WEDNESDAY, APRIL 17, 1991
WHERE THE PROVISION FOR AN INDIVIDUAL HEAD OF EXPENDITURE REQUIRED SUPPLEMENTING DURING THE YEAR, THIS COULD BE ARRANGED ONLY WITH THE PRIOR SPECIFIC APPROVAL OF FINANCE COMMITTEE.
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AS REGARDS VARIATIONS IN THE COST OF CAPITAL PROJECTS UNDER THE CAPITAL WORKS RESERVE FUND WHETHER AS A RESULT OF COST INCREASES OR, AS IN MANY CASES, CHANGES TO SPECIFICATIONS EACH OF THESE ALSO REQUIRED FINANCE COMMITTEE APPROVAL, THE PINANCIAL SECRETARY
EXPLAINED.
SIR PIERS SAID FAR FROM SEEING THIS ARRANGEMENT AS A FLAW IN THE SYSTEM, AS SOME MEMBERS SUGGESTED, HE COMMENDED IT TO THE COUNCIL AS AN IMPORTANT AND SENSIBLE PART OF THE MACHINERY OF FINANCIAL MANAGEMENT.
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*IT PLACES THE INDIVIDUAL HEADS OF ESTIMATES SECURELY ON A FACTUAL BASIS OF CURRENT PRICES AND ENABLES THE FINANCE COMMITTEE EXERCISE FIRM AND COMPREHENSIVE CONTROL OVER EXPENDITURE.
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**THE ALTERNATIVE METHOD PROPOSED IN THE DEBATE BY AT LEAST MEMBERS WOULD TO SOME EXTENT DIMINISH FINANCE COMMITTEE'S POWERS IN THIS REGARD," HE SAID.
ON THIS YEAR'S BUDGET PROCESS, THE FINANCIAL SECRETARY SAID THE INITIAL POSITION SHOWN IN THE CALCULATIONS WAS A MARGINAL DEFICIT.
"GIVEN THE MAJOR PROGRAMMES OF EXPENDITURE CONTEMPLATED OR ALREADY IN HAND, I CONSIDERED THAT I SHOULD AIM TO CONVERT THAT DEFICIT INTO A MODEST SURPLUS BY RAISING ADDITIONAL REVENUE," HE SAID.
THE CHOICE INSOFAR AS REVENUE RAISING MEASURES WAS CONCERNED WAS THEN BETWEEN DIRECT AND INDIRECT TAXATION, SIR PIERS SAID.
"I DECIDED AGAINST INCREASING DIRECT TAXES.
"THIS YEAR, AND IN OUR PRESENT CIRCUMSTANCES, AN INCREASE IN DIRECT TAX RATES WOULD HAVE SET A NEW HIGHER PLATEAU; IT WOULD ALSO HAVE SENT THE WRONG MESSAGE TO INVESTORS LOCALLY AND OVERSEAS THOSE WHO CREATE WEALTH AND JOBS AND MIGHT HAVE SLOWED DOWN OUR ECONOMIC RECOVERY,
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"ANY DEFLATIONARY EFFECT WOULD NOT HAVE BEEN FELT FOR AT LEAST 12 MONTHS, HE SAID.
THE FINANCIAL SECRETARY POINTED OUT THAT DURING HIS TERM OF OFFICE, HIS POLICY HAD BEEN TO BRING DIRECT TAX RATES DOWN AND HE WOULD NOT REVERSE THIS POLICY UNLESS IT WERE REALLY NECESSARY.
"THE SITUATION THIS YEAR DID NOT IN MY VIEW JUSTIFY SUCH A SERIOUS STEP, HE SAID,
SJR PIERS SAID HE THEREFORE DECIDED TO GO FOR INCREASES IN A NUMBER OF INDIRECT TAXES AND WAS HELPED BY A PROPOSAL ΤΟ INCREASE SHARPLY THE TAX ON TOBACCO FOR HEALTH REASONS.
HE NOTED THAT SOME HAD ACCUSED HIM OF CYNICISM AND HYPOCRISY, SAYING THAT HE WAS ONLY INTERESTED IN THE REVENUE.
"NO SO