XN000022-1982-03-24 — Page 18

WEDNESDAY, MARCH 24, 1982

CAUTION URGED ON PUBLIC SECTOR EXPENDITURE

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THE GENEROUS TAX CONCESSIONS PROPOSED IN THE BUDGET WILL FURTHER STIMULATE INDUSTRIAL AND ECONOMIC GROWTH AND CONTRIBUTE TO THE ATTAINMENT OF PUBLIC ASPIRATIONS, THE HON CHARLES YEUNG SAID TODAY.

BUT HE WARNED THAT ITS GOOD EFFECT MIGHT NOT BE SUSTAINED FOR LONG WITHOUT OUR EXERCISING CAUTION IN OUR PUBLIC SECTOR EXPENDITURE.

MR YEUNG SUGGESTED THAT HONG KONG SHOULD FOLLOW THE EXAMPLE OF THE UNITED STATES AND THE UNITED KINGDOM WHERE THE RATE OF EXPANSION OF PUBLIC SECTOR EXPENDITURE WAS BEING REDUCED AS A MEANS OF CORRECTING INFLATIONARY AND RECESSIONARY TRENDS.

HE NOTED THAT ABOUT 80 PER CENT OF TOTAL GOVERNMENT EXPENDITURE ON CAPITAL ACCOUNT WAS ON HOUSING, ROADS AND OTHER PUBLIC WORKS PROGRAMMES WHICH WERE NECESSARY.

IN RECURRENT ACCOUNT, IT WOULD BE ILL-ADVISED TO CUT DOWN ON COMMUNITY, SOCIAL AND OTHER ESSENTIAL SERVICES WHICH DIRECTLY AFFECT THE WELL-BEING AND WELFARE OF THE COMMUNITY, HE SAID.

+ON THE CONTRARY, THE DEVELOPMENT OF SUCH SERVICES MERITS HIGH PRIORITY, HE STRESSED.

MR YEUNG NOTED WITH SOME ALARM THE RATE OF EXPANSION OF THE CIVIL SERVICE, WHICH MADE UP THE LARGEST SINGLE COMPONENT IN RECURRENT EXPENDITURE - ABOUT 35 PER CENT THIS YEAR.

+WHILE ARGUMENTS MAY BE ADVANCED THAT THE EXPANSION IS IN LINE WITH THE HISTORICAL RATIO AND IS NECESSARY TO COPE WITH THE GREATER SOPHISTICATION OF OUR SOCIETY AND THE ECONOMY, MY VIEW IS THAT RAPID EXPANSION IS USUALLY ACCOMPANIED BY THE UNDER-UTILISATION OF RESOURCES.

IT IS TO THIS FACTOR THAT WE SHOULD TURN OUR ATTENTION,+ HE SAID.

REFERRING TO THE ANNUAL CIVIL SERVICE PAY ADJUSTMENTS, WHICH HE DESCRIBED AS A MAJOR FACTOR CONTRIBUTING TO THE INCREASING COST OF THE CIVIL SERVICE, MR YEUNG CALLED FOR AN ANALYTICAL REVIEW OF THE PRINCIPLES AND METHODOLOGY EMPLOYED IN THE CALCULATION OF REMUNERATIONS.

ANOTHER FACTOR CONTRIBUTING TO THE ESCALATION IN COSTS, HE SAID, WAS THE POLICY OF PROVIDING FRINGE BENEFITS TO SENIOR LOCAL OFFICERS AND ALL EXPATRIATE OFFICERS.

+WHILE I WHOLE-HEARTEDLY SUPPORT THE POLICY OF LOCAL ISATION AND BELIEVE THAT PREFERENCE AND INCREASED JOB OPPORTUNITIES SHOULD BE GIVEN TO LOCAL OFFICERS. I AM CONCERNED AT THE ENORMOUS COST WHICH RESULTS FROM THE PAYMENT OF SUCH BENEFITS ACROSS THE BOARD.

/+MY VIE. IS