WEDNESDAY, FEBRUARY 24, 1982
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+AGAINST THIS BACKGROUND I BELIEVE THAT IT REMAINS PRUDENT AGAIN TO REDUCE TAXATION. THIS IS POSSIBLE DESPITE ENORMOUS SPENDING ON HOUSING AND PUBLIC WORKS PROJECTS GENERALLY. IN FACT ON APRIL 1, 1982 OUTSTANDING COMMITMENTS FOR THE PUBLIC WORKS PROGRAMME WILL AMOUNT TO AT LEAST $23 BILLION. SO FAR AS THE VITALLY IMPORTANT PUBLIC HOUSING RENTAL PROGRAMMES ARE CONCERNED THE FORECAST OF PRODUCTION IN THE NEXT FOUR YEARS IS 148 900 FLATS, WHICH IS A CONSIDERABLE INCREASE ON THE LAST FOUR YEARS. THIS FIGURE DOES NOT INCLUDE HOUSING SOCIETY, HOME OWNERSHIP SCHEME, AND PRIVATE SECTOR PARTICIPATION FLATS. THUS TOTAL PUBLIC SECTOR PRODUCTION SHOULD AVERAGE 42 700 PER YEAR.
+BUT TO RETURN TO THE TAX POSITION. I DO NOT THINK THAT IT IS GENERALLY APPROPRIATE FOR THE GOVERNMENT TO RAISE TAXES WHEN IT DOES NOT NEED THE MONEY EITHER FOR ITS IMMEDIATE EXPENDITURE REQUIREMENTS OR IN ORDER FURTHER TO STRENGTHEN PRUDENT RESERVES.
+I HAVE THUS MADE PROPOSALS FOR TAX CONCESSIONS IN FOUR MAJOR AREAS. THE FIRST IS DESIGNED TO HELP INDUSTRIALISTS. IT IS CLEARLY IMPORTANT TO ENCOURAGE THE EXPANSION OF INVESTMENT IN NEW EQUIPMENT. THEREFORE PROPOSE TO INCREASE CONSIDERABLY THE INITIAL DEPRECIATION ALLOWANCE FROM 35 PER CENT TO 55 PER CENT. I PROPOSE ALSO TO AMEND CURRENT LEGISLATION ON THE INDUSTRIAL BUILDINGS ALLOWANCE TO INCLUDE THE DEVELOPER'S PROF IT ELEMENT. THIS WILL PROMOTE INVESTMENT IN ACCOMMODATION FOR PLANT, EQUIPMENT AND NOT LEAST THE WORKERS WHO OPERATE THE MACHINES, IN MODERN AND EFFICIENT FACTORY PREMISES.
+THE SECOND AREA INVOLVES THE CONTROVERSIAL ISSUE OF INTEREST TAX. 1 PROPOSE TO EXEMPT FOREIGN CURRENCY DEPOSITS PLACED WITH LICENSED BANKS AND REGISTERED AND LICENSED DEPOSIT-TAKING COMPANIES FROM INTEREST TAX. I PROPOSE ALSO TO REDUCE THE RATE OF INTEREST TAX ON HONG KONG DOLLAR TIME DEPOSITS WITH BANKS AND DEPOSIT-TAK ING COMPANIES FROM THE PRESENT 15 PER CENT TO 10 PER CENT. THE OUTCOME WILL NEED TO BE STUDIED CAREFULLY, AND WE MAY HAVE TO VARY OUR APPROACH LATER, I BELIEVE THAT THESE MOVES WILL PROMOTE THE GROWTH OF HONG KONG AS A FINANCIAL CENTRE.
+MY THIRD AREA INVOLVES PERSONAL TAXATION. I PROPOSE FIRSTLY AN INCREASE IN THE LEVEL OF PERSONAL ALLOWANCES FROM $15 000 TO $20 500 FOR SINGLE PERSONS, AND FROM $30 000 TO $41 000 FOR MARRIED PERSONS. THE EXISTING SUPPLEMENTARY PERSONAL ALLOWANCES WILL REMAIN UNCHANGED. CONSEQUENTLY THERE WILL BE NO LIABILITY TO TAX FOR A SINGLE PERSON ON A SALARY BELOW $28 000 A YEAR, AND FOR A MARRIED COUPLE WITHOUT CHILDREN BELOW $56 000. SECONDLY PROPOSE AN INCREASE IN THE CHILD ALLOWANCE FROM $7 000 TO $8 000 FOR THE FIRST CHILD AND FROM $5 000 TO $5 500 FOR THE SECOND CHILD. THIRDLY I PROPOSE AN INCREASE IN THE DEPENDENT PARENT ALLOWANCE FROM $7 000 TO $8 000. I BELIEVE THAT THERE ARE FEW OTHER PLACES IN THE WORLD IN WHICH TAX THRESHOLDS ARE SO HIGH THAT THE MAJORITY OF THE ECONOMICALLY ACTIVE ARE EXCLUDED FROM DIRECT TAX.
/+MY FOURTH AREA
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