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FRIDAY, JULY 19, 1974
PUBLIC DEBATE URGED ON COVT SPENDING
THE FINANCIAL SECRETARY, R. PHILIP HADDON-CAVE, THIS EVENING CALLED FOR A REAL PUBLIC DEBATE ON THE QUESTION OF HOW FAST PUBLIC EXPENDITURE SHOULD GROU IN HONG KONG IN RELATION TO THE ECONOMY AS A WHOLE.
ADDRESSING THE ANNUAL DINNER OF THE HONG KONG SOCIETY OF ACCOUNTANTS, MR. HADDON-CAVE SAID SUCH A DEBATE WAS NEEDED TO PROVIDE THE GOVERNMENT WITH GUIDANCE AS TO THE BALANCE WHICH SHOULD BE STRUCK BETWEEN PUBLIC.EXPENDITURE AND ECONOMIC GROUTH.
THE DEBATE, HE ADDED, SHOULD FOCUS ON THE EXTENT TO WHICH FISCAL AND PUBLIC EXPENDITURE POLICIES SHOULD BE DICTATED BY THE NEED TO AVOID ANY POSSIBILITY OF DAMAGING THE CROUTH RATE OF THE ECONOMY AND ON THE EXTENT TO WHICH THEY SHOULD BE RESPONSIVE TO SOCIAL AND POLITICAL PRESSURES TO EXPAND CERTAIN PUBLIC SERVICES.
THE FINANCIAL SECRETARY NOTED THAT IN THE WAKE OF HIS 1974/75 BUDGET VERY LITTLE ATTENTION WAS PAID TO THE RELATIONSHIP BETWEEN THE FISCAL SYSTEN AND HENCE THE LEVEL OF PUBLIC EXPENDITURE ON THE ONE HAND, AND THE ECONOMY ON THE OTHER.
+YET THIS RELATIONSHIP IS CRITICAL AND A PUBLIC DEBATE ON IT CANNOT CE POSTPONED,+ HE SAID.
HE GAVE TWO REASONS WHY SUCH A DEBATE WAS RELEVANT.
FIRSTLY, IN VIEW OF THE PRESENT SIZE AND STRUCTURE OF THE ECONOMY, IT WAS NECESSARY TO CONSIDER WHETHER HONG KONG COULD NOW AFFORD TO BE A LITTLE LESS CONCERNED WITH PROTECTING THE GROWTH RATE OF THE ECONOMY. HE STRESSED THAT HE WAS REFERRING TO THE GROUTH RATE AND NOT TO THE ECONOMY'S INHERENT ABILITY TO MAINTAIN INTERNAL AND EXTERNAL EQUILIBRIUM.
IN THE PAST 20 YEARS, HE EXPLAINED, HONG KONG'S PRIMARY EMPHASIS HAS HAD TO BE ON THE DEVELOPMENT OF OUR EXPORT ORIENTED MANUFACTURING ECONOMY AND THE FISCAL SYSTEM, AND HENCE THE LEVEL OF EXPENDITURE ON PUBLIC SERVICES, HAS HAD TO BE TAILORED TO THE OVER-RIDING NEED NOT TO DAMAGE THAT DEVELOPMENT. THE QUESTION WAS WHETHER THIS POLICY SHOULD CONTINUE TO BE FOLLOWED CONSIDERING PRESENT DAY CIRCUMSTANCES.
SECONDLY, MR. HADDON-CAVE BENT ON, IN VIEW OF CROVING EXPENDITURE COMMITMENTS, COUPLED WITH OUR SPENDING ABILITY HAVING CAUGHT UP WITH OUR ABILITY TO FINANCE SPEND ING, A STRATEGY WAS NEEDED THAT COULD ACHIEVE AI ACCEPTACLE BALANCE BETWEEN SATISFYING SHORT AND MEDIUM TERN SOCIAL ASPIRATIONS AND PERMIT A GROWTH RATE CF THE ECONOMY IN THE LONGER TERN WHICH WOULD SECURE THE COMMUNITY'S FUTURE.
FOR THIS