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employment. I now forecast growth in GDP of about 7% in 1985. This and many other allied estimates will necessarily be updated in September. Members may share my suspicions on the likely accuracy of such forecasts, although they must be made.
10.
Your Government remains committed to support of the free market economy; to provision of the infrastructure within which enterprise can flourish without unnecessary Government regulation; to the care of those who cannot care for themselves;
and to low overall taxation. Hong Kong is not a tax haven, but we know not least from the experience of others that moderation in taxation is an essential spur to individual effort. Tax
avoidance is not.
11.
old
in
My revenue proposals for 1985-86 reintroduce two
measures of indirect taxation. I propose also increases taxes, licences,
licences, duties, fees and charges in total designed to raise revenue by $1.35 billion. The need to maintain yields in
real terms against the serious inflation which we have experienced over the past two years will be generally appreciated. I expressly warned about this in my winding up speech on 25 April 1984 (2). In some sensitive areas, however, the proposed increases are much lower, reflecting a conscious
acknowledgement of public concerns. In most cases, moreover, the additional indirect taxation proposed is designed to fall on expenditure on luxuries not on essentials.
12.
For reasons which I will give later no increases in direct taxation are proposed. Indeed I shall put forward cuts in personal taxes for the more deserving. These will cost $150 million next year and $210 million in a full year.
13.
The net additional revenue to be raised will thus be
$1.2 billion. The comparable figure last year in money terms was $1.5 billion. In the previous year it was $3 billion.
trend is clear.
The
(2) Paragraph 34. See also 1984 Budget Speech paragraph 86.
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