For discussion
FCR(97-98)27
on 23 July 1997
ITEM FOR FINANCE COMMITTEE
HEAD 21 - CHIEF EXECUTIVE ' S OFFICE
Subhead 700 General other non-recurrent
Members are invited to approve a commitment of $91.9 million for reimbursement to the Central People's Government for funds it has advanced to the Chief Executive's Office in connection with the preparations for the setting up of the Government of the Hong Kong Special Administrative Region.
PROBLEM
The Central People's Government (CPG) has advanced a sum of
$91 million to the Chief Executive (CE)'s Office to meet expenses relating to preparatory operations for setting up the Government of the Hong Kong Special Administrative Region (HKSAR). We have to reimburse the CPG upon the establishment of the Government of the HKSAR.
PROPOSAL
2.We propose to reimburse a sum of $91.9 million to the CPG, including $0.9 million being accrued interest up to 23 July 1997 which we received or will receive from the bank deposit.
JUSTIFICATION
3.So far, the CPG has advanced $91 million to the CE's Office on an interest-free basis. After allowing for the amount required to maintain a sufficient cashflow, we have placed the balance of the advance in fixed deposit accounts in the name of the Hong Kong Special Administrative Region Chief Executive's Office in accordance with established accounting procedures. Any unspent balance will be returned to the Government of the HKSAR upon closing of accounts. During the past few months, the interests earned through the deposit accounts have accumulated to $0.9 million. Although the CPG has agreed not to charge interest on the funds advanced, we do not consider that we should treat interests thus earned as income to the general revenue of the Government of the HKSAR. We propose therefore to reimburse CPG both the principal and interest we earned from the bank deposits, totalling $91.9 million.
4.The estimated expenditure in connection with the preparatory operations in setting up the Government of the HKSAR is $139.94 million. Of this, we have met from public funds around $34.63 million, used principally for salary and allowances for seconded/redeployed civil servants and for part of the operating expenses of the CE's Office. We have to earmark another $31.7 million for the proposed remuneration package for Members of the Executive Council and the Provisional Legislative Council (PLC) up to 30 June 1997, subject to Members' approval of FCR(97-98)26. If approved, we will pay this out of the general revenue and not from the advance from the CPG. We are paying the remaining $73.61 million from the advance from the CPG. A breakdown of the expenditure is as follows -
| | $'000
|
|---|
| (a) | CE's Office |
|
| (i)Salaries and allowances | 4,377
|
| (ii)Operating expenses | 10,653
|
| (b) | Allowance for PLC Members | 5,000
|
| (c) | Operating expenses for PLC Secretariat(including a contingency provision for salary adjustment) | 13,990
|
| (d) | Inauguration events of the Government of HKSAR | 39,585
|
| | _______
|
| Total | 73,605
|
5.As regards paragraph 4(a) (i), the provision of $4.377 million is to cover the salaries and allowances for the CE, the Secretary for Justice, law drafting and translation officers for the period 16 December 1996 to 30 June 1997. Details are at Enclosure 1.
6.As regards paragraph 4(a) (ii), the provision of $10.653 million is to cover the expenses on hiring of services from the Office of Tung Chee Hwa until 31 August 1997, hiring of legal services and public relations activities, including media training. Details are at Enclosure 2.
7.As regards paragraph 4(b), the provision of $5 million is to reimburse PLC Members for the actual expenditure incurred by them in meeting the operating expenses relating to their official capacity up to 30 June 1997.
8.As regards paragraph 4(c), the provision of $13.99 million is to cover the operating expenses of the PLC Secretariat on staff salaries and allowances (including salary adjustment), office equipment and computers, hire of professional services, transport and travelling, office accommodation, etc., up to 30 June 1997.
9.As regards paragraph 4(d), the provision of $39.585 million is to cover the expenses relating to the inauguration ceremony and cocktail reception of the Government of the HKSAR, and the exhibition of the 32 gifts from the Mainland. A breakdown of the expenditure items is at Enclosure 3.
FINANCIAL IMPLICATIONS
10.There is no specific provision in the 1996-97 and the 1997-98 Estimates to meet the preparatory operation of the CE's Office to set up the Government of the HKSAR. We will offset the proposed reimbursement of $91.9 million, if approved, by deleting an equivalent amount from Head 106 Miscellaneous Services Subhead 789 Additional commitments.
BACKGROUND INFORMATION
11.The CE's Office has commenced operation since 16 December 1996 to prepare for the setting up of the Government of the HKSAR. There are two sources of funding. The Hong Kong Government pays for the cost of seconded staff and part of the operating expenses of the Office. We have met from the advance from the CPG expenses which we did not consider to be an appropriate charge to the general revenue before 1 July 1997. With the establishment of the Government of the HKSAR with effect from 1 July 1997, it is now necessary to reimburse the CPG.
Chief Executive's Office
July 1997
Note : The title of the Head will be subject to Members' approval of FCR(97-98)24 on adaptation of terms which Members will consider at the same meeting.
Enclosure 1 to FCR(97-98)27
Salary and Allowances
| Item | Estimated
provision
required
$ ' 000
|
|---|
| 1.Chief Executive (16.12.96 - 30.6.97) |
|
| ‧ Salary | 1,703
|
| ‧ Non-accountable entertainment allowance | 437
|
| Sub-total | 2,140
|
|---|
| 2.Secretary for Justice (1.4.97 - 30.6.97) |
|
| ‧Salary | 579
|
| ‧Non-accountable entertainment allowance | 51
|
| Sub-total | 630
|
|---|
| 3.Law Drafting Officer (8.3.97 - 30.6.97)
|
| ‧ Salary | 435
|
| ‧ All-inclusive allowance | 317
|
| Sub-total | 752
|
|---|
| 4.Assistant Law Drafting Officer (13.3.97 - 30.6.97)
|
| ‧ Salary | 267
|
| ‧ All-inclusive allowance | 176
|
| Sub-total | 443
|
|---|
| 5.Senior Law Translation Officer (9.5.97 - 30.6.97)
|
| ‧ Salary | 135
|
| ‧ All-inclusive allowance | 16
|
| Sub-total | 151
|
|---|
| 6.Law Translation Officer (26.3.97 - 30.6.97)
|
| ‧ Salary | 188
|
| ‧ All-inclusive allowance | 73
|
| Sub-total | 261
|
|---|
| Total | 4337
|
|---|
Enclosure 2 to FCR(97-98)27
Operating Expenses to be Paid in Advance from the Central People 's Government
| Item | Estimated
provision
required
$' 000
|
|---|
| 1. | Hiring of services from Office of Tung Chee Hwa until 31.8.97 | 4,770
|
| 2. | Hiring of legal services | 400
|
| 3. | Hiring of public relations services and sponsored visits | 4,099
|
| 4. | Reimbursement of expenses already incurred by Office of Tung Chee Hwa(16.12.96 - 31.1.97)
| 290
|
| 5. | Miscellaneous (including printing of consultation documents and bills and setting up of Internet Home Page, etc.) | 1,094
|
| Total | 10,653
|
Enclosure 3 to FCR(97-98)27
Inauguration Events of the Government of Hong Kong Special Administrative Region
| Item | $ '000
|
|---|
| (A) | Inauguration Ceremony |
|
| (i)Technical cost | 5,704
|
| (ii) Programme production | 10,200
|
| (iii) Broadcasting and publicity | 5,083
|
| (iv) Others | 4,013
|
| Sub-total | 25,000
|
| (B) | Cocktail Reception |
|
| (i)Food and beverage | 1,880
|
| (ii)Audio and lighting | 123
|
| (iii)Technical cost | 235
|
| (iv)Production cost | 1,725
|
| (v)Others | 2,037
|
| Sub-total | 6,000
|
| (C) | Exhibition of the 32 Gifts from the Mainland(on 1, 3 and 4 July 1997) |
|
| (i)Rental of venue | 1,400
|
| (ii)Transportation and packing | 900
|
| (iii)Design and display | 700
|
| Sub-total | 3,000
|
| (D) | Publicity and Media Relations Activities(including production of handover documentary) | 3,700
|
| (E) | Contingency(5% of items (A) to (D)) | 1,885
|
| Total | 39,585
|
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