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FRIDAY, OCTOBER 14, 1994
FIRST, YES WE'VE INCREASED SPENDING IN SOME AREAS. BUT WE HAVE KEPT, AND WILL KEPT, PUBLIC SPENDING GROWTH WITHIN THE BROAD RATE OF GROWTH OF THE ECONOMY AS A WHOLE. WE INTEND THAT PUBLIC SPENDING SHOULD REMAIN BELOW 20 PER CENT AS A PROPORTION OF GDP. WHERE ELSE DOES THAT HAPPEN? IN GERMANY, FOR EXAMPLE, I WAS LOOKING AT THE FIGURE THIS MORNING. ONE OF THE BEST EXAMPLES OF THE SUCCESSFUL MARKET ECONOMY OVER THE LAST 40 YEARS, PUBLIC SPENDING AS A PROPORTION OF GDP IS 2.5 TIMES THE LEVEL THAT IT IS IN HONG KONG, WE CONFIDENTLY PREDICT THAT PUBLIC SPENDING IN 1997 WILL BE LOWER LOWER - AS PERCENTAGE OF GDP THAN IT WAS IN 1982, BEFORE THE JOINT DECLARATION WAS SIGNED. WHERE ELSE IN THE WORLD DO YOU THINK THAT HAS HAPPENED?
י
P
-
A
AND
CUT
TRUTH FROM FACTS DEPARTMENT ONCE AGAIN. WE'VE GROWTH NOT JUST TO
RAISE SPENDING PRUDENTLY, BUT TO CUT TAXES FOR BOTH BUSINESS AND FOR THE WORK-FORCE. IN 1992, HONG KONG HAD THE LOWEST, MOST BUSINESS- FRIENDLY TAX REGIME IN ASIA, MAYBE IN THE WORLD. WELL, SINCE THEN WE'VE CUT TAXES EVEN FURTHER. IDEOLOGICALLY, AS WELL AS GUBERNATORIALLY, WHILE I BELIEVE THAT YOU HAVE TO KEEP A BALANCE BETWEEN SENSIBLE SPENDING AND TAXES, I AM UNSHAKEABLY OF THE VIEW THAT THE MONEY WE TAX IS YOUR MONEY, AND THAT YOU USUALLY SPEND IT MORE SENSIBLY THAN WE DO. I AM WHOLLY AGAINST USING TAXES FOR SOCIAL OR ECONOMIC ENGINEERING. SO WE'VE CUT TAXES TWO YEARS RUNNING AT THE SAME TIME WE'VE PUT MONEY INTO OUR RESERVES AS WELL. WE PROFITS TAX BY ONE PER CENT. WE RAISED ALLOWANCES FOR FAMILIES FOR SINGLE TAXPAYERS BY 56 PER CENT. WE TOOK 420,000 PEOPLE OUT THE TAX NET THIS YEAR AND 250,000 LAST. WE CUT THE TAX BURDEN 1.13 MILLION THIS YEAR AND FOR 1.2 MILLION LAST. WE'VE INCREASED PROPORTION OF THE WORKING POPULATION WHO PAY NO TAX AT ALL BY ABOUT ONE FIFTH, TO ALMOST SIX OUT OF EVERY 10. WE'VE CUT THE PROPORTION PAYING THE FULL RATE FROM SIX PER CENT TO TWO PER CENT IN THE LAST TWO YEARS. HOW'S THAT FOR SOCIALISM? ONLY TWO PER CENT OF THE WORKING POPULATION, TWO PER CENT, PAY A TOP RATE OF TAX OF 15 PER CENT. THAT'S THE SORT OF WEALTH DISTRIBUTION THAT I AM KEEN ON, BECAUSE IT FETCHES UP DISTRIBUTING MORE WEALTH TO MORE PEOPLE.
AND
OF
FOR
THE
LAST POINT ABOUT TAX AND SPENDING. IF A MARKET ECONOMY IS GOING то SURVIVE AND CONTINUE TO PROSPER IT HAS TO SHOW THAT IT IS SOCIALLY RESPONSIBLE. IF WE SAY TO PEOPLE IN THIS COMMUNITY, WE WANT TO GO ON GROWING - BUT AS FOR YOUR AMBITIONS FOR BETTER HEALTH
CARE, FOR BETTER TEACHERS, FOR A BETTER ENVIRONMENT, WELL FORGET ABOUT THEM, WE'RE GOING TO SQUIRREL ALL THE MONEY AWAY; IF WE WERE TO SAY THAT, IT WOULD BE A RECIPE FOR SOCIAL TENSION, FOR DISHARMONY, FOR UNDERMINING FAITH IN OUR ECONOMIC SYSTEM AND IN THE MORALITY AS WELL AS THE AUTHORITY OF OUR SYSTEM OF GOVERNMENT. I DON'T BELIEVE THAT THERE IS ANY COMMUNITY IN THE WORLD WHERE IT SHOULD BE EASIER TO PUT THE CASE FOR PRUDENT SPENDING, FOR ADAM SMITH AND FOR MILTON FRIEDMAN. BUT THAT REQUIRES US. TO ACCEPT THAT MEN AND WOMEN ARE NOT JUST ECONOMIC VARIABLES, THEY HAVE SOCIAL AND POLITICAL - POLITICAL WITH A SMALL "P"
AMBITIONS AND HOPES WHICH WE CANNOT IGNORES.
So,
WE'VE GOT A TIP TOP ECONOMIC RECORD. BUT WE ARE NOT COMPLACENT. WE MAY BE FOURTH IN THE WORLD COMPETITIVENESS LEAGUE. HIGHER THAN ANY EUROPEAN COUNTRY. BUT WE WANT TO BE THIRD, OP SECOND, OR BEST OF ALL FIRST.
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