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"A balanced Budget is being achieved by
continual downward pressure on public sector
expenditure and by continual upward pressure
Further increases in direct
on revenue
...
taxation are at least undesirable."
When one takes into account that the downward pressure on
public sector expenditure will still leave us with a 4.6 per cent increase in real terms (11.5 per cent in money terms) in 1985-86, that statement seems very likely to lead to further
increases in indirect taxation next year.
Many people who have to make their own domestic or business budgets will feel that the Financial Secretary
constructs his the wrong way round. He has told us that he
first sets a limit for General Revenue Account expenditure.
When, after the hard bargaining with departments, a final figure emerges, he then looks at the revenue estimates. If
there is an "ostensible deficit", "new revenue measures are
clearly inevitable". And he favours new measures of indirect
rather than direct taxation.
The argument as between the two will go on forever.
don't think one can say that one is more equitable than the
other. It depends on the detail and in practice all tax systems are imperfect and a degree of inequity is inevitable. In Hong Kong that inequity is tolerable because the burden on each family is low. The important thing is to keep it low. I do not necessarily oppose the tax measures proposed in this
Budget, but I believe that the maintenance of our low tax
environment narrow base and low rates of charges is of the
utmost importance, so, as I said last year, we should get back
to cutting our coat according to our cloth. In other words,
the Budget should be revenue-based as it used to be, not
expenditure-based, and the reserves should return to their
classic role, that is, to meet unforeseen deficits.
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