history of Hong Kong and would have an extensive and far-reaching effect on our community. On the other hand, after weighing its advantages and disadvantages, I do not think it is absolutely necessary for us to maintain a certain ratio between direct and indirect taxes because the balance between these two kinds of taxes It is would adjust itself with the cyclical change of our economy. my personal view that even when there is a genuine need for increasing revenue, the idea of sales tax should be the last thing for consideration.
Thirdly, Hong Kong has established a long standing reputation as a shopping paradise which is a major attraction to many tourists. As a result, the tourist industry has become one of
The introduction of sales the supporting pillars of our economy.
tax would inevitably have a negative effect on tourism and is undesirable to the overall economy of Hong Kong.
Fourthly, the collection of sales tax would require
Hence, it would be considerable increase in administration cost. difficult in actual practice to meet the simple and cheap administration'
requirement which was set out by our Financial Secretary as the third basic criterion in paragraph 49 of his Budget speech.
ter
II.
Housing policy
A
The Government's determination to deal with the housing
In recent years, I have problem is worthy of our appreciation. always been advocating that our housing policy should place greater emphasis on encouraging home ownership and more participation of
I am very pleased to learn from paragraph 58 the private sector. of the Budget speech that 12,160 flats are expected to be produced under the Home Ownership and Private Sector Participation Schemes next year, which is 21 over the average annual production target under these Schemes. Nevertheless, it only represents 21.3% of the combined production figure of 57,160 flats after counting in the
CANC