FS:
36
WEDNESDAY, MARCH 3, 1993
WELL I THINK HARDLY ANYONE'S TALKING ABOUT 12 ΤΟ 13 PER CENT INFLATION, I HOPE THEY'RE NOT. WHAT WE'RE TALKING ABOUT IS INFLATION OF AROUND 9.5 PER CENT THIS YEAR. REMEMBER THIS, THAT THE PARTICULAR EXPANSION OF SPENDING WHICH I WAS TALKING ABOUT IN THOSE EXPENDITURE PROPOSALS WAS NEARLY ALL NON-RECURRENT AND MANY OF THEM ARE SPREAD OVER A PERIOD OF YEARS ALTHOUGH THE MONEY MAY GO OUT OF MY PARTICULAR ACCOUNTS IN ONE YEAR, IT WILL ONLY GET INTO THE ECONOMY OVER A PERIOD OF YEARS AND THAT'S INTO A CONSTRUCTION INDUSTRY WHICH IS PRESENTLY UNDERUSED. TENDER PRICES ARE EXTREMELY GOOD AT THE MOMENT, CONTRACTORS ARE CRYING OUT FOR MORE PROJECTS. SO WE HAPPEN TO BE EXTREMELY FORTUNATE THAT WE CAN PLOUGH A BIT MORE MONEY INTO CAPITAL PROJECTS WITHOUT, I THINK WITHOUT TOO MUCH INFLATIONARY EFFECT. WE'RE ALSO LUCKY OF COURSE, AS WE'VE SAID, IT'S NOT SOMETHING I'VE INVENTED, FOR MANY YEARS, WE'RE LUCKY THAT THE EFFECT OF GOVERNMENT EXPENDITURE IS NOT ALL THAT GREAT ON THE ECONOMY. I MEAN WE'VE DELIBERATELY THIS AS A SMALL PART OF GDP, UNDER 20 PER CENT OF GDP. SOMEWHERE LIKE UK WOULD BE ABOUT 45 PER CENT OF GDP, SO THE EFFECTS OF OUR SPENDING DECISIONS ARE FAR LESS THAN IN THE CLASSIC DEVELOPED ECONOMY. FORTUNATELY FOR ME, IT'S ALSO EXTREMELY OPEN SO THAT EFFECTS OF ANY ADDITIONAL SPENDING, LET'S SAY THE SPENDING WHICH MIGHT RESULT FROM THE TAX CONCESSIONS, SOME OF THAT WILL BE SAVED, SOME OF IT WILL BE SPENT, WILL PARTLY FIND ITS WAY VERY QUICKLY INTO IMPORTS WHICH IS NOT IN ITSELF INFLATIONARY.
QUESTION:
KEPT
WHEREAS ECONOMIC
MR MCLEOD, LAST YEAR YOU HAD A BENEFIT THAT YOU WANTED TO PASS ON TO THE CINEMA INDUSTRY AND THE CINEMA INDUSTRY FAILED TO PASS THAT BENEFIT ON TO THE PEOPLE AND YOU WERE ASKED A QUESTION ABOUT THIS IN LEGCO AND YOU SAID IN AN EVERY SO SLIGHTLY THREATENING MANNER, WELL THERE'S ALWAYS NEXT YEAR'S BUDGET. NOW NEXT YEAR'S BUDGET HAS
COME, BUT YOU HAVEN'T GOT THE CINEMA INDUSTRY AT ALL. ARE YOU FEELING SO BENEVOLENT THAT YOU'RE GOING TO LET THEM OFF WITH THIS ONE?
FS:
THAT
WELL, IT'S ACTUALLY QUITE DIFFICULT TO KNOW EXACTLY WHAT RESULT YOU EXPECT FROM A TAX CONCESSION. SOME WOULD ARGUE AND I THINK THE CINEMA INDUSTRY WOULD PROBABLY ARGUE THAT NOT TO INCREASE CHARGES AT A TIME OF I MUST ADMIT, FAIRLY HIGH INFLATION, IS A BENEFIT IN ITSELF. IT SO HAPPENS WITH THE COSMETICS INDUSTRY THAT THEY HAVE BEEN I THINK FAR SIGHTED ENOUGH TO ACTUALLY AGREE TO REDUCE PRICES AND I THINK WILL BE HELPFUL, IN A MODEST WAY, BUT IT WILL BE HELPFUL. I ALSO AT THE TIME ON THE CINEMAS THERE WAS AN ATTEMPT TO MAKE OUT THERE'D BEEN NO EFFECT AT ALL. I DON'T THINK THAT WAS TRUE. I THINK THE CINEMA OPERATORS BY AND LARGE, DID THEIR BEST TO PASS ON THE BENEFITS, SO NO I DON'T THINK THERE'S A SITUATION WHERE I HAVE TO, IT WERE, PUNISH CINEMA OPERATORS AND I'M ALL FOR SIMPLIFYING THE SYSTEM.
THINK THAT
AS
TAX
QUESTION:
MR MACLEOD, HOW DO YOU SUPPOSE CHINA WILL REACT TO ALL THESE HANDOUTS THIS YEAR AND A DEFICIT BUDGET AS WELL?
BIG
/FS: