FCR(98-99)31
For discussion
on 18 September 1998
ITEM FOR FINANCE COMMITTEE
HEAD 184 - TRANSFERS TO FUNDS
Subhead 990 Payment to the Disaster Relief Fund
Members are invited to approve supplementary provision of $25 million under Head 184 Transfers to Funds Subhead 990 Payment to the Disaster Relief Fund.
PROBLEM
The uncommitted balance of the Disaster Relief Fund (the Fund) is insufficient to meet possible calls for grants to relief agencies for providing disaster relief outside Hong Kong for the remainder of the 1998-99 financial year.
PROPOSAL
2.The Director of Administration (D of Adm) proposes supplementary provision of $25 million under Head 184 Transfers to Funds Subhead 990 Payment to the Disaster Relief Fund to enable the transfer of additional funds from the general revenue to the Fund.
JUSTIFICATION
3.Provision under Head 184 Subhead 990 is for transfer of funds from the general revenue to the Fund to meet payment for humanitarian aid in relief of disasters that occurred outside Hong Kong. In the 1998-99 Estimates, we have included $9 million under this subhead for the purpose. Together with an estimated opening balance of about $38 million and an estimated revenue of $3illion, the Fund would have a total provision of $50 million for 1998-99. At that time, no estimate of payment was made after 12 December 1997 (i.e. the cut-off date for the 1998-99 Draft Estimates).
| 4.As it turned out, during the period from 12 December 1997 to 31 March 1998, the Fund disbursed grants totalling $27.81illion for 11 applications for emergency relief in response to disasters in the Mainland and other parts of Asia. Details of these grants are at Enclosure 1. Thus, even with a transfer of $9 million from Head 184 Subhead 990, the available balance of the Fund as at 1 April 1998 was $19.438 million, calculated as follows - | Encl.1 |
| $ million
|
|---|
- Estimated opening balance for 1998-99 at the time the 1998-99 Draft Estimates were prepared
38.248
| - Payments made in 1997-98 after the Estimates cut-off date (i.e. 12 December 1997)
27.810
| | ______
| - Opening balance as at 1 April 1998
[(a) - (b)]
10.438
| - (d) Transfer from the general revenue (i.e. from Head 184 Subhead 990)
| 9.000
| | ______
| - (e) Available balance as at 1 April 1998
[(c) + (d)]
19.438
| | ______
|
|
|
|
|
|
| 5.From April to mid August 1998, the Disaster Relief Fund Advisory Committee approved a total of eight grants involving $12.55 million. As a result, the available balance of the Fund was reduced to $6.888illion. On 12鼦ugust 1998, the Secretary for the Treasury approved, under delegated authority, supplementary provision of $10 million under Head 184 Subhead 990 to top up the Fund. Since then, the Disaster Relief Fund Advisory Committee has approved another four applications with a total grant of $13.39 million. We set out at Enclosure 2 details of the grants approved so far in 1998-99. As at 4䒷eptember 1998, the uncommitted balance of the Fund stands at $3.498 million only, as calculated below - | Encl. 2 |
| $ million
|
|---|
| (a) Available balance as at 1 April 1998 | 19.438
|
| (b) Supplementary provision approved under delegated authority | 10.000
|
| (c) Total grants approved by the Disaster Relief Fund Advisory Committee from 1 April to 4 September 1998 | 25.940
|
| ______
|
| (d) Uncommitted balance as at 4 September 1998 [(a) + (b) - (c)] | 3.498
|
| ______
|
6.The purpose of setting up the Fund is to enable the Administration to respond swiftly to appeals for humanitarian aid outside Hong謭ong. We cannot achieve this objective if the Fund has no readily available provision. As balance in the Fund has been depleted to a very low level of only $3.498 million, it may not be able to meet possible calls on the Fund for the remainder of the financial year in a speedy manner. D of Adm therefore considers it necessary to top up the Fund to a reasonable level by seeking a further transfer from the general revenue. While it is not possible to estimate with any degree of certainty the amount of funds required for the second half of the financial year because there is no predictable pattern of disasters, D of Adm considers that it would be appropriate to restore the balance in the Fund to at least half of the total provision of $50 million as originally intended for 1998-99. Given that the existing balance of the Fund is expected to be exhausted in meeting further calls for grants for providing relief to flood victims in the Mainland, we propose supplementary provision of $25 million under Head 184 Subhead 990.
FINANCIAL IMPLICATIONS
7.If Members approve this proposal, we will offset the supplementary provision required by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 789 Additional commitments. Any unspent balance in the Fund will be taken into account when we determine the amount of funds to be transferred from the general revenue to the Fund in the 1999-2000 Draft Estimates.
BACKGROUND INFORMATION
8.On 1 December 1993, the Legislative Council passed a resolution to establish a Disaster Relief Fund to provide a ready mechanism for Hong Kong to respond swiftly to appeals for humanitarian aid in relief of disasters which occurred outside Hong Kong. On 10 December 1993, Members approved, vide FCR(93-94)102, an appropriation of $50 million for the establishment of the Fund.
9.We set up a Disaster Relief Fund Advisory Committee in February 1994 to advise on disbursements from the Fund. The Committee is chaired by the Chief Secretary for Administration and comprises the Secretary for the Treasury, the Secretary for Health and Welfare, two Executive Council Members, two Legislative Council Members and two leading members of the community.
10.Given the contingency nature of the Fund, we cannot estimate with any degree of certainty the requirements for any one financial year. For the purpose of the annual Draft Estimates, our practice is to top up the Fund to its original balance of $50 million. Moreover, we do not make any estimate of possible payments after the cut-off date for the Draft Estimates as there is no predictable pattern of disasters.
11.The annual expenditure of the Fund since its establishment is as follows -
| 1993-94 | 1994-95 | 1995-96 | 1996-97 | 1997-98
|
|---|
Total expenditure
($ million) | - | 32 | 49 | 20 | 38
|
Administration Wing,
Chief Secretary for Administration's Office
September 1998
Enclosure 1 to FCR(98-99)31
Grants from the Disaster Relief Fund
(from 12 December 1997 to 31 March 1998)
| Grants | Amount
($ million)
|
|---|
| Relief programme for typhoon victims in Vietnam - Grant to Hong Kong Red Cross | 1.20
|
| Relief programme for earthquake victims in Hebei Province, the Mainland - Grant to Hong Kong Red Cross | 6.24
|
| Relief programme for earthquake victims in Hebei Province, the Mainland - Grant to World Vision Hong Kong | 3.00
|
| Relief programme for earthquake victims in Hebei Province, the Mainland - Grant to Jian Hua Foundation Ltd | 0.50
|
| Relief programme for earthquake victims in Hebei Province, the Mainland - Grant to Oxfam Hong Kong | 2.60
|
| Relief programme for earthquake victims in Hebei Province, the Mainland - Grant to Hong Kong Committee for United Nations Children's Fund | 2.93
|
| Relief programme for earthquake victims in Hebei Province, the Mainland - Grant to the Salvation Army | 2.00
|
| Relief programme for snowstorm victims in Qinghai Province, the Mainland - Grant to Oxfam Hong Kong | 2.60
|
| Relief programme for snowstorm victims in Qinghai Province, the Mainland - Grant to World Vision Hong Kong | 3.50
|
| Relief programme for people in the Democratic People's Republic of Korea - Grant to Medecins Sans Frontieres Hong Kong | 2.50
|
| Relief programme for snowstorm victims in Qinghai Province, the Mainland - Grant to Jian Hua Foundation Ltd | 0.74
|
Total
| 27.81 |
Enclosure 2 to FCR(98-99)31
Grants from the Disaster Relief Fund
(from 1 April to 4 September 1998)
| Grants | Amount
($ million)
|
|---|
| Relief programme for people suffering from starvation in the Democratic People's Republic of Korea - Grant to Cedar Fund Limited | 1.00
|
| Relief programme for drought victims in Mindanao, the Philippines - Grant to Oxfam Hong Kong | 0.35
|
| Relief programme for people suffering from a cholera epidemic in Mozambique - Grant to Medecins Sans Frontieres Hong Kong | 0.50
|
| Relief programme for earthquake victims in Afghanistan - Grant to Hong Kong Red Cross | 1.20
|
| Relief programme for displaced people in Sudan - Grant to World Vision Hong Kong | 0.50
|
| Relief programme for flood victims in Jiangxi and Guangxi Provinces, the Mainland - Grant to World Vision Hong Kong | 3.00
|
| Relief programme for flood victims in Jiangxi, Hunan and Hubei Provinces, the Mainland - Grant to Hong Kong Red Cross | 3.00
|
| Relief programme for flood victims in Hunan and Guangxi Provinces, the Mainland - Grant to the Salvation Army | 3.00
|
| Relief programme for flood victims in Hunan, Sichuan and Yunnan Provinces, the Mainland - Grant to Medecins Sans Frontieres Hong Kong | 5.39
|
| Relief programme for flood victims in Hubei and Jiangxi Provinces, the Mainland - Grant to World Vision Hong Kong | 4.00
|
| Relief programme for flood victims in Hubei, Hunan, Anhui, Heilongjiang and Jilin Provinces, and Inner Mongolia Autonomous Region, the Mainland - Grant to Hong Kong Committee for United Nations Children's Fund | 3.00
|
| Relief programme for flood victims in Shaanxi, Guangxi and Yunnan Provinces, the Mainland - Grant to Oxfam Hong Kong | 1.00
|
| Total | 25.94
|
