XN000022-1983-03-24 — Page 9

THURSDAY, MARCH 24, 1983

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+FROM PERSONAL KNOWLEDGE, BEING NEW TERRITORIES BORN AND HAVING BEEN INVOLVED ON THE BOARD OF THE KOWLOON-CANTON RAILWAY CORPORATION, I WOULD SAY THERE IS NO SHORTAGE OF LAND IN THE NEW TERRITORIES, CONVENIENTLY CLOSE TO THE NEWLY-ELECTRIFIED RAILWAY, SUITABLE FOR BUILDING LOW-DENSITY, AFFORDABLE HOMES,+ HE SAID.

TO BE WITHIN THE REACH OF THE SANDWICHED SOCIETY, SUCH UNITS WOULD HAVE TO BE SOLD AT PRICES THEY CAN AFFORD AFTER THEY HAVE PAID INCOME TAX, RATES, UTILITIES, TRANSPORTATION COSTS, MEDICAL AND DENTAL BILLS, SCHOOL FEES, AND HOUSEHOLD AND LIVING EXPENSES.

IN THE AREA OF GOVERNMENT ACCOMMODATION, MR CHEUNG NOTED THAT THE DRAFT ESTIMATES ALLOCATE $680 MILLION FOR OFFICE RENTS AND RATES. HE ASKED WHETHER THE GOVERNMENT HAD CONSIDERED BUYING BACK OFFICE BUILDINGS FROM THE PRIVATE SECTOR AT THIS STAGE OF +LOW+ PROPERTY MARKET.

ON THE SUBJECT OF REVENUE-RAISING ALTERNATIVES, HE SUGGESTED THAT CORPORATE PROFITS TAX SHOULD BE CHARGED ON CORPORATIONS WHOSE ANNUAL TURNOVER EXCEEDS A SET SUM.

+ THE REVISED ESTIMATE FOR CORPORATE PROFITS TAX 1982-83, CALCULATED AT A RATE OF 16-1/2 PER CENT, COMES TO $7.1 BILLION. AN ADDITIONAL ONE PER CENT WOULD YIELD ROUGHLY $430 MILLION,+ HE SAID.

MR CHEUNG STRESSED THAT HONG KONG'S THIRD LARGEST SOURCE OF FOREIGN EXCHANGE WAS TOURISM WHICH IS A +$9 BILLION INDUSTRY+. + IS IT WISE THEN TO PENALISE OUR 2.6 MILLION VISITORS BY INCREASES IN HOTEL ACCOMMODATION TAX AND AIRPORT TAX?+

+THIS RAISES THE OVERALL COST OF THEIR STAY, FURTHER DECREASES THEIR SPENDING POWER AND REDUCES THE COMPETITIVE EDGE OF HONG KONG IN THE REGION, HE SAID.

HE POINTED OUT THAT THE INCREASED AIRPORT TAX WAS ALSO A BLOW TO OUTBOUND TRAVELLERS, ESPECIALLY THOSE ON ECONOMY TOURS, WHO MUST NOW PAY QUITE A BIT MORE IN TERMS OF PERCENTAGE. FURTHERMORE, IT DOES NOT SEEM REASONABLE THAT SHORT HAUL

TRAVELLERS SHOULD HAVE TO PAY SUCH A LARGE PERCENTAGE INCREASE IN AIRPORT TAX.

HE SUGGESTED THAT RATHER THAN AN ACROSS-THE-BOARD INCREASE IN AIRPORT TAX, THE GOVERNMENT SHOULD CONSIDER A SLIDING SCALE OF INCREASES BASED ON THE VALUE OF THE AIRLINE TICKET.

+AS THE FORMER CHAIRMAN OF A LEADING AIRLINE AND OF THE HONG KONG TOURIST ASSOCIATION, MY HON FRIEND, THE FINANCIAL SECRETARY, IS NO DOUBT AWARE THAT THESE PARTICULAR TAX INCREASES MUST DE NEGATIVE FACTORS FOR THE TOURISM AND TRAVEL INDUSTRY, HE SAID.

RECARDING THE TIMING FOR THE INCREASED DUTY RATES ON MOTOR SPIRITS, MR CHEUNG ASKED: +MR BREMRIDGE, ARE YOU PSYCHIC?+

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