XN000022-1984-03-28 — Page 30

WEDNESDAY, MARCH 8, 1984

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+HOWEVER, ALL THESE INCREASES ARE MADE POSSIBLE AGAINST

A TIGHTLY HELD DOWN SPENDING IN OTHER AREAS; AND I AM CONVINCED THAT THERE WOULD BE DECISIVE AND CONSEQUENTIAL EFFECTS TO OUR FUTURE DEVELOPMENTS.

+I FEEL PARTICULARLY CONCERNED ABOUT: FIRSTLY, THE CONTINUING DEFICITS; SECONDLY, INFLATION AND THIRDLY, THE PROMOTION OF SCIENCE AND TECHNOLOGY TO ENSURE OUR FUTURE ECONOMIC VITALITY, HE SAID.

COMMENTING ON THE CONTINUING DEFICITS, HE SAID THAT OUR FISCAL RESERVES COULD NOT BE CONTINUOUSLY DRAWN DOWN.

+AS AT 1ST APRIL 1981, OUR FREE FISCAL RESERVES STOOD AT $11.3 BILLION. ON 1ST APRIL 1982, THEY STOOD AT $16.1 BILLION. THEY FELL TO $11.9 BILLION ON 1ST APRIL 1983; AND BY 1ST APRIL 1984, OUR FREE FISCAL RESERVES ARE ESTIMATED TO STAND AT $8.2 BILLION, WITH THE PROSPECT OF BEING DRAWN FURTHER DOWN BY THE ANTICIPATED CONTINUING DEFICIT OF 1985-86 AS A RESULT OF THE FALL IN LAND SALES REVENUE, HE SAID.

POINTING OUT THAT BY END MARCH 1985, OUR FREE FISCAL RESERVES WILL BE ABOUT $7.1 BILLION, HE ASKED, +HOW MANY MORE YEARS CAN WE RELY ON OUR FISCAL RESERVES TO FINANCE OUR EXPENDITURE?+

+FOR HONG KONG, THIS DIMINISHING BALANCE OF FISCAL RESERVES IS PARTICULARLY UNACCEPTABLE AS WE HAVE NO INHERENT NATURAL RESOURCES - NEITHER OIL NOR MINERAL WEALTH TO WHICH WE COULD RESORT TO REPLENISH OUR FISCAL RESERVES, HE SAID.

-

ON THE QUESTION OF BOND ISSUE OR BORROWING, HE SAID THAT +DEBT WITHOUT DISCIPLINE+ WOULD LEAD HONG KONG TO JOIN RANKS WITH THE THIRD WORLD COUNTRIES IN THE GLOBAL DEBT CRISIS WHICH, IN THE UNIQUE SITUATION OF HONG KONG, ABSOLUTELY COULD NOT BE TOLERATED.

+THUS, THE ONLY SENSIBLE OPTION WOULD BE TO TRIM DOWN EXPENDITURE, TO PARE DOWN TO THE BONE IF NEED BE, AND TO MAKE OPTIMAL USE OF REVENUE RAISED, + HE SAID.

WHILE APPRECIATING GOVERNMENT'S EFFORTS TO CONTAIN AND CONSTRAIN PUBLIC EXPENDITURE, HE SUGGESTED THAT FURTHER EFFORTS SHOULD BE MADE TO REDUCE THE RELATIVE SIZE OF THE PUBLIC SECTOR TO BELOW 15 PER CENT.

NOTING GOVERNMENT'S COMMITMENT IN THE PROVISION OF SOCIAL SERVICES, IN PARTICULAR IN MEDICAL AND SOCIAL WELFARE, MR WONG SAID THAT THERE WAS AN URGENT NEED TO ENCOURAGE GROWTH IN GDP BY INCREASING EXPENDITURE ON SELECTED INFRASTRUCTURE PROJECTƏ, AND TO ACCELERATE ECONOMIC DEVELOPMENT TO SUSTAIN THESE SERVICES THE LONG TERM AND, AT THE SAME TIME, TO MAKE EVERY EFFORT TO IMPROVE THESE SERVICES IN THE MOST COST-EFFECTIVE WAY.

+FOR EXAMPLE, PROJECTS SUCH AS PUBLIC HOUSING, ROAD CONSTRUCTION AND CIVIL ENGINEERING WITH HIGH GDP MULTIPLIER EFFECTS COULD FACILITATE ECONOMIC GROWTH AND DEVELOPMENT AND ENSURE ADEQUATE REVENUE TO SUSTAIN AND IMPROVE THESE SOCIAL SERVICES, + HE ADDED.

་

DE SALL,

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