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WEDNESDAY, FEBRUARY 25, 1981
PROPER MANAGEMENT - KEY TO HK'S ECONOMIC DESTINY
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HONG KONG, WITH PROPER MANAGEMENT, WILL FULFIL ITS ECONOMIC AND FINANCIAL DESTINY TO BECOME THE INTERNATIONAL CITY IN THE FAR EAST. IF DUE RESPECT IS PAID TO THE TWIN CONCEPTS OF THE MARKET DISCIPLINED ECONOMY AND THE FREE ENTERPRISE SYSTEM, THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE SAID.
IN HIS BUDGET SPEECH, SIR PHILIP SAID OUR ECONOMY AND PUBLIC FINANCES HAD ACQUIRED. NEW DIMENSIONS SINCE 1975 AND HE HAD NO DOUBT THAT, NOTWITHSTANDING DIFFICULTIES BEYOND OUR CONTROL THAT WERE BOUND TO ARISE FROM TIME TO TIME, BY 1985 YET FURTHER DIMENSIONS WOULD BE ACQUIRED.
ON PUBLIC FINANCE, HE NOTED THAT THE HIGHER PLATEAU OF COMMITMENTS THAT THE GOVERNMENT ENTERED INTO IN 1980-81 IS THE MAXIMUM THAT THE ECONOMY CAN COPE WITH FOR THE TIME BEING, IF PROJECTS IN HAND ARE TO BE COMPLETED WITHIN A REASONABLE TIME FRAME AND, AS MANY OF THESE COMMITMENTS ARE IRREVERSIBLE, AS OUR FISCAL RESERVES ARE FINITE AND HAVE SEVERAL OTHER FUNCTIONS APART FROM MEETING BUDGETARY DEFICITS AND +AS OUR RESERVES OF TAXABILITY ARE NOT UNLIMITED EVEN IN A PURELY FINANCIAL SENSE, WE MUST NOT OVER-EXTEND OURSELVES.+
+ IN SAYING THIS, I AM NOT UNMINDFUL OF THE CRITICAL ROLE OF THE GOVERNMENT'S CAPITAL WORKS PROGRAMMES IN SECURING OUR FUTURE ECONOMIC AND SOCIAL PROGRESS, HE SAID.
HE ALSO POINTED OUT THAT IF GOVERNMENT EXPENDITURE IS ALLOWED TO GROW AT 10 PER CENT, IT MIGHT INCREASE TO $41 000 MILLION BY 1984-85 AT CURRENT PRICES. THIS MIGHT MEAN THAT THE RELATIVE SIZE OF THE PUBLIC SECTOR WOULD INCREASE TO 24 PER CENT WHICH WOULD BE QUITE UNACCEPTABLE.+
HOWEVER, HE SAID THAT IN ORDER TO MAINTAIN THE SERVICES ENVISAGED IN THE DRAFT ESTIMATES, AND TO EXPAND THEM TO MEET DEMAND AT EXISTING STANDARDS, RECURRENT EXPENDITURE AT 1981 PRICES IS LIKELY TO INCREASE FROM AROUND $15 200 MILLION IN 1981-82 TO $19 000 MILLION IN 1984-85. IF OUR PRESENT VERY HIGH LEVEL OF CAPITAL EXPENDITURE OF AROUND $9 500 MILLION AT 1981 PRICE IS MAINTAINED, THIS WILL LEAVE LITTLE ROOM FOR ADDITIONAL EXPENDITURE ON NEW SERVICES FOR OUR FIRST OBLIGATION IS TO MAINTAIN PRESENT SERVICES AND EXPAND THEM TO MEET DEMAND AT EXISTING STANDARDS, SIR PHILIP SAID.
THE FINANCIAL SECRETARY NOTED THAT THE RELATIVE SIZE OF THE PUBLIC SECTOR IS NOW MUCH LARGER THAN FIVE OR TEN YEARS AGO AND THE
IMPACT OF PUBLIC SECTOR DECISIONS ON THE ECONOMY HAS BECOME MORE SIGNIFICANT. THIS WILL REMAIN SO IN THE YEARS AHEAD.
HE ALSO POINTED OUT THAT THE REAL INCOMES PER CAPITA INCREASED VERY RAPIDLY IN THE FIVE POST-RECESSION YEARS AT AN AVERAGE ANNUAL GROWTH RATE OF 8.6 PER CENT AND WILL NOT EXACTLY COME TO A STANDSTILL IN 1981. THIS, HE SAID, ENABLED THE FULFILMENT OF MANY ECONOMIC NEEDS, BUT ACCOMPANIED BY SOME EROSIONS OF TRADITIONAL ATTITUDES AND CERTAINLY BY GROWING ASPIRATIONS. ASPIRATIONS HAVE HAD, AND ARE LIKELY TO CONTINUE TO HAVE, IMPLICATIONS FOR THE PUBLIC SECTOR, HE SAID.
SUCH
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