Money saved 'will not create new services'

PUBLISHED : Friday, 03 September, 1999, 12:00am
UPDATED : Friday, 03 September, 1999, 12:00am

Money saved in the next financial year by government departments cutting costs will not be used to provide new services, an official said yesterday.

Departments have been ordered to improve efficiency by five per cent by 2002/2003. This would amount to a $1 billion saving in 2000/2001, acting Secretary for Treasury Carrie Lam Cheng Yuet-ngor said.

'There is no way for any department to say they cannot achieve it,' Mrs Lam said.

She pledged there would be no lay-offs to achieve the savings target.

Government expenditure is expected to grow three per cent in the coming year.

'The $1 billion saved and the growth in government expenditure is still not enough to cover our debts [services that the Government has promised to provide in the past]. The extra funds for providing new services are nearly zero,' she said.

The $1 billion would be spent on promised services including assigning a social worker to each school, employing degree-level primary school teachers and building hospitals.

To encourage departments to save money, 10 per cent of the $818 million saved this year has been kept as an 'efficiency dividend' and reimbursed to the departments according to the share they have contributed to the savings.

The Health and Welfare Bureau got the biggest share of $39 million, about 48 per cent, of the dividend.

The Treasury, the Social Welfare Department and the Council of Social Service will meet to decide how to achieve the desired cost-cutting measures for the next three years.

The Treasury also hopes to look at co-ordinating departments to save more money in areas such as youth services, health care and tourism.

Mrs Lam said civil servants saved $647 million in the past year.

About $170 million of the savings were placed in separate department accounts instead of being ploughed back into the Treasury.

The savings may be used for computerisation and energy-saving measures.

The Finance Bureau had spent 20 per cent less than an estimated $11.5 million in expenses in 1998-99 by using less on entertainment, attending fewer overseas conferences and consuming less paper and electricity.