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4.
It soon became clear, however, that UDHK were not alone in seeking changes to the Budget. CRC members also expressed strong reservations about it, focusing particularly on personal tax allowances and the proposed 0.5% rates rise. Given this combination, the HKG thus faced the possibility of being unable to muster majority support for the Budget - an unprecedented situation.
5.
CRC are torn by conflicting interests: on the one hand they need to demonstrate for electoral reasons that UDHK do not have a monopoly in representing the direct interest of the ordinary voter. On the other, as a political grouping, they advocate stability, and are well aware that voting down the Budget will not contribute to that stability. In the event, the CRC resisted
the overtures of the UDHK to make common cause with them and voted for the Budget (the "Appropriations Bill") on 1 April. Much credit should go to Hamish Macleod, KY Yeung and others for the lobbying they did to bring this about.
6.
It does however look probable that a substantial number of CRC members and others will vote against the rates increase when the appropriate Bill comes to the vote in May and that the proposal will thus be defeated. I think that the HKG are now becoming increasingly resigned to this prospect. Hamish told Tony the other day that he thought it was probably inevitable.
7.
The position of the CRC on the rates increase needs some analysis. An important point is that though they may sometimes behave like one, they are not yet a political party, nor do they have the trappings of one, in particular party discipline and a whipping system. Ron Arculli has led the opposition to the rates rise: he represents the real estate interests, and his constituency stands to lose most from a rates rise. Even if they were so minded, Arculli's fellow CRC members would find it very difficult to tell him that he should not campaign against and vote against the rates rise in the way his constituents expect him to.
8.
This is part of the explanation for the alleged inability of the CRC to "get their act together", about which one hears a lot of criticism, especially from HKG officials. The truth is that there are a lot of different interests in the CRC: some of them at least (eg Vincent Cheng) believe that it would be wrong in principle to defeat the Government on a major part of the budget. The attitude of the CRC leadership is ambivalent. They want to show they can represent the voters' interest, and do not wish to appear a cipher of government. But they do not want to provoke major financial and economic uncertainties. To accept the
CONFIDENTIAL