THE EXCHANGE RATE HAD CONTINUED TO DEMONSTRATE
REMARKABLE STABILITY, REMAINING FOR MOST OF THE TIME WITHIN A
NARROW RANGE AGAINST THE US DOLLAR. THERE HAD NEVERTHELESS BEEN
SMODIC SPECULATION BASED ON UNFOUNDED RUMOURS OF A POSSIBLE
CHANGE IN THE LINK. THE FINANCIAL SECRETARY SAID, ''ALTHOUGH SUCH
SPECULATIVE ACTIVITY WAS SHORTLIVED, I REITERATE THAT THE
GOVERNMENT HAS NO INTENTION OF TAMPERING WITH THE LINK''.
6.
REFERRING TO GOVERNMENT EXPENDITURE, THE FINANCIAL SECRETARY
SAID IT REMAINED FIRMLY UNDER CONTROL. ON THE OTHER HAND REVENUE
YIELDS HAD INCREASED SUBSTANTIALLY IN RESPONSE TO THE IMPROVEMENT
IN ECONOMIC PERFORMANCE. AS A RESULT HE NOW EXPECTED IN THE
CURRENT FINANCIAL YEAR A SURPLUS ON GENERAL REVENUE ACCOUNT OF
SOME HKD3 BILLION. FURTHERMORE, ALTHOUGH PARTLY DUE TO REVENUE
OF A WINDFALL NATURE, THE BALANCES IN THE CAPITAL FUNDS HAD GAINED
SOME HKD1.9 BILLION. MOST OF THE IMPROVEMENT IN REVENUE HAD COME
FROM TAX SOURCES THAT WERE RECURRENT IN NATURE., HE WAS THEREFORE
ABLE TO PLAN ON THE BASIS THAT THIS REPRESENTED A GENUINE GAIV
TO THE NEW BASE WHICH WOULD BE SUSTAINED INTO 1987-88 AND
BEYOND. HE PROPOSED THAT THERE SHOULD BE A CONTROLLED INCREASE
IN PUBLIC SPENDING TOGETHER WITH A MODEST LOWERING OF THE
BURDEN ON TAXPAYERS.
7. THE FINANCIAL SECRETARY PRESENTED A PACKAGE OF MEASURES THAT
INCLUDED SMALL INCREASES IN DUTY ON LIQUOR, CIGARETTES AND FUEL
AND ON CAR REGISTRATION, BUSINESS REGISTRATION, LICENCES AND
TRAVEL DOCUMENTS. HE ALSO PROPOSED A REDUCTION IN THE RATE OF
PERSONAL TAX FROM 17 PERCENT TO 16.5 PERCENT., INCREASES IN THE
THRESHOLDS AND ALLOWANCES. HE PROPOSED THAT PROFIT TAX SHOULD BE
REDUCED FROM 18.5 PERCENT TO 18 PERCENT.
8. THE BUDGET HAS BEEN WELL-RECEIVED.
SIGNED HOLLOWAY
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