XN000022-1977-04-20 — Page 10

WEDNESDAY, APRIL 20, 1977

OBJECTIVES BEHIND THE BUDGET

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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE TOLD THE LEGISLATIVE COUNCIL TODAY THAT THE 1977-78 BUDGET WAS CONSTRUCTED WITH FOUR OBJECTIVES.

THEY ARE TO PROVIDE FOR A REAL GROWTH RATE OF THE ORDER OF 15 PER CENT TO MAINTAIN HONG KONG'S FISCAL RESERVES AT AROUND $3,700 MILLION AS AT APRIL 1, 1977- TO IMPLEMENT CERTAIN TAX CONCESSIONS AND REFORMS JUSTIFIED IN THEIR OWN RIGHT ON ADMINISTRATIVE OR SOCIAL GROUNDS, AND TO ACHIEVE A BALANCE,' OR NEAR BALANCE, ON MONETARY GROUNDS.

WINDING UP THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, MR. HADDON-CAVE SAID THE OBJECTIVE TO PROVIDE FOR A REAL GROWTH RATE OF THE ORDER OF 15 PER CENT WAS TO MAKE UP FOR THE FACT THAT IN 1976-77 IT WAS ONLY EIGHT PER CENT, AND IN 1975-76 IT WAS ONLY ONE PER CENT AS COMPARED WITH THE GUIDELINE GROWTH RATE OF 10 PER CENT BASED ON HISTORICAL EXPERIENCE.

+1 AM CONFIDENT WE CAN EXCEED THE TEN PER CENT GUIDELINE GROWTH RATE IN 1977-78 WITHOUT SERIOUS IMPLICATIONS FOR THE ECONOMY AND WITHOUT DISREGARDING THE VALUE FOR MONEY CRITERION, HE SAID.

ON THE SECOND OBJECTIVE TO MAINTAIN HONG KONG'S FISCAL RESERVES AT AROUND $3,700 MILLION AS AT APRIL 1, 1977. MR. HADDON-CAVE SAID: +THIS OBJECTIVE HAD REGARD TO THE FACT THAT, AT THIS ENHANCED LEVEL, OUR FISCAL RESERVES ARE NOW ADEQUATE OR, AT ANY RATE, ADEQUATE FOR THE TIME BEING - TO SECURE OUR CONTINGENT LIABILITIES, FINANCE SEASONAL DEFICITS AND COVER ANY SHORT TERM DIFFICULTIES THAT MIGHT ARISE.+

MR. HADDON-CAVE SAID THESE FOUR OBJECTIVES OF THE 1977-78 BUDGET WERE CONSISTENT WITH THE GENERAL OBJECTIVES OF THE BUDGETARY POLICY IN HONG KONG AND HE WAS GRATIFIED BY THE HON. Q.M. LEE'S RECOGNITION OF THE COMPATIBILITY OF SOUND BUDGETARY, FISCAL, ECONOMIC AND MONETARY POLICIES AND THE GOVERNMENT'S PURSUIT OF A BETTER QUALITY OF LIFE, THROUGH PUBLIC EXPENDITURE, FOR THE COMMUNITY AS A WHOLE.

+

/HE SAID:

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