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Wednesday, March 14, 1973
GOVERNMENT URGED TO TAKE STEPS TO CURB INFLATION
Increase In Interest Rate And New Taxes Suggested
The Government was today urged to take immediate and positive
action to curb the dangerous inflationary trends in Hong Kong.
The appeal came from the Hon. Wilfred Wong during the annual
Budget debate.
He warned that the inflation whipped up by the sensational
rise in share and land prices would have "serious consequences" in
raising production costs and would eventually tend to price Hong Kong
products out of the world marketa.
"The vicious cycle has already begun," he declared.
"Therefore,
the cooling down of the economy and the dampening of money supply can
no longer be delayed."
Mr. Tong suggested a number of courses which the Government
could take to remedy the situation.
As the doubling of stamp duty on the transfer of shares
practically had had no cooling effect on the stock market, he said,
consideration should now be given to further raising the rate "as the
present situation looks dangerous."
"The only other way left open is for the Government to exercise
its influence on the bankers, to lead to a gradual but firm restriction of
credit," he added.
This, he explained, could be done by increasing the interest
rate and by reducing the margin for loans on stocks and land.
/In addition,
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