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WEDNESDAY, MARCH 1, 1989
"DESPITE THE NEED TO CONTROL THE GROWTH OF PUBLIC SPENDING,
I HAVE BEEN ABLE TO PROVIDE FOR SIGNIFICANT IMPROVEMENTS IN SOME PUBLIC SERVICES. WE PLAN TO SPEND NEARLY $12 BILLION ON HEALTH AND WELFARE, AN INCREASE OF 12 PER CENT. EXPENDITURE ON EDUCATION WILL INCREASE TO $13 BILLION AND ON HOUSING TO NEARLY $11 BILLION. SPENDING IN THESE THREE AREAS ALONE WILL REPRESENT 45 PER CENT OF OUR TOTAL BUDGET. AND EXPENDITURE ON COMMUNITY RELATIONS AND ON THE ENVIRONMENT, TRANSPORT AND WATER SUPPLIES WILL ALL INCREASE. THIS UNDERLINES OUR CONTINUING COMMITMENT TO IMPROVING THE QUALITY OF LIFE IN HONG KONG.
"FIVE YEARS AGO THE STATE OF OUR PUBLIC FINANCES OBLIGED US TO RAISE SALARIES AND PROFITS TAX RATES. TODAY OUR REVENUE REFLECTS HONG KONG'S RECENT ECONOMIC SUCCESS, AND I AM PLEASED TO BE ABLE TO TELL YOU THAT I AM NOW IN A POSITION TO COMPLETE THE PROCESS OF RESTORING THESE DIRECT TAXES TO THEIR 1983 LEVELS. THIS MEANS THAT THE STANDARD RATE OF TAX FOR SALARIES WILL BE 15 PER CENT AND FOR CORPORATE PROFITS 16.5 PER CENT,
"I HAVE ALSO INCREASED A NUMBER OF PERSONAL ALLOWANCES AND HAVE PROPOSED A NEW ALLOWANCE OF $20,000 FOR THOSE PARENTS, SUCH AS WIDOWS OR SINGLE PARENTS, WHO ARE SOLELY OR PREDOMINANTLY RESPONSIBLE FOR THE CARE OF DEPENDENT CHILDREN. I CONSIDERED THAT THIS GROUP DESERVED SOME ADDITIONAL RELIEF.
"AND IN ORDER TO FOSTER THE DEVELOPMENT OF HONG KONG AS A FINANCIAL CENTRE, I HAVE ALSO DECIDED ΤΟ ABOLISH INTEREST TAX
COMPLETELY.
"ALL THE CONCESSIONS I HAVE PROPOSED, WHEN TAKEN TOGETHER, WILL REDUCE REVENUE BY $1.7 BILLION IN A FULL YEAR. PART OF THIS COST IS, HOWEVER, BEING OFFSET BY THE USUAL ADJUSTMENTS ΤΟ DUTIES, FEES AND CHARGES SO THAT THEIR REAL VALUE MAY BE RESTORED.
EFFECT TO DUE COURSE
"LOOKING AHEAD, WE ARE MAKING GOOD PROGRESS WITH ARRANGEMENTS FOR SEPARATE TAXATION FOR MARRIED WOMEN; MY AIM IS TO GIVE THIS IN FINAL TAX ASSESSMENTS FOR 1989-90. THIS WILL IN GIVE SOME ADDITIONAL RELIEF TO MANY SALARIES TAX PAYERS.
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SOME WOULD NO DOUBT HAVE LIKED ME TO REDUCE TAX
BUT FURTHER IN VIEW OF OUR HEALTHY FINANCIAL STATE,
IN CIRCUMSTANCES, IT WOULD HAVE BEEN UNWISE TO DO SO BECAUSE WELL HAVE ADDED TO INFLATION.
"
RATES STILL OUR PRESENT THIS COULD
"IN PREPARING MY BUDGET I HAVE, AS USUAL, BEEN CONSCIOUS OF THE NEED FOR PRUDENT LONG TERM PLANNING. THE CAPITAL WORKS PROGRAMME IS BEING EXPANDED AND A SUBSTANTIAL SUM HAS BEEN SET ASIDE TOWARDS
DEVELOPMENTS WHICH THE COST OF MAJOR INFRASTRUCTURAL
HONG KONG IS NOT GOING TO REQUIRE IN THE NEXT DECADE AND BEYOND. THE BUDGET CATERS
BUT IS ALSO ONLY FOR THE NEEDS AND AMBITIONS OF THE COMMUNITY TODAY
KONG'S PROGRESS AND PROSPERITY FOR THE
DESIGNED TO FURTHER
HONG
FUTURE.
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"GOOD NIGHT.
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