FRIDAY, JULY 19, 1974
PUBLIC DEBATE URGED ON GOVT SPENDING
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THE FINANCIAL SECRETARY, MR. PHILIP HADDON-CAVE, THIS EVENING CALLED FOR A REAL PUBLIC DEDATE ON THE QUESTION OF HOW FAST PUBLIC EXPENDITURE SHOULD GROW IN HONG KONG IN RELATION TO THE ECONOMY AS A WHOLE.
ADDRESSING THE ANNUAL DINNER OF THE HONG KONG SOCIETY OF ACCOUNTANTS, MR. HADDON-CAVE SAID SUCH A DEBATE WAS NEEDED TO PROVIDE THE GOVERNMENT WITH GUIDANCE AS TO THE BALANCE WHICH SHOULD BE STRUCK BETWEEN PUBLIC EXPENDITURE AND ECONOMIC GROUTH.
THE DEBATE, HE ADDED, SHOULD FOCUS ON THE EXTENT TO WHICH FISCAL AND PUBLIC EXPENDITURE POLICIES SHOULD DE DICTATED BY THE NEED TO AVOID AINY POSSIBILITY OF DAMAGING THE GROUTH RATE OF THE ECONOMY AND ON THE EXTENT TO WHICH THEY SHOULD BE RESPONSIVE TO SOCIAL AND POLITICAL PRESSURES TO EXPAND CERTAIN PUBLIC SERVICES.
THE FINANCIAL SECRETARY NOTED THAT IN THE WAKE OF HIS 1974/75 BUDGET VERY LITTLE ATTENTION WAS PAID TO THE RELATIONSHIP BETWEEN THE FISCAL SYSTEM AND HENCE THE LEVEL OF PUBLIC EXPENDITURE ON THE ONE HAND, AND THE ECONOMY ON THE OTHER.
+YET THIS RELATIONSHIP IS CRITICAL AND A PUBLIC DEBATE ON IT CANNOT DE POSTPONED,+ HE SAID.
HE GAVE TWO REASONS WHY SUCH A DEBATE WAS RELEVANT.
FIRSTLY, IN VIEW OF THE PRESENT SIZE AND STRUCTURE OF THE ECONOMY, IT WAS NECESSARY TO CONSIDER WHETHER HONG KONG COULD NOW AFFORD TO BE A LITTLE LESS CONCERNED WITH PROTECTING THE GROUTH RATE OF THE ECONOMY. HE STRESSED THAT HE WAS REFERRING TO THE GROUTH RATE AND NOT TO THE ECONOMY'S INHERENT ABILITY TO MAINTAIN INTERNAL AND EXTERNAL EQUILIBRIUM.
IN THE PAST 20 YEARS, HE EXPLAINED, HONG KONG'S PRIMARY EMPHASIS HAS HAD TO BE ON THE DEVELOPMENT OF OUR EXPORT ORIENTED MANUFACTURING ECONOMY AND THE FISCAL SYSTEN, AND HENCE THE LEVEL OF EXPENDITURE ON PUBLIC SERVICES, HAS HAD TO BE TAILORED TO THE OVER-RIDING NEED NOT TO DAMAGE THAT DEVELOPMENT. THE QUESTION WAS WHETHER TUIS POLICY SHOULD CONTINUE TO BE FOLLOWED CONSIDERING PRESENT DAY CIRCUMSTANCES.
SECONDLY, MR. HADDON-CAVE VENT ON, IN VIEW OF CROWING EXPENDITURE COMMITMENTS, COUPLED WITH OUR SPENDING MILITY HAVING CAUGHT UP WITH OUR ABILITY TO FINANCE SPENDING, A STRATEGY WAS NEEDED THAT WOULD ACHIEVE AN ACCEPTADLE BALANCE BETWEEN SATISFYING SHORT AND MEDIUM TERNI SOCIAL ASPIRATIONS AND PERMIT A GROUTH RATE OF THE ECONOMY IN THE LONGER TERI] WHICH COULD SECURE THE COMMUNITY 'S FUTURE.
/FOR THILS