XN000022-1984-11-07 — Page 2

WEDNESDAY, NOVEMBER 7, 1984

'NO BELIEVER IN HIGH TAXATION' SIR JOHN

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THE FINANCIAL SECRETARY. THE HON SIR JOHN BREMRIDGE, SAID IN THE LEGISLATIVE COUNCIL TODAY HE DID NOT AGREE WITH THE ARGUMENT THAT IT WOULD BE NECESSARY TO RAISE TAXATION BECAUSE OF THE NEED FOR INCREASED REVENUE.

SIR JOHN SAID HE WAS NO BELIEVER IN HIGH TAXATION AND THAT HE HAD BEEN ON RECORD AS SAYING IN THIS YEAR'S BUDGET SPEECH THAT HE HAD HOPED FURTHER INCREASES ON DIRECT TAXATION IN 1985-86 COULD BE AVOIDED.

MUCH

+ IT IS AT LEAST ARGUABLE THAT REVENUE WILL RISE APPROPRIATELY AS A CONSEQUENCE OF INCREASED GDP. BUT ONLY TIME WILL TELL. ALSO MUST DEPEND ON THE PUBLIC WILL, HE SAID.

IN AN EARLIER DEBATE ON THE GOVERNOR'S ANNUAL POLICY ADDRESS, THE HON BILL BROWN HAD REGARDED HIGHER TAXATION, PREFERABLY INDIRECT TAXATION, AS INEVITABLE.

TO THIS, SIR JOHN SAID, +HE MAY BE PROVED RIGHT, BUT | MUST EN PASSANT REMIND HIM THAT FLAT SALES TAXES, THOUGH PRODUCTIVE, ARE REGRESSIVE AND INFLATIONARY. A V.A.T. HAS THEORETICAL ATTRACTIONS, BUT IMPLEMENTATION IN HONG KONG WOULD BE EXPENSIVE AND FRAUGHT WITH COMPLICATION. +

HE ADDED THAT NONETHELESS, CONSUMPTION TAXES HAD APPEAL AND MUST BE THE SUBJECT OF STUDY.

SIR JOHN TOLD THE COUNCIL IT REMAINED VITAL THAT THE GOVERNMENT SHOULD RESTRAIN ITS EXPENDITURE, PARTICULARLY RECURRENT EXPENDITURE AS TIGHTLY AND EFFICIENTLY AS POSSIBLE, WHILE ALWAYS MOVING AHEAD WITH ITS MAJOR PROGRAMMES.

HE STRESSED THAT THE GOVERNMENT'S PRESENT TIGHTENING MEASURES WERE NO FLASH IN THE PAN, BUT PART OF CONTINUING POLICY+.

HE CONCEDED THERE WAS THE OBVIOUS CONFLICT BETWEEN DECENT ASPIRATIONS AND PRAGMATIC RESTRAINTS.

+WE ARE AT ANY RATE FORTUNATE IN BEING ABLE TO SEE THE MISTAKES MADE IN THE PAST 30 YEARS OR SO BY THOSE GOVERNMENTS WHO THOUGHT THAT EXPENDITURE COULD CONTINUALLY EXCEED INCOME. PUT ANOTHER WAY, THAT PROBLEMS COULD BE SOLVED BY THROWING MONEY AT THEM - AND USUALLY BORROWED MONEY AT THAT.

+WE ARE GETTING RICHER AS A COMMUNITY.

I AM NOT THEREFORE

IN THE LEAST SURPRISED OR CONCERNED THAT DECENT MEN AND WOMEN SHOULD PROPOSE NEW AND EXPENSIVE PROGRAMMES. IT WOULD BE ASTONISHING IF THEY DID NOT, HE SAID.

/SIR JOHN