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Arpenditure exceeds the calculated resources. From that conclusion onwards the
Mic is inevitable, ie either revenue has to be further increased or expenditure 183 to be cut. Philip Haddon-Cave has prepared the way for a mixture of both.
.co he has at various stages in the Budget, as well as on a number of other „lors, reaffirmed the basic need to keep the tax as low as possible an. to disturb the free trade and free enterprise image of Hong Kong as little as possible, there are fairly strict limits to the extent to which the revenue can be Increased unless the philosophy is modified. On the other hand it seems at let possible that expenditure will sharply outrun the estimates unless it is strongly reined back. It seems to me therefore that over the next few years he can o xpect to see the Financial Secretary battling hard to keep the lid expenditure and it is already possible in his speech to see what he would choose to be his particular targets.
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7. There have been increasing signs already through this past year of the Financial Branch battling with the other Departments (which of course is not new in Long Kong), "that the Finance Branch is both the bottle neck and the wet blanket on development plans. As you will know, Philip Haddon-Cave fought hard to resist any whittling away of the purse string control of the Finance Branch is the decentralisation of the administrative machine and I am sure we can expect
im to continue that battle and to be even more rigid in the examination of estimate proposals and more again still of supplementaries. At one stage I thought that we were perhaps beginning to move into a situation in which Hong Kong Government Departments might give more attention to long term value for money than to immediate costs of machinery being ordered for Government contracts but I fear that we shall find that the Finance Branch and the Tenders Board (time Secretary for which is the Deputy Finance Secretary) will revert to requiring that the cheapest bid should be taken unless there are very stron, other technical considerations to the contrary and it will be increasingly hard for Departments to prove those other considerations. Within this general approach I think that one can see in the Budget statement what Philip Haddon-Cave's main targets may be.
3. Dirst the public service as a whole. On this the Budget sounds a cleur warning with the injunction (in paragraph 63) that the Government must implement its declared pay policy consistently. that salary in the public service must lead those in the private sector. It also points out that there is no scope for complacency about the way in which the establishment has been growing and carries by implication a warning that Hong Kong cannot afford both to expand its public service and to spend money on improving social services and amenities. Certainly
rate both in the public service has been growing at a rapid if not alarming terms of establishment, which increased by 7.5% in the past year to a total of approximately 113,000 (a high proporation of a population of 4 million), and is costing some 1,676 million or, 43% of the total recurrent expenditure. Increases in public service salaries account for a very large part of the excess of the past year's expenditure over the estimates and there have been rumblings in the community about the way that the public services have had successive cost of living increases while many others of the population are battling to keep up with the cost of living with wages that are lagging behind. Recently the European Civil Servants asked for an anticipatory end of the year bonus to t to keep then up with the cost of living and while this might be justified (and indeed from my own pocket I have sone sympathy with the view) one can see that if this continues to happen at a time when patience and tempers are beginning to get frail
the question of the cost of living then it could produce some angry public reaction. So some curb on the growth of the establishment seems inevitable.
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9. of all the leads of public expenditure housing and public works is the one
It is almost as if the which comes in for the most mention in the Budget.
Financial RESTRECHOD
refort is made to ensure that the information given herein is accurate, but no legal responsibility is accepted for any errors or omissions
is that information and no responsibility is accepted in regard to the standing of any firms, companies or individuals mentioned.