Hong Kong Criticised For Stockpiling Cough Medicine

by Mary Swire, Tax-News.com, Hong Kong

26 November 2001

After a Hong Kong Audit Commission value-for-money investigation found that almost 80 per cent of the Government's equipment in stock had not been requested as frequently as expected - and that 194 items, worth $4.4 million, would meet government requirements for at least 100 years - Tung Chee-hwa, Hong Kong's chief executive, vowed he would not tolerate slack civil servants or the wastage of public money.

Mr Tung was speaking at a hastily arranged press conference after a report on the investigation embarrassed the executive by revealing that the SAR's supplies department had wasted HK$35m in 2000-01 because of poor management of its inventories.

More serious, but less headline-grabbing, is the report's accusation that the government may have undervalued the reserve price of a parcel of land sold in 1997 by more than HK$1bn.

The Government Supplies Department stocks 1,631 different items, ranging from office supplies and uniforms to furniture, electrical and medical equipment. Apart from the 100-year stocks, another 374 items, worth $10.8 million, will last more than two years. Stockpiled goods are supposedly purchased on the basis of an average 'stock turnout rate' of five times a year - meaning each item should be used up about every two and a half months.

Among the stock making up a category labelled 'dormant items' were duplicating stencils worth $598,250, 'apricot pink' sheets worth $133,071, cough medicine worth $667,730, and various light fittings worth $550,000.

The report said: 'The Government ties up money and incurs storage costs for these items, and will suffer losses if these items become obsolete or unwanted by users.'

The report notes there is a need to improve the government's product guide on information technology purchases. It says if government departments last year had bought old-fashioned cathode ray monitors instead of the liquid crystal display type, the annual expenditure on computer monitors would have been cut by HK$19m.

Earlier this month Hong Kong was named for the eighth year in a row the world's freest economy by the Heritage Foundation, a US think-tank. But even Hong Kong, the epitome of small government, manages to employ 180,000 civil servants. That's $4 of cough medicine per person, then. Can't they buy their own?

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