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TELNO 973
OF 02104OZ APRIL 92
INFO PRIORITY PEKING
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050225
MDHIAN 9090
LEGCO DEBATE ON THE BUDGET.
1. THE LEGISLATIVE COUNCIL APPROVED THE EXPENDITURE SIDE OF THE BUDGET ON 1 APRIL BY PASSING THE APPROPRIATION BILL BY 36 VOTES TO 18. THREE MEMBERS WERE ABSENT. THE TWO PRO-PEKING MEMBERS ABSTAINED. ONE OF THEM TOLD THE FINANCIAL SECRETARY INFORMALLY THAT THEY WERE ACTING ON INSTRUCTIONS IN VIEW OF LU PING'S REMARKS ON THE SUBJECT, BUT AS YET HAD NO INSTRUCTIONS ON HOW TO REACT TO THE REVENUE MEASURES. THE VOTE WENT ALONG QUOTE PARTY UNQUOTE LINES WITH MOST OF THE MIDDLE GROUND VOTING IN SUPPORT OF THE BILL, INCLUDING THE CRC MEMBERS.
2. WE ARE NOT OUT OF THE WOODS YET. THE REVENUE SIDE OF THE BUDGET WILL BE PRESENTED TO LEGCO IN THE FORM OF FOUR BILLS AND TWO RESOLUTIONS. IT IS NOT CLEAR AT THIS STAGE WHEN THE KEY VOTES WILL BE TAKEN. THE MAIN CHALLENGE WILL BE DIRECTED AGAINST THE PROPOSAL TO INCREASE THE RATES FROM 5.5 TO 6 PER CENT OF RATEABLE VALUES. OUR BEST GUESS IS THAT LEGCO WILL VOTE ON THE RATES PROPOSAL ON EITHER 29 APRIL OR 6 MAY.
3. MEDIA COVERAGE OF THE POLITICAL TUSSLE OVER THE BUDGET HAS BEEN REASONABLY BALANCED THROUGHOUT. THE FINANCIAL SECRETARY HAS MANAGED TO GET ACROSS HIS MESSAGE. THE PUBLIC AND A LARGE SECTOR OF THE PRESS CORPS HAVE GENERALLY ACCEPTED THAT HIS PROPOSALS ARE A SENSIBLE AND BALANCED PACKAGE. MOST WRITERS OF EDITORIALS, POLITICAL COLUMNS AND ANALYSIS ARTICLES HAVE PRESENTED THE ISSUE (ACCURATELY) IN TERMS OF A POLITICAL CONTEST WITHIN LEGCO, WHICH MIGHT HAVE IMPORTANT CONSTITUTIONAL IMPLICATIONS BUT WHICH DOES NOT REFLECT POPULAR DISCONTENT OVER THE BUDGET.
4. TODAY'S REPORTING HAS FOCUSED ON THE FINANCIAL SECRETARY'S STATEMENT IN HIS SPEECH YESTERDAY THAT HE WAS NOT PREPARED TO AMEND THE BUDGET PACKAGE BUT THAT HE WOULD AIM TO INCREASE SALARIES TAX ALLOWANCES SUBSTANTIALLY NEXT YEAR, WOULD REVIEW THE TAX BANDS TO SUBSTANTIALLY LESSEN THE TAX LIABILITY OF THE SANDWICH CLASS AND HIS INTENTION TO WORK CLOSELY WITH MEMBERS IN
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