9
WEDNESDAY, FEBRUARY 27, 1985
FIRSTLY, SIR JOHN SAID IT WAS IMPORTANT THAT THE COMMUNITY AS A WHOLE UNDERSTOOD THAT EQUITY AND EFFICIENCY WERE GUIDING PRINCIPLES. BUDGETS WERE NOT JUST A STRING OF FIGURES.
SECONDLY, MANUFACTURERS, EXPORTERS, TRADERS, BANKERS, THE WORK FORCE INDEED ALL WHO CREATED WEALTH FOR HONG KONG MUST NOT BE DISCOURAGED.
THIRDLY, AND CONSEQUENTLY, AS DIRECT TAXES WERE RAISED ONLY A YEAR AGO IT WAS IMPRUDENT TO CONSIDER ANOTHER INCREASE NOW. IT SEEMED TO HIM TO BE MORE IMPORTANT YET AGAIN TO ACKNOWLEDGE THAT ENTERPRISE AND HARD WORK WERE STIMULATED BY LOW DIRECT TAXATION AND BY CONFIDENCE THAT IT WOULD REMAIN LOW.
FOURTHLY, IT WAS CLEAR THAT HONG KONG WAS NOT ALONE IN RECOGNISING THE TREND TOWARDS, THOUGH NOT OF COURSE TOTAL DEDICATION TO, INDIRECT TAXATION. THIS OFFERED A PERSUASIVE ALTERNATIVE TO INCREASED DIRECT TAXATION.
FIFTHLY, TAXATION OF NON-ESSENTIALS FITTED IN WITH THIS TREND, THOUGH SUBJECTIVITY WAS OBVIOUSLY A PROBLEM. THERE WERE ALSO PRAGMATIC ISSUES TO BE CONSIDERED.
SIR JOHN ADDED: THIS IS NEITHER THE PLACE NOR THE TIME FOR A CONTENTIOUS, PHILOSOPHICAL DISCOURSE ON TAXATION. | ASK MEMBERS ONLY TO BELIEVE THAT THE ADMINISTRATION HAS SOUGHT A REASONED AND BALANCED APPROACH TO THE BUDGETARY DEFICIT THAT CONFRONTS US. OBVIOUSLY THERE WILL BE SCOPE FOR DEBATE. BUT I TRUST AT LEAST THAT OUR MOTIVATION IS PATENT. +
NO NET DEBT, SAYS SIR JOHN
****
THE HONG KONG GOVERNMENT HAS NO NET DEBT, SAID SIR JOHN.
+ INDEED FOLLOWING THE DEDUCTION OF THE 1984-85 DEFICIT FROM THE GENERAL REVENUE BALANCE, OUR FISCAL RESERVES WILL BE $15.3 BILLION, HE SAID.
+MOST IS LENT TO THE EXCHANGE FUND AGAINST INTEREST BEARING DEBT CERTIFICATES. BECAUSE OF OUR LIABILITIES THESE RESERVES CANNOT BE CONSIDERED AS FULLY AND FREELY AVAILABLE FOR USE.
+APART FROM THE LIABILITY ARISING FROM THE BOND ISSUE, THERE ARE ALSO CONTINGENT AND OTHER LIABILITIES, THE EXTENT OF COVER FOR THESE CONTINGENT LIABILITIES IS OBVIOUSLY DEBATABLE, BUT WE HAVE PRUDENTLY WORKED ON A GEARING OF ONE TO THREE.
/+OUR KNOWN
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