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WEDNESDAY, MARCH 23, 1983
TURNING TO THE $6.2 BILLION DEFICIT ESTIMATED FOR THE COMING YEAR, MR WONG NOTED THAT THE FINANCIAL SECRETARY PROPOSED TO MEET THE DEFICIT BY RAISING $3 BILLION IN INDIRECT TAXES, WITH THE BALANCE TO BE PAID OUT OF FISCAL RESERVES.
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OF THE ELEVEN PROPOSALS FOR TAX INCREASES, THE FIRST THREE INCREASES ON LIQUOR, TOBACCO AND HYDROCARBON OIL DUTIES, DRIVING LICENCE AND VEHICLE LICENCE FEES - AMOUNTED TO $2 BILLION WHILE THE REMAINING EIGHT PROPOSALS MAKE UP ANOTHER $1 BILLION.
+WHILE IN PRINCIPLE ENDORSING THE PROPOSED INCREASES, I CANNOT HELP FEELING THAT THE FINANCIAL SECRETARY MUST HAVE CONSIDERED AND REJECTED AN ALTERNATIVE MEANS OF MEETING THE $6.2 BILLION DEFICIT BY RAISING $2 BILLION IN INDIRECT TAXES AND THE BALANCE TO BE PAID OUT OF OUR FISCAL RESERVES,+ HE SAID.
+OBVIOUSLY, OUR RESERVES WOULD BE REDUCED BY A FURTHER $1 BILLION FROM $15.5 BILLION TO $14.5 BILLION.
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+BUT WOULD THAT REALLY MATTER IN THE CONTEXT OF OUR ECONOMY AND IN VIEW OF THE RECORD OF OUR PAST PERFORMANCE?+ MR WONG ASKED.
HE THOUGHT THE BURDEN ON THE CONSUMER WOULD BE CONSIDERABLY LIGHTENED IF THE VERY HEAVY INCREASES IN REGARD TO THE FIRST THREE PROPOSALS WERE TO BE CUT BY 50 PER CENT.
SPEAKING ON THE TWO CONCESSIONS AND THE TAX REFORM, MR WONG OP INED THAT THEY WERE NOT COSMETIC BUT RATHER A GENUINE AND SINCERE CONCERN ON THE PART OF THE FINANCIAL SECRETARY TO LESSEN THE BURDEN OF THE TAXPAYER AND TO IMPROVE THE TAX SYSTEM.
HE ALSO COMMENTED BRIEFLY ON THE EXCHANGE FUND WHICH, HE SAID, WAS ENTIRELY MANAGED FROM HONG KONG.
+OUR FISCAL RESERVES ARE LENT TO THIS FUND AGAINST INTEREST BEARING CERTIFICATES.
+THERE IS THEREFORE NO QUESTION THAT OUR FISCAL RESERVES ARE NOT MANAGED BY OURSELVES AND THEREFORE NOT REALLY AT OUR OWN DISPOSAL.
ON THE ESTIMATED EXPENDITURE FOR 1983-84, MR WONG AGREED WITH THE FINANCIAL SECRETARY'S GUIDELINE IN IMPOSING A CASH LIMIT OF TEN PER CENT TO THE GROWTH RATE IN PUBLIC SECTOR EXPENDITURE AND IN AIMING TO KEEP CIVIL SERVICE GROWTH OVERALL TO BELOW FIVE PER CENT.
HE SAID IT WAS REASSURING THAT DESPITE ADVERSE CIRCUMSTANCES, THE GOVERNMENT WILL NOT CUT BACK ON COMMITTED PROGRAMMES OR ESSENTIAL SERVICES.
HOWEVER, HE EXPRESSED CONCERN THAT AT A TIME WHEN SERIOUS CRIMES WERE ON THE INCREASE, THE EXPANSION OF THE POLICE FORCE IN 1983-84 WOULD BE LIMITED.
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