XN000022-1975-03-19 — Page 4

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IT”NESDAY, MARGI 19, 1975

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→THE LATTER USES WATER FOR COOKING AND CLEANING AND THAT IS IT, HE SAID. HOWEVER, AN INDUSTRIAL CONSUMER USES WATER FOR PRODUCTIVE PURPOSES AND GENERATES A CHAIN OF ECONOMIC DENEFITS NOT ONLY TO HIMSELF BUT ALSO TO THE GOVERNMENT IN THE FORM OF TAXES AND TO THE COMMUNITY IN THE FORM OF EMPLOYMENT OPPORTUNITIES.◊

MANY PEOPLE, HE WENT ON, QUESTIONED WHY THE GOVERNMENT DID NOT APPROACH THE CHINESE AUTHORITIES FOR MORE WATER SUPPLIES HONG KONG'S CHEAPEST SOURCE OF WATER --ka PARTICULARLY WHEN OIL PRICES TODAY MADE DESALINATION SUCH AN EXPENSE PROCESS.

IF MORE WATER SUPPLIES COULD DE ODTAINED FROM CHINA HE SAID, THE AVERAGE COST OF OUR WATER WOULD BE LOWERED AND THE THREAT OF JEOPARDISING THE COMPETITIVE POSITION OF SOME OF OUR EXPORT-ORIENTED MANUFACTURING INDUSTRIES COULD BE REMOVED.+

DR. CHUNG FULLY SUPPORTED THE FINANCIAL SECRETARY'S PROPOSAL TO RAISE THE ASSESSMENT PERCENTAGE OF THE VALUE OF SUBSIDISED QUARTERS FROM 7-1/2 PER CENT TO 10 PER CENT. IN FACT, HE FELT THE PERCENTAGE SHOULD BE HIGHER AND SHOULD DE INCREASED YEAR DY YEAR UNTIL IT EQUALS THE FULL MARKET VALUE.

HE ALSO SUGGESTED THAT FURTHER CONSIDERATION BE GIVEN TO INCLUDE OTHER BENEFITS IN KIND INTO THE TAXABLE INCOME OF AN EMPLOYEE.

DR. CHUNG FELT THAT THOSE ENJOYING FREE OR SUBSIDISED HOUSING, BOTH WITHIN AND OUTSIDE THE GOVERNMENT SERVICE, WERE DEING UNDER TAXED IN RELATION TO THE COST PAID BY EMPLOYERS FOR SUCH PRIVILEGES.

THIS STATUS IN THE SALARY TAX LAW HAD TWO UNDESIRABLE ASPECTS. →IN THE FIRST INSTANCE, IT IS UNFAIR TO THOSE SALARY EARNERS WHO RECEIVE THEIR TOTAL REMUNERATION IN MONETARY FORM WITHOUT SUCH BENEFITS IN KIND. SECONDLY, IT GIVES THE EMPLOYEES WHO LIVE IN FREE AND SUBSIDISED HOUSING THE INCENTIVE TO PRESS THEIR EMPLOYERS TO PROVIDE OVER-GENEROUS AND OVER-SIZE QUARTENS, HE SAID.

+IN THE CASE OF GOVERNMENT AS AN EMPLOYER, THIS WILL MEAN EXTRAVAGANT USE OF PUBLIC FUNDS.+

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