.

The Report of the Finance Committee on the Draft Estimates of Revenue and Expenditure for 1972-75 and eight papers on subsidiary legislation were tabled.

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RECORDINGS AVAILABLE

*******

Note to Editors: The proceedings in today’s Legislative

Council meeting have been recorded. You are welcome to consult the tapes at the Press Room, Government Information Services.

/76........

Wednesday, March 29, 1972

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OPENING OF IRENE HOUSE ANNEXE Achievements Of Mental Health Association Of Hong Kong ****** *

Mr. Thomas C.Y. Lee, Deputy Director of Social Welfare, today opened an annexe to the Irene House maintained by the Mental Health Association of Hong Kong for discharged mental patients in the Wong Tai Sin Resettlement Estate.

A total of 17.5 discharged patients from the Castle Peak Hospital had taken up temporary residence in Irene House. They had either had no home to return to, or were unable to go back to their domiciles because of physical or emotional problems.

Mr. Lee said the House, a half-way house first pioneered by Dr. Irene Cheng, an educator and an ardent mental-health worker, had been instrumental in seeing 124 former patients through the last leg of their rehabili tati on•

Without the House — now enlarged with an annexe — he felt it would have been "open to doubt if some of these mental patients could have been discharged at all, even though they might be certified fit for discharge."

Mr. Lee told an audience of social workers and community leaders that the period of stay in Irene House was an average of three months. Some patients were able to find employment after a few weeks, others took longer. Still others came on week-end parole from the hospital to have their suitability for discharge tested.

/He commended...

Wednesday, March 29, 1972

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He commended the Association’s increasing concern for ”a small hard-core group of residents” who were less active than their colleagues as a result of the ” re si dual, indelible mark the illness had stamped on them.” They required a much longer recuperation period to adjust to full community life, and even then still needed some degree of supervision.

Mr. Lee referred to the Association’s hosting of the 24th Annual Meeting of the World Federation for Mental Health in Hong Kong last November as "the most important single occasion” for the effective placing of Hong Kong on the world mental-health map.

Before this success, the Association had organised the First Mental Health Week in 1970, and it had been the prime mover of the South East Asian Seminar on Education for Mental Health two years earlier.

But these were merely ’’isolated instances” of the Association's efforts in calling the community’s attention to the real problem of mental rehabilitation, which had yet to be accorded the importance it deserved.

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Wednesday, Karch 29, 1972

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U.S.D. SCHOOLS SCHOLARSHIP FUND Presentation Ceremony

A ceremony to present scholarships to 107 children of Urban Services Department staff will be held tomorrow (Thursday) at 4.00 p.m. at the Chi Kit School at the junction of Sai Yee Street and Soy Street, Mong Kok, Kowloon.

Mr. A.P. Richardson, Deputy Director of Urban Services and Chairman of the U.S.D. Schools Scholarship Fund Management Committee, will address the gathering in Cantonese and Mrs. Richardson will hand out the scholarships.

The U.S.D. Schools Scholarship Fund, which started with only 34,000 donated by the staff of the Department, has now accumulated to more than >60,000. The present assets of the Fund have accrued mainly from raffles, variety shows, film shows and investments.

Note to Editors: You are welcome to have the event covered.

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Wednesday, March 29, 1972

79

WONG TAI SIM DISTRICT COMMITTEE ON WELFARE SERVICES FOR THE AGED


Note to Editors: Miss Annie Chan, Assistant Director (Social Work)

of Social Welfare, will tomorrow, Thursday, March 30, inaugurate the new Wong Tai Sin District Committee on Welfare Services For The Aged at a ceremony at 5.J0 p.m. in the Social Welfare Department’s Wong Tai Sin Community Centre. The committee was set up this February as a result of surveys, seminars, discussions and meetings lasting two years. It is composed of various organisations interested in promoting services for the aged, and is aimed at educating the public towards showing more concern for the elderly. Agencies represented on the committee include Kaifong associations, the churches, the City District Office, the District Scout Association, hospitals, infirmaries, and homes for the aged. A dinner for 230 elderly residents will follow the inauguration ceremony. You are invited to have both occasions covered.

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5

Wednesday, March 29» 1972

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LABOUR DISPUTE AT A KOWLOON TEXTILE FACTORY SETTLED Agreement Signed Between Management And Workers ***«»**«

A two-week dispute over wage increase and the date of payment of long-service bonus to workers at a Kowloon textile factory has been settled•

An agreement was signed on March 27 by the management of the Lea Tai Textile Company Ltd. and the representatives of over 400 workers on the day shift of its weaving department.

The settlement was reached as a result of four joint meetings conducted by officers of the Labour Relations Service at the Tsuen Wan branch office of the Labour Department.

Under the agreement, the workers will have a wage rise with effect from April 1 this year. They will also receive their long-service bonus in June this year.

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POST OFFICE ANNOUNCES Holiday Postal Arrangements *******

The Post Office today announced postal arrangements for the forthcoming holidays.

On Good Friday (March 31) and Wednesday (April 5), no mail deliveries will be carried out nor will there be any offices open for business.

On Saturday (April 1) and Easter Monday (April 3), there will be one delivery of correspondence and counter facilities will be available at the following offices from 9*00 a.m. to 12 noon:-

General Post Office, Kowloon Central Post Office, Tsim Sha Tsui Post Office, Aberdeen Post Office, Hennessy Road Post Office, King’s Road Post Office, North Point Post Office, Sai Ying Pun Post Office, Shau Kei Wan Post Office, Sheung Wan Post Office, Wan Chai Post Office, Cheung Chau Post Office, Mui Wo Post Office, Peng Chau Post Office, Tai 0 Post Office, Cheung Sha Wan Post Office, Kowloon City Post Office, Kwun Tong Post Office, Mong Kok Post Office, Sham Shui Po Post Office, Kam Tin Post Office, San Tin Post Office, Sha Tau Kok Post Office, Sha Tin Post Office, Shek Wu Hui Post Office, Tai Po Post Office, Tuen Mun San Hui Post Office, Tsuen Wan Post Office, Yuen Long Post Office.

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Wednesday, March 29, 1972

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CLEAR WATER BAY ROAD Restriction On Use By Goods Vehicles ********

The Transport Department has announced that the restriction, which was imposed on goods vehicles using Clear Water Bay Road on Sundays and Public Holidays year, will be imposed again this summer.

The restriction will begin from April 1, until October J1.

During these months, between 9 a.m. and noon on each Sunday and Public Holiday,all goods vehicles travelling in an easterly (uphill) direction will be prohibited from using Clear Water Bay Road from its junction with Lung Cheung Road (Ping Shek Estate) to its junction with Fei Ngo Shan Road, unless authorised in writing by the Commissioner for Transport.

Owners of goods vehicles wishing to enter the restricted section of Clear Water Bay Road during the restricted hours are advised to apply in writing to the Transport Department for permission.

This restriction is intended to reduce the congestion caused by slow-moving vehicles to the traffic flow on this section of road during the summer months.

Traffic signs will be erected to guide motorists.

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Wednesday, March 29, 1972

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DISTRICT COMMISSIONER, N.T.,

To Hold Press Conference

Note to Editors: The District Commissioner, New Territories,

the Hon. D.C. Bray, will hold a press conference tomorrow (Thursday) on low-cost housing estates in the rural New Territories.

Also present will be Mr. E.G. Pryor, Senior Planning Officer, New Territories, and Mr. C. Bramwell Government Architect.

The press conference will be held in the G.I.S. 16 mm theatre at 10.50 a.m. tomorrow. You are invited to have the press conference covered.

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Release Time: 11.50 p.m