XN000022-1985-04-17 — Page 5

WEDNESDAY, APRIL 17, 1985

BUDGETARY FORECASTS COULD BE MISLEADING

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THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, SAID HE WOULD NOT MAKE LONG TERM BUDGETARY FORECASTS BECAUSE HE BELIEVED THAT THESE FORECASTS + IN EXPOSED AND VOLATILE HONG KONG COULD BE SERIOUSLY MISLEADING+.

SIR JOHN WAS SPEAKING AT THE RESUMED BUDGET DEBATE TODAY WHEN HE SAID IT WAS AS YET UNCLEAR WHETHER THE GOVERNMENT WOULD CONSIDER NEXT YEAR FURTHER REAL INCREASES IN TAXATION AS OPPOSED TO MAINTENANCE OF YIELD, OR WHETHER INCREASED REVENUE IN REAL TERMS WOULD FLOW SUFFICIENTLY FROM INCREASED PROSPERITY.

AN END TO

BUT WE

+ IT IS NOT DIFFICULT TO ASSUME MY PREFERENCE. THE RESTRUCTURING PROCESS WOULD BE A MARVELLOUS TONIC. MUST WAIT AND SEE.

+WE LIVE IN AN UNCERTAIN WORLD WHICH SAVAGELY PENAL ISES GMATISM. THIS IS ONE REASON WHY, UNLIKE MISS LYDIA DUNN AND MISS MARIA TAM, I BELIEVE THAT LONG TERM BUDGETARY FORECASTS IN EXPOSED AND VOLATILE HONG KONG COULD BE SERIOUSLY MISLEADING. : WILL NOT MAKE THEM,+ HE SAID.

POINTING OUT THAT +ALL TAXATION HAS BEEN UNPOPULAR SINCE THE BEGINNING OF TIME+ AND ECHOING MISS DUNN'S VIEW THAT +A DEGREE (F INEQUITY IS INEVITABLE+, SIR JOHN NOTED THAT IN HONG KONG IT WAS ACCEPTED THAT THE PROPER PURPOSE OF RAISING GOVERNMENT REVENUE WAS NORMALLY TO MEET ESSENTIAL GOVERNMENT EXPENDITURE.

+G: VEN THAT IN OUR PARTICULAR CIRCUMSTANCES BUDGETS MUST PRUDENTLY BE BALANCED OVER A CYCLE OF YEARS, THE VIEWS OF THE PEOPLE OF HONG KONG MUST BE HEARD WITH REGARD TO ACCEPTABLE APPROACHES TO REVENUE AND EXPENDITURE,

IF WE

+BUT NOTHING COMES FREE. HIM NOT ME IS NO CRITERION. ARE TO AVOID HIGH DIRECT TAXATION, IT WILL ALWAYS BE ESSENTIAL TO HOLD DOWN VIGOROUSLY THE GROWTH OF PUBLIC SECTOR EXPENDITURE.

+DESPITE MISS DUNN'S CONCERN, IT HAS INDEED BEEN CONTAINED SIGNIFICANTLY BELOW GDP GROWTH IN RECENT YEARS.

+ BUT IN A PROSPERING HONG KONG PROPER GROWTH THERE MUST ALSO BE, PROVIDED ONLY THAT IT IS ALWAYS SUBJECT TO GDP GROWTHI AND CLEARLY IT MUST BE PAID FOR SOMEHOW, HE SAID.

+ THE SOMEHOW INVOLVES APPROPRIATE TAXES. I HAVE DONE MY BEST, BUT I CANNOT SUIT EVERY VESTED INTEREST, + HE SAID.

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