XN000022-1983-04-14 — Page 5

THURSDAY, APRIL 14, 1983

'WE FACE FUTURE WITHOUT DEBT'

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LET US BE GRATEFUL THAT WE FACE THE FUTURE WITHOUT DEBT AND WITH SATISFACTORY FISCAL RESERVES, THE FINANCIAL SECRETARY THE HON JOHN BREMRIDGE, SAID TODAY AT THE RESUMED BUDGET DEBATÉ.

HE ALSO SAID WE SHOULD THANK THOSE RESPONSIBLE FOR THIS SITUATION - +IT IS NOT A GENERAL EXPERIENCE IN TODAY'S WORLD.+

SUMMING UP HIS BUDGETARY POLICY AND ANSWERING UNOFFICIAL COMMENTS, MR BREMRIDGE SAID THE +HARD TRUTH+ WAS THAT ON APRIL 1, 1983, HONG KONG HAD FREE FISCAL RESERVES (SURPLUS AFTER PROPER PROVISION FOR CONTINGENCIES) OF ABOUT $11.5 BILLION.

HE SAID THE EXPECTED DEFICIT IN THE 1983-84 FINANCIAL YEAR MIGHT CONCEIVABLY BE UP TO $1 BILLION LARGER THAN FORECAST.

+CONSEQUENTLY WITHOUT INCREASED TAXATION HONG KONG COULD FACE AN UNCERTAIN 1984-85 WITH FREE FISCAL RESERVES REDUCED TO ABOUT $4.3 BILLION. THIS WOULD CLEARLY BE DANGEROUSLY LOW,+ MR BREMRIDGE EXPLAINED.

HE MAINTAINED FIRMLY THE NEED TO INCREASE TAXATION BY ABOUT $3 BILLION, ADDING:

+ IT IS ALSO IMPORTANT THAT WE SHOULD BE SEEN TO BE RESORTING TO PRESENT SELF HELP AND NOT TO BE TAKING THE EASY WAY OUT BY SHORTS IGHTEDLY LIVING ON OUR PAST SUCCESSES. MOREOVER WE MUST HAVE ROOM FOR MANOEUVRE WITH REGARD TO POSSIBLE BORROWING IN PARTICULAR.+

ON THE CONSIDERABLE INCREASES HE HAD PROPOSED IN INDIRECT TAXATION, MR BREMRIDGE SAID IT WAS A FACT TAXES WERE RAISED FOR FISCAL AND NOT FOR SOCIAL ENGINEERING OR OTHER PURPOSES.

+IN STEADY CIRCUMSTANCES THE TAXPAYER MIGHT THUS EXPECT REGULAR, GENTLE INCREASES IN INDIRECT TAXATION, AND NOT AS HAS HAPPENED A RELATIVE STANDSTILL FOR SEVERAL YEARS AND THEN A HORRIBLE DAY OF AWAKENING.

+BUT AWAKEN WE MUST TO THE FACT THAT THE HONEYED YEARS OF WINDFALL REVENUE FROM LAND SALES CONTRIBUTING TO LARGE BUDGET SURPLUSES HELPFUL TO THE TAXPAYER WHILE THEY LASTED ALSO PERFORCE SHIELDED US FROM THE CHANGING SITUATION, BECAUSE TAXES COULD REMAIN DECEPTIVELY CONSTANT.+

HE POINTED OUT THAT OUR FISCAL POLICIES WERE RIGHT TIMES HAVE CHANGED AND WE MUST CHANGE WITH THEM.

+ BUT

MR BREMRIDGE, SPEAKING ON THE 1982-83 REVISED ESTIMATES, SAID THE ASSESSMENT OF TOTAL EXPENDITURE WAS NOW SLIGHTLY LOWER

AT $34.5 BILLION AND TOTAL REVENUE MARGINALLY HIGHER AT $31 BILLION (IN HIS BUDGET SPEECH ESTIMATED EXPENDITURE WAS GIVEN AT $34.7 BILLION AND REVENUE, $30.9 BILLION WHICH PRODUCED A DEFICIT OF $3.8 BILLION).

/BECAUSE OF