XN000022-1982-11-10 — Page 3

2

WEDNESDAY, NOVEMBER 10, 1982

+WHILE WE INTEND TO PROCEED WITH OUR COMMITMENTS

STEADILY AND CAREFULLY, MANY MEMBERS MAY AGREE WITH ME THAT THE DISCIPLINE OF A RATHER MORE AUSTERE APPROACH TO PUBLIC SPENDING IS OVERDUE, IN BRIEF A LITTLE BELT TIGHTENING IS INDICATED,+ MP BREMRIDGE SAID.

HE REGARDED PRESENT PUBLIC SECTOR EXPENDITURE, WHICH IS EQUIVALENT TO 25 PER CENT OF THE GDP, AS BEING TOO HIGH.

HE CAUTIONED THAT FAILURE TO CONTROL THIS EXPENDITURE +IS A RECIPE FOR INFLATION AND UNEMPLOYMENT+,

+THUS DECISIONS ON REALLY LARGE PROJECTS SUCH AS A REPLACEMENT AIRPORT CAN ONLY BE APPROACHED AFTER THE MAJOR SUB-REGIONAL STUDIES HAVE BEEN COMPLETED AND WE KNOW WHAT CASH COMMITMENTS ARE LIKELY TO BE.

+ INITIAL EXCITEMENT OVER NEW PROJECTS COULD SO EASILY GIVE WAY TO LONG-TERM DESPAIR IF EXPENDITURE EXCEEDS WHAT WE CAN PROPERLY AFFORD. I CANNOT EMPHASISE TOO STRONGLY THAT PRUDENCE IS MORE IMPORTANT THAN SHORT-TERM POPULARITY, + MR BREMRIDGE SAID.

MR BREMRIDGE SAID THAT WHILE THE IMPORTANCE OF LARGE-SCALE EMPLOYMENT OFFERED BY THE MANUFACTURING INDUSTRY WAS CLEAR, IT WAS NEVERTHELESS WISE ALSO TO RECOGNISE THE GROWING CONTRIBUTION OF THE FINANCIAL, HOTELS AND EXPORT-BASED SERVICES SECTORS WHERE GROWTH IS AT PRESENT CONCENTRATED.

EXPRESSING HIS PROFOUND BELIEF IN THE CONTINUED PROSPERITY AND STABILITY OF HONG KONG, HE SAID, THE PRESENT PROBLEMS THAT WE FACE APPEAR TO ME TO BE CLEARLY EPHEMERAL.+

+OF COURSE, THEY EXIST OF COURSE THEY ARE CREATING CONCERN, OF COURSE INTELLIGENCE, COURAGE, CONFIDENCE AND HARD WORK WILL PREVAIL AS THEY HAVE BEFORE, HE STRESSED.

HE REITERATED THAT IT IS THE GOVERNMENT'S POLICY AND FIRM INTENTION TO INVEST VIGOROUSLY IN THE FUTURE OF HONG KONG AND ITS PEOPLE.

MR BREMRIDGE SAID, +THE WORLD AT PRESENT IS SUFFERING FROM WHAT IS HOPEFULLY THE TAIL END OF THE WORST RECESSION SINCE THE 1930'S. IT CANNOT BE TOO OFTEN REPEATED THAT HONG KONG IS RELIANT ON EXPORT TRADE.+

+HONG KONG IS HOWEVER SPECIAL IN THAT IN THIS DIFFICULT YEAR WE STILL EXPECT FOUR PER CENT GROWTH IN GDP, DO NOT FACE SERIOUS UNEMPLOYMENT PROBLEMS - THOUGH THEY ARE INCREASING AND HAVE EXPERIENCED A NOTICEABLE DROP IN INFLATION WHICH PRESENTLY IS RUNNING AT ABOUT 10 PER CENT.

MR BREMRIDGE ASSUMED THAT THERE WOULD BE THE SHADOWY BEGINNINGS+ OF A RECOVERY IN THE U.S. ECONOMY IN THE LAST QUARTER OF THIS YEAR AND A CONSERVATIVE TWO-AND-A-HALF PER CENT GROWTH IN THE U.S. GDP NEXT YEAR.

+ I BELIEVE THAT THE U.S. RETAIL TRADE WILL FIRST REFLECT THIS CHANGE OF TIDE, AND THAT HONG KONG WILL THUS BENEFIT WITH OUR CONCENTRATION ON FLEXIBLE LIGHT INDUSTRY DESIGNED FOR EXPORT,+ HE SAID.

/+WHILE THEREFORE