Introduction
The objective of this conference is to promote a
better understanding of the world's major financial markets and, to this end, you will be systematically examining the factors determining investment opportunities in these markets. The first two papers will be concerned with the institutional, legal and economic environment in which the securities market in Hong Kong operates. In case I were to say anything contradictory, I shall not trespass on the ground already covered by Mr. Kan or to be covered by Mr. McInnes and Mr. Flaherty.
2. I had thought of taking a purely monetary subject such as interest rates, or the implications for Government
policy, of any, of the diversification of financial
institutions in Hong Kong or the Hong Kong dollar and·· the foreign exchange market today compared with five years azo. But these are dangerous subjects to cover in 10 minutes or so. Instead, and briefly, I shall summarise for you the way in which this Government approaches the task of managing the public finances of this city for that is also relevant, and not all that indirectly, to
the question of investment opportunities. I shall illustrate our management by reference to the 1977-78
budget.
Objectives of Budgetary Policy
3. Any management task must be expressed in terms of objectives and budgetary policy in Hong Kong has three objectives: first, to implement approved Government policies and programmes; secondly, to ensure that the required revenue is raised as equitably as possible as between particular classes and groups of taxpayers (and raised, also, as inexpensively as practicable for, in a low tax environment
costly administrative overheads cannot be afforded); and, thirdly, to minimise any adverse effects of public
expenditure and of the fiscal system on the internal
cost/price structure of the economy, on private investment
decisions and on the monetary environment.