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WEDNESDAY, MARCH 1, 1989
RESERVES NOT A 'POT OF GOLD'
IT IS WRONG TO LOOK UPON THE GOVERNMENT'S RESERVES AS A "POT OF GOLD" AVAILABLE TO BE SPENT REGARDLESS, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, SAID IN HIS BUDGET SPEECH TODAY (WEDNESDAY).
"OUR BUDGETARY GUIDELINES ARE RELATED ΤΟ THE GROWTH OF THE ECONOMY, AND NOT ΤΟ THE SIZE OF THE RESERVES," HE TOLD THE LEGISLATIVE COUNCIL.
FURTHERMORE, THE GOVERNMENT HAD ΤΟ PROTECT ITS SPENDING PROGRAMMES AGAINST CYCLICAL CHANGES IN REVENUE LEVELS, AND THE GOVERNMENT ALSO HAD CONTINGENT LIABILITIES WHICH HAD TO BE COVERED.
MR JACOBS SAID THE CONSOLIDATED RESERVES WERE EXPECTED TO SHOW A BALANCE OF ABOUT $60 BILLION AT THE END OF 1988-89, RISING TO ABOUT $71 BILLION AT THE END OF 1989-90.
THE MEDIUM RANGE FORECAST SHOWED THAT IN THE PERIOD TO 1992-93, ALTHOUGH THE LEVEL OF RESERVES WOULD BE MORE THAN MAINTAINED
IN REAL TERMS OVER THE FORECAST PERIOD, THE RESERVE BALANCES, WHEN EXPRESSED AS A PERCENTAGE OF ANNUAL SPENDING, WOULD FALL FROM 91 PER CENT TO 87 PER CENT.
HE SAID THE POSITION HAD IMPROVED SINCE LAST YEAR WHEN HE FORECAST THAT THE LEVEL OF RESERVES AS A PERCENTAGE OF ANNUAL EXPENDITURE WOULD FALL TO ABOUT 65 PER CENT BY 1991-92.
"I AM NOT PROPOSING ANY GUIDELINES AS ΤΟ WHAT LEVEL OF RESERVES IS APPROPRIATE. WE ARE COMFORTABLE BUT NOT EXCESSIVELY So," HE SAID.
MR JACOBS ALSO SAID THE GOVERNMENT HAD TO MAKE PROVISION FOR SOME MAJOR INFRASTRUCTURAL PROJECTS THAT WERE LIKELY TO START IN THE YEARS AHEAD, SUCH AS ROAD AND RAIL NETWORKS. PORT DEVELOPMENT AND DRAINAGE AND SEWAGE PROJECTS.
ALSO, IT WAS INCREASINGLY CLEAR THAT HONG KONG NEED A NEW AIRPORT.
WAS GOING TO
THAT WOULD BE A MASSIVE UNDERTAKING INVOLVING NOT ONLY THE AIRPORT ITSELF BUT ALSO A VAST AMOUNT OF INFRASTRUCTURAL DEVELOPMENT SUCH AS ROADS, TUNNELS, POSSIBLY BRIDGES AND PERHAPS A RAILWAY LINK.
BE
"OUR STUDIES, INCLUDING OUR EXAMINATION INTO THE FINANCIAL AND INSTITUTIONAL ARRANGEMENTS, ARE PROGRESSING WELL, AND WE EXPECT TO IN A POSITION TO ANNOUNCE A DECISION BEFORE THE END OF THIS YEAR, SAID.
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HE
IN ORDER TO ANTICIPATE SOME OF THE CONSIDERABLE EXPENDITURE INVOLVED IN INFRASTRUCTURAL DEVELOPMENT, MR JACOBS PROPOSED TO MAKE REGULAR TRANSFERS FROM THE GENERAL REVENUE ACCOUNT ΤΟ APPROPRIATE FUNDS BEGINNING IN THE 1989-90 FINANCIAL YEAR.
/"IN THIS .**.