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17
THURSDAY, MARCH 4, 1993
FS: WELL, ACTUALLY THE MAIN MARKET OF COURSE THAT I'VE BEEN ALERTING PEOPLE TO IS REALLY CHINA AND THE US AND THE MFN ISSUE RATHER THAN WHAT MAY BE HAPPENING IN PLACES LIKE EUROPE. THE MAIN DOWNSIDE RISK IS THAT THE MFN ISSUE WILL NOT BE RESOLVED IN A SATISFACTORY WAY. AS FAR OTHER MARKETS ARE CONCERNED, ACTUALLY I'M FAIRLY OPTIMISTIC ABOUT THE US ECONOMY BUT EUROPE'S PRETTY FLAT, SO THE MAIN SOURCE OF OUR GROWTH AND OF OUR OPTIMISM IS ACTUALLY CHINA AND ASIA.
QUESTION:
NOW A QUESTION FOR MR MACLEOD ABOUT INFLATION. YOU SAY IT IS HARD TO TACKLE INFLATION. NOW THERE ARE SOME ECONOMISTS WHO SAY THAT WITH REGARD TO THE HUGE EXPENDITURE PROPOSED AND TAX-CONCESSIONS, IT WILL ONLY ADD TO INFLATION, BUT IN THE BUDGET THERE ARE NOT ANY CONCRETE PROPOSALS TO TACKLE INFLATION, SO HOW DO YOU VIEW THAT?
FS:
I THINK WE HAVE BEEN VERY FRANK OVER THE YEARS ABOUT INFLATION, THERE IS NO EASY SOLUTION TO INFLATION, THAT IS THE FACT. WHAT WE HAVE BEEN DOING IS, BIT BY BIT DEALING WITH PARTICULAR PROBLEMS AS WE CAN. FOR INSTANCE, I WOULD TAKE THE HOUSING ISSUE WHERE WE HAVE MANAGED, PARTLY THROUGH STAMP
DUTY, PARTLY THROUGH CONTROLS ON CREDIT, TO BRING HOUSE PRICES OR FLAT PRICES DOWN FROM THEIR PEAK. WE HAVE A PROGRAMME FOR IMPORTING LABOUR WHICH HAS SOME EFFECT. WE HAVE AN ADDITIONAL PROGRAMME FOR IMPORTING CONSTRUCTION LABOUR FOR THE AIRPORT PROJECTS. ALL THOSE HELP, BUT WE HAVE TO FACE THE FACT THAT THIS IS PART OF THE PRICE OF OUR SUCCESS. WE HAVE A HEAVY DEMAND, PARTICULARLY ON OUR SERVICE SECTOR, PARTLY STEMMING FROM OUR OWN SUCCESS IN INVESTING IN CHINA, AND WE MUST CONTINUE TO DO WHAT WE CAN, BUT THERE IS NO MAGIC SOLUTION IN THE BUDGET, ANY MORE THAN THERE WAS IN THE LAST BUDGET.
QUESTION:
GOOD MORNING, FINANCIAL SECRETARY. I HAVE A QUESTION TO ASK YOU. YESTERDAY, AT LEGCO, YOU SAID THAT BY JULY, PUBLIC ASSISTANCE AND DISABILITY ALLOWANCES WOULD BE INCREASED SO THAT FOR A SINGLE PERSON HE WOULD RECEIVE ON AVERAGE $2,000. WHAT DO YOU MEAN BY $2,000 PER HEAD ON AVERAGE? SO IT IS ABOUT CALCULATION OF PUBLIC ASSISTANCE. SO ON AVERAGE $2,000 PER PERSON, WHAT DO YOU MEAN BY THAT? ALSO, I WOULD LIKE TO KNOW, FOR A SINGLE PERSON, NOW THE RATE IS $825, SO BY JULY, ACCORDING TO YOUR VIEW, WHAT WOULD BE THE ADJUSTMENT, HOW MUCH WOULD IT BE AFTER ADJUSTMENT THAT IS? SO ABOUT PUBLIC ASSISTANCE, MR MACLEOD, CAN YOU TAKE THAT UP?
FS:
YES. WHAT IS HAPPENING ON PUBLIC ASSISTANCE IS TWO THINGS. FIRST OF ALL THERE IS THE NORMAL INFLATION INCREASE WHICH WILL BE COMING UP IN THE NEXT FEW WEEKS, AND THEN ADDED ON TO THAT IS A REAL INCREASE IN THE RATES WHICH WAS ANNOUNCED IN THE GOVERNOR'S SPEECH AND WHICH WILL COME INTO EFFECT IN JULY THIS YEAR. SO TAKING THOSE TWO TOGETHER, THE AVERAGE PAYMENT FOR A SINGLE PERSON WILL BE $2,000, AVERAGE SIMPLY MEANS AVERAGE. AS YOU KNOW, RECIPIENTS RECEIVE NOT ONLY A BASIC RATE BUT ALSO A NUMBER OF ALLOWANCES, FOR EXAMPLE, THEY RECEIVE SOMETHING FOR THEIR RENT, SO WE HAVE SIMPLY TAKEN THE AVERAGE PAYMENT. THAT IS ENTIRELY FAIR BECAUSE WE HAVE CHECKED THAT ONLY ABOUT ONE PER CENT OF RECIPIENTS RECEIVE THE BASIC RATE ALLOWANCE WITH NOTHING ELSE ADDED. THAT IS WHY WE ARE NOW CALLING IT "COMPREHENSIVE" PAYMENT, BECAUSE IT IS QUITE MISLEADING TO CONDUCT A DEBATE ON THE BASIS OF THE BASIC RATE. THE AVERAGE PAYMENT FOR A FAMILY OF FOUR WOULD BE $5,880
/QUESTION