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THURSDAY, KARCH 29, 1979
+LET US NOT FORGET ALSO, SHE ADDED, THAT IN THESE RELATIVELY EXCITING TIMES WHEN THERE IS A NEW INTEREST IN US AS AN INTERNATIONAL CITY, AS A MEETING PLACE OF EAST AND WEST AND AS A POINT OF ENTRY TO AND EXIT FROM CHINA THAT HONG KONG REMAINS A COMMUNITY IN ITS OWN RIGHT. ITS INTERESTS MUST NOT BE SACRIFICED ON THE ALTAR OF OTHER CONSIDERATIONS.+
MISS DUNN REFERRED TO FOUR ASPECTS OF THE ECONOMY AND GOVERNMENT MANAGEMENT WHICH SHE THOUGHT WERE NOT WELL COVERED BY THE FINANCIAL SECRETARY IN HIS BUDGET SPEECH.
PRICES
ON THE FINANCIAL SECRETARY'S FORECASTS OF PRICE INCREASES IN 1979 OF ONLY NINE PER CENT IN CONSUMER PRICES, AND ONLY EIGHT PER CENT IN THE GENERAL PRICE LEVEL AS MEASURED BY THE GDP DEFLATOR MISS DUNN SAID THESE ARE UNREALISTIC, BECAUSE OF THE POSSIBILITY THAT INSUFFICIENT WEIGHT HAS BEEN GIVEN TO POSSIBLE INCREASES IN OIL PRICES LATER ON THIS YEAR, AND THE FACT THAT THE TRADE DEFICIT FOR THE FIRST TWO MONTHS OF THIS YEAR WAS $400 MILLION MORE THAN FOR THE SAME PERIOD,
ALTHOUGH THE GROWTH RATE OF PUBLIC EXPENDITURE IS TO BE SLOWED DOWN FROM 25 PER CENT IN 1978-79 TO 7.5 PER CENT, IT WILL STILL BE GROWING FASTER THAN THE GDP, SHE SAID.
SHE THEREFORE ASKED IF ENOUGH HAS BEEN DONE TO RESTRAIN DOMESTIC DEMAND, IF THE GROWTH RATE OF PUBLIC EXPENDITURE HAS BEEN SUFFICIENTLY SLOWED DOWN, AND IF FURTHER STEPS WILL BE TAKEN TO CURTAIL PUBLIC EXPENDITURE IF, DURING THE COURSE OF THE YEAR, PRICES TEND TO INCREASE FASTER THAN FORECAST.
MTR AND THE PUBLIC SECTOR
MISS DUNN QUERIED THE FINANCIAL SECRETARY'S CONSISTENT REFUSAL TO INCLUDE THE MTR PROJECT IN THE PUBLIC SECTOR, EVEN THOUGH IT IS A STATUTORY CORPORATION, A WHOLLY-OWNED SUBSIDIARY OF THE GOVERNMENT AND ONE WHOSE LIABILITIES ARE GUARANTEED BY THE GOVERNMENT.+
SHE SAID IT IS MISLEADING NOT TO DO THIS WHEN CONSIDER ING OUR APPROPRIATE BUDGETORY STRATEGY DESIGNED TO STABILISE THE ECONOMY.
SHE POINTED OUT THAT IF NET EXPENDITURE BY THE MTR CORPORATION IS INCLUDED, THE PUBLIC SECTOR WILL BE IN DEFICIT BY ABOUT $2,000 MILLION NEXT YEAR.
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THE BUDGET, THEREFORE, WILL NOT BE AS DISINFLATIONARY AS THE GOVERNMENT CLAIMS, AND THE PUBLIC SECTOR WILL NOT BE CONTRIBUTING AS MUCH AS IT SHOULD TO CORRECT THE IMBALANCE BETWEEN THE DEMAND FOR THE ECONOMY'S OUTPUT AND THE ECONOMY'S ABILITY TO SUPPLY THAT OUTPUT, SHE SAID.
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