20
WEDNESDAY, MAY 9, 1990
HE POINTED OUT THAT HE HAD EXPLAINED ON PREVIOUS OCCASIONS THAT WITH OUR SMALL OPEN ECONOMY AND THE NEED FOR EXCHANGE RATE STABILITY WITHIN OUR LINKED EXCHANGE RATE SYSTEM THERE WAS LITTLE SCOPE FOR GOVERNMENT TO PURSUE MONETARY POLICIES TO REGULATE DEMAND.
THE
"GIVEN THE RELATIVELY SMALL SIZE OF THE PUBLIC SECTOR IN THE IS ECONOMY, THE SCOPE FOR APPLYING FISCAL POLICIES TO REGULATE DEMAND ALSO LIMITED. MOREOVER, WIDESPREAD PRICE CONTROLS ARE IMPRACTICABLE IN HONG KONG'S CIRCUMSTANCES AND WOULD PROVE HARMFUL TO THE ECONOMY, SIR PIERS SAID.
"BUT THERE IS ONE THING WE CAN DO. I FULLY AGREE THAT WE TO KEEP GOVERNMENT EXPENDITURE TIGHTLY UNDER CONTROL.
"BY ECONOMISING ON THE USE OF LABOUR RESOURCES WITHIN PUBLIC SECTOR WE CAN ENSURE THAT MORE RESOURCES ARE AVAILABLE TO PRIVATE SECTOR. THIS WILL DO MUCH TO HELP. WE INTEND TO PURSUE AIM VIGOROUSLY," THE FINANCIAL SECRETARY SAID.
NEED
THE
THE
THIS
BUDGET STRATEGY CANNOT PRECISELY MATCH ECONOMIC CHANGES * * * * *
THE GOVERNMENT'S BUDGET STRATEGY CANNOT PRECISELY MATCH YEAR BY YEAR CHANGES IN ECONOMIC CONDITIONS, THE FINANCIAL SECRETARY, THE HON SIR PIERS JACOBS, SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY}, IN CONCLUDING THE DEBATE ON THE BUDGET.
SIR PIERS SAID THE AIM WAS TO PROVIDE FOR STEADY GROWTH ON THE BASIS OF PROJECTED TRENDS IN THE GROSS DOMESTIC PRODUCT, AND THAT CORRECTIVE ACTION TO ACHIEVE THIS AIM TOOK TIME TO WORK THROUGH THE SYSTEM.
"TO SOME EXTENT WE HAVE TO LIVE WITH THE LEGACIES OF THE PAST, HE ADDED.
+++
NOTING THE CONCERN EXPRESSED BY SOME MEMBERS THAT THE GROWTH IN PUBLIC SECTOR EXPENDITURE EXCEEDED GDP GROWTH, THE FINANCIAL SECRETARY SAID OF ALL THE MATTERS RAISED IN THE DEBATE, THIS WAS MOST IMPORTANT.
SIR PIERS POINTED OUT THAT IN THE EARLY 1980'S THE RATE OF GROWTH OF EXPENDITURE EXCEEDED 15PER CENT IN REAL TERMS AND THE PUBLIC SECTOR SHARE OF GDP ROSE TO OVER 19PER CENT, AND THE ECONOMIC RECESSION OF 1982 AND THE REVISED ESTIMATES OF GDP GROWTH REQUIRED CORRECTIVE ACTION.
"WE ENTERED A PERIOD OF LOW GROWTH RATES IN PUBLIC SECTOR EXPENDITURE AND, AS A RESULT, THE PUBLIC SECTOR SHARE OF GDP FELL TO 16PER CENT BY 1984-85.
/"IT FELL