Mr J A B Stewart
(HKD)
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Mr.
W/32
Stefont
We must make the
Cc:
Mr Cortazzi Mr D F Murray Mr M Stewart
pourt.
дне соледе ная
H.K. is sui generis.
a statence rnight Inst
ar
But
two
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amoss in the
HONG KONG : BUDGET
next legco speech.
In your minute of 4 April 1977 you asked for my comments on the view the Governor expounded to you on your recent visit, namely that in a Colonial world, economic and social philosophies and policies are traditionally outlined in the Governor's Legco annual opening speech and, by implication, would not be expected to appear in any Colonial Budget presented by a Financial Secretary.
2.
plu
4/5
My response would be that whilst the Governor's Legco opening speech does, of course, outline his general philosophy and policies in a qualitative manner, it does not provide sufficient quantitative material of economic merit,or indicate how economic and fiscal techniques are to be used for these ends. The Budget is normally seen, in any industrialised society, as an instrument of achieving economic and social objectives. It is the absence of recognition of this, and its implications in Hong Kong, that is the core of my criticism of their Budget. Hong Kong is no longer a Pitcairn or Tristan de Cunha which can safely operate on an accountants good housekeeping basis. The significance of Hong Kong (the 17th largest trading nation in the world and 4th largest foreign exchange market) rules out, to my mind, such a simple naive approach.
3.
As I indicated in my minute to you of 25 March 1977, their economic thinking needs to be brought up to date (I think the PUS called it "Victoria!), for example; budgetary deficits are no bad thing in that they can create employment; a rising level of public expenditure has significant benefits and severe cutback.., as in 1975, can be traumatic, etc etc.
it.
Perhaps we could discuss further when we discuss their Budget. You may care to note that I shall be out of the office from 25 April to 6 May.
19 April 1977-
omis
Orman of
Whecubay in sure that hur Sworth the wwwmay
has missed me point.
shull teelk to him again.
of
Adrian Smith
Senior Economic Adviser
i thick Mor Sunth
have missed (or avoided) the point, and
H/w capy of Sinm.m's leyes he has not convinced speed, in the clubhing of
which he casulled u
can
1
See
CA
As a
start
comy of Sir M.M's lust
сом SONFIDENTIAL Legio speech?
FN 11/2
Obe
19 14