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WEDNESDAY, FEBRUARY 25, 1981
+ACCORDINGLY, AS YOUR EXCELLENCY FORESHADOWED RECENTLY, THE GOVERNMENT INTENDS SHORTLY TO RECONVENE THE ORIGINAL WORKING PARTY TO REVIEW THE HOME OWNERSHIP SCHEME AND THE HOME OWNERSHIP (PRIVATE SECTOR PARTICIPATION) SCHEME.
+THE INTENTION WOULD BE TO BUILD MORE FLATS, IF FEASIBLE, TO MEET THE DEMONSTRATED ASPIRATIONS OF THE INCOME CLASS COVERED BY THESE SCHEME FOR HOME OWNERSHIP (AND POSSIBLY TO WIDEN THE IR AMBIT A LITTLE).+ SIR PHILIP ADDED.
FS CAUTIONS AGAINST USING PRICE CONTROLS TO FIGHT INFLATION
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THE GOVERNMENT SHOULD NOT INTERVENE TO HOLD DOWN LAND PRICES TO COMBAT INFLATION, NOR SHOULD IT CONTROL RENTS OF COMMERCIAL AND INDUSTRIAL PROPERTY, THE FINANCIAL SECRETARY TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
SPEAKING ON INFLATION IN HIS BUDGET REPORT, THE HON SIR PHILIP HADDON-CAVE SAID THE HONG KONG ECONOMY WOULD PROBABLY HAVE TO LIVE WITH IMPORTED INFLATION FOR SOME TIME TO COME INTO THE 1980'S, AND CERTAINLY UNTIL LATE 1982 OR EVEN 1983.
HE SAID: +TO THE EXTENT THAT OUR GROWTH MOMENTUM HAS TENDED IN RECENT YEARS TO BE ACCOMPANIED, FROM TIME TO TIME, BY A MEASURE OF DOMESTICALLY GENERATED INFLATION, THE LINK BETWEEN GROWTH AND INFLATION HAS BEEN DIFFICULT TO BREAK, BUT WE MUST SEEK TO ENSURE THAT OUR POLICIES INCLUDING, OF COURSE, OUR BUDGETARY POLICIES, AND OUR INSTITUTIONAL ARRANGEMENTS DO NOT CEMENT THE LINK.+
ANY ANTI-INFLATIONARY ACTION ON GOVERNMENT'S PART WHICH INVOLVED ABANDONING, EVEN IN PART, OUR COMMITMENT TO FREE TRADE AND TO THE FREE FLOW OF FUNDS ACROSS THE EXCHANGES WOULD SEVERELY DAMAGE THE GROWTH RATE OF THE ECONOMY AND SIMPLY COULD NOT BE CONTEMPLATED, HE SAID.
SIR PHILIP COULD NOT SEE ANY SCOPE FOR REMEDIAL ACTION AGAINST INFLATION WHICH INVOLVED ANY FORM OF PRICE CONTROL OR SUBSIDY IN RELATION TO THE PRICES OF IMPORTED INPUTS AND DOMESTIC EXPORTS.
THE COST OF SUCH ACTION, HE SAID, WOULD BE REFLECTED IN LOWER REAL INCOMES IN HONG KONG AND, EVEN IF SUCH MEASURES WERE GATT-ABLE, MIGHT WELL RESULT IN RETALIATORY ACTION BEING TAKEN AGAINST US.
EXPLAINING HIS STAND AGAINST LAND PRICE CONTROL, SIR PHILIP SAID THERE WERE TWO QUESTIONS TO BE FACED
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