THURSDAY, MARCH 5, 1992
5
MR
THE
HANDSOME
·
QUESTION:
ABOUT MACLEOD, YOU'VE TALKED RESERVES, THAT BY 1996-97 IT IS GOING TO BE $71 BILLION AND IT AMOUNTS TAKEN INTO TO SOME 40% OF THE TOTAL EXPENDITURE, BUT YOU HAVEN'T
LAND FUND THE AMOUNTS THAT WE ARE GOING TO GET FROM THE SAR ACCOUNT WHICH SIR PIERS JACOBS ESTIMATED TO BE SOMETHING LIKE $70 BILLION BY 1997.
A SO IT MEANS, BY THAT YEAR, YOU ARE GOING TO HAVE RESERVE WHICH WILL BE EQUIVALENT TO 80% BASED ON YOUR CALCULATIONS OF THE TOTAL EXPENDITURE. SO IT COMES BACK TO THE QUESTION: YOU NEED SUCH A BIG CUSHION? IT'S NOT 40% AS LOW AS YOU DESCRIBE SO IS THERE ANY HIDDEN AGENDA? THERE WAS TALK THAT HONG KONG CONCERNED ABOUT A POSSIBLE CONFIDENCE CRISIS CLOSER TO 1997, THAT SOMETHING THAT YOU HAVE IN MIND, THAT WE NEED TO KEEP RESERVES?
IT SET IT'S
—
―
WHY DO
IS
SO IS SUCH BIG
I OF COURSE GOVERNMENT IS YOU KNOW
SECRETARY: FINANCIAL
NO, THERE IS NO HIDDEN AGENDA. MENTIONED THE LAND FUND IN MY SPEECH, I DIDN'T FORGET IT. DOESN'T COME INTO THE RESERVES UNTIL AFTER THE SAR
UP, SO WE HAVE TO PLAN OUR FINANCES OVER THE PERIOD
NOT
THAT WE HAVE JUST THE LAST YEAR BUT OVER THE PERIOD SO SUFFICIENT CUSHION TO DEAL WITH UNFORESEEN DEVELOPMENTS, AND OF COURSE HAVE LEFT, AT LEAST, THE 25 BILLION HANDOVER. WE CAN'T START COUNTING
LAND FUND UNTIL AFTER THAT. THE
MUCH IN CERTAINLY, WE HAVE IT VERY MUCH
IT IS MIND THAT IT WILL HELP TO GET THE SAR OFF TO A GOOD START BUT
AVAILABLE TO US NOT
LET'S SAY IF THERE IS A
ECONOMIC SERIOUS DOWNTURN IN 1995 AND IF WE HAD SUCCUMBED TO THE TEMPTATION TO OUR RESERVES ON ANY NUMBER OF POSSIBLE CONCESSIONS, WE WOULD THEN BE FACED
AND WITH AN EXTREMELY DIFFICULT POSITION. AND I THINK TO TRY
A TIME SUDDENLY, IN THE SHORT TERM, REMEDY A REVENUE DEFICIENCY AT
TO PLAN WHEN BY DEFINITION WE HAVE A PROBLEM, IS NOT A SENSIBLE WAY ANY GOVERNMENT'S FINANCES, AND CERTAINLY NOT THIS GOVERNMENT'S FINANCES. BEARING IN MIND ALSO THAT WE DO NOT HAVE THE OPTION, IF WE WANTED IT, OF CUSHIONS BY HUGE AMOUNTS OF BORROWING. OUR STYLE, IT'S NOT APPROPRIATE.
QUESTION:
-
—
SPEND
EVEN
THAT'S NOT
JUST DO
BUT BEARING IN MIND, AS YOU SAID NOW, THE RANGE OVER THE PAST FEW YEARS IS BETWEEN 50% TO 90%, SO
COMPARATIVELY YOU THINK HAVING SOMETHING LIKE 80% IS VERY SUBSTANTIAL SPEAKING, AND YOU DON'T NECESSARILY HAVE TO RESORT TO THAT PARTICULAR PATH?
FINANCIAL SECRETARY:
THE
IF WELL, WHAT WE HAVE IS - REVENUE MEASURES ONCE THEY ARE PASSED AND IMPLEMENTED, YOU KNOW BEGIN
80% TO REDUCE THE REVENUE – WE HAVE RESERVES WHICH WILL DECLINE FROM
I SAY I FIND THAT OF EXPENDITURE TO 40% OF EXPENDITURE OVER A PERIOD. WHAT THAT IS
I AM PLANNING
ON.
I ACCEPTABLE,
WHAT
IS ACCEPTABLE
THAT WE SHOULD PLAN FOR A VERY MUCH LOWER LEAVE OURSELVES VERY LITTLE ROOM FOR MANOUEVRE IF THINGS THEY CAN DO, WHICH MEAN WE ARE SUDDENLY SHORT OF REVENUE.
QUESTION:
AND
DON'T FIND FIGURE HAPPEN, AS
BUT DO YOU AGREE THAT IS
ACTUALLY 80% AND NOT 40% AS YOU SAID, BECAUSE
FINANCIAL SECRETARY:
NO!
QUESTION:
BECAUSE IT'S JUST THREE
MONTHS BEFORE YOU CAN GET THE SAR LAND FUND.
/FINANCIAL SECRETARY