WEDNESDAY, FEBRUARY 23, 1983
39
TELEVISION TALK ON BUDGET
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THE FINANCIAL SECRETARY, THE HON JOHN BREMRIDGE, SPOKE ON THE 1983/84 BUDGET IN A TELEVISION BROADCAST THIS (WEDNESDAY) EVENING.
THE FOLLOWING IS THE FULL TEXT OF HIS TALK:
GOOD EVENING
+1 WOULD LIKE TO TALK TO YOU ABOUT THE BUDGET FOR 1983-84 WHICH I INTRODUCED INTO THE LEGISLATIVE COUNCIL THIS AFTERNOON.
+HONG KONG'S PROSPERITY DEPENDS ON OUR EXPORT TRADE. LAST YEAR WITH THE WORLD IN PROLONGED RECESSION OUR EXPORTS DID NOT DO WELL BECAUSE CONSUMERS IN OUR MAIN MARKETS EITHER COULD NOT AFFORD TO BUY MORE OR WERE RESTRAINED BY PROTECTIONISM. WE ALSO EXPERIENCED THE TERMINAL PHASES OF A PROPERTY BOOM AND BUST, RESULTING LARGELY FROM SHORT-SIGHTED SPECULATION. IN ADDITION WE WERE AFFLICTED BY POLITICAL UNCERTAINTY, WHICH PERMEATED THE FINANCIAL SECTORS.
+THUS OUR ECONOMY FARED LESS WELL THAN PREDICTED AND GDP GREW BY ONLY 2.4 PER CENT, THOUGH THIS IS MORE THAN MOST OTHER PLACES IN THE WORLD. IN PARTICULAR THE RATE OF INFLATION FELL TO 10.6 PER CENT AND WE HAD NO MAJOR UNEMPLOYMENT. I AM, HOWEVER, WELL AWARE OF THE PROBLEMS OF THE UNEMPLOYED AND UNDEREMPLOYED, AND I HOPE THAT A REVIVING ECONOMY WILL IMPROVE THEIR LOT. AT PRESENT I KNOW THEY ARE SUFFERING.
+HAVING EXPERIENCED BUDGETARY SURPLUSES FOR MANY YEARS THERE WAS A LARGE DEFICIT OF $3.8 BILLION IN 1982-83. MY FIRST FORECAST FOR 1983-84, AFTER RESTRICTING THE GROWTH OF GOVERNMENT SPENDING, WAS AN INTOLERABLE $6.2 BILLION, THE NEW SITUATION RESULTS FROM A SHARP FALL IN THE CAPITAL REVENUE EXPECTED FROM LAND SALES.
+WE HAVE FISCAL RESERVES (OR SAVINGS) OF ABOUT $18 BILLION BECAUSE A FAIR PORTION OF THE ESCALATION IN LAND PRICES OVER RECENT YEARS HAS BEEN TRANSFERRED TO THE PUBLIC PURSE TO BE USED IN DIFFICULT TIMES. THOSE TIMES ARE NOW WITH US, AND I BELIEVE IT WILL BE INTELLIGENT TO USE PART OF OUR RESERVES FOR TWO YEARS ANYWAY, MEANING 1982-83 AND 1983-84. TO MEET DEFICITS WE HAVE $11 BILLION ACTUALLY AVAILABLE, AFTER ALLOWING FOR CONTINGENCIES SUCH AS GOVERNMENT GUARANTEES.
+ I THEREFORE INTEND TO MEET THE ESTIMATED DEFICIT OF $6.2 BILLION NEXT FINANCIAL YEAR BY TAKING HALF OUT OF THE RESERVES AND BY COVERING THE OTHER HALF WITH INCREASED TAXATION. THIS SEEMS A SENSIBLE MIDDLE COURSE.
/+IT IS