13
WEDNESDAY, APRIL 26, 1989
MR LI SAID THAT HONG KONG MUST BE CLEAR-SIGHTED NATURE OF ITS INFLATION.
ABOUT THE
"THE TERRITORY IS PAYING FOR ITS SUCCESS, AS THE FINANCIAL SECRETARY POINTED OUT. BUT INFLATION IS ALSO FUELLED BY HIGHER USER FEES AND INCREASED INDIRECT TAXATION."
HE NOTED THAT HONG KONG IMPORTED INFLATION AS WELL. AND THAT ONE OF THE COSTS OF CURRENCY STABILITY UNDER THE LINKED EXCHANGE RATE SYSTEM WAS THE POTENTIAL FOR INFLATIONARY PRESSURE.
ON SALES TAX, MR LI SAID THAT THE FINANCIAL SECRETARY'S PRESENTATION SHOULD DO MORE THAN EXAMINE JUST HOW THIS TAX WOULD WORK, AND SHOULD CONSIDER HOW THIS TAX RELATED TO OTHER TAXES.
HE THOUGHT THAT, GIVEN THE AMOUNT OF TAX LITIGATION, IT WAS A REVENUE GOOD OPPORTUNITY TO CONDUCT A FULL-SCALE REVIEW OF THE INLAND SYSTEM TO ENSURE ITS SIMPLICITY AND COMPETITIVENESS WERE BEING MAINTAINED.
MR LI SAID THAT WHILE HONG KONG LIKED TO THINK IT HAD A
MIDDLE COMPETITIVE EDGE AS A LOW TAX ENVIRONMENT, FOR THE
CLASS THE LIMITED NUMBER OF DEDUCTIONS AND THE RELATIVELY QUICK PACE OF GRADUATION COULD WIFE OUT ANY INITIAL RATE ADVANTAGE.
HE SAID THAT THE GOVERNMENT SHOULD AVOID REACHING FOR THE TAXPAYERS WALLET WHENEVER IT HAD TROUBLE BALANCING 1TS BOOKS IN A RECESSION.
HE ALSO SAID THAT IF A SALES TAX WAS IMPOSED, IT WAS IMPORTANT THAT THERE WOULD BE TRADE-OFFS.
"IT IS ONE THING TO TAX THE PEOPLE WHO BENEFIT MOST FROM HONG KONG'S PRO-BUSINESS POLICIES. IT IS QUITE ANOTHER MATTER то TAP THE LESS FORTUNATE.
MR LI SAID THAT THE MORE THE GOVERNMENT TAXED THE POPULATION, THE MORE THE POPULATION WAS LIKELY TO BEGIN ASKING WHAT THEY WERE GETTING IN RETURN FOR PAYING THE TAX.
то
STRESSING THAT IT WOULD NOT BE EASY то MAINTAIN A PUBLIC
WAS ADMINISTRATION WHICH ORDINARY PEOPLE FELT
FULLY RESPONSIBLE THEIR NEEDS AND ASPIRATIONS, MR LI SAID THE GOVERNMENT MUST ULTIMATELY RETHINK HOW IT DEPLOYED ITS RESOURCES.
"ALREADY WE HAVE SEEN CIVIL SERVICE GROWTH 50 PER CENT HIGHER THAN THE GOVERNMENT'S OWN TARGET AND TWICE THE INCREASE IN THE SIZE OF THE LABOUR FORCE."
"THIS NOT ONLY ADDS SUBSTANTIALLY TO THE RECURRENT COST OF THE GOVERNMENT, IT ALSO INCREASES INFLATIONARY PRESSURE IN THE ECONOMY.
THE
MR LI FEARED THERE WOULD COME A POINT WHEN SUCH NUMERICAL GROWTH COULD NO LONGER BE SUSTAINED, AND THEREFORE URGED GOVERNMENT TO IMPROVE ITS PROCEDURES AND EMPHASISE EFFICIENT SERVICE.
HE QUESTIONED