WEDNESDAY, MARCH 26, 1986
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+ THE GOVERNMENT CAN ENCOURAGE THE COUNCIL TO PROCEED WITH RESEARCH DEVELOPMENT. THEN BY USING THE RESULTS OF RESEARCH DEVELOPMENT WE CAN GUIDE INVESTORS INTO DEVELOPING NEW INDUSTRIES THAT HAVE POTENTIAL,+ HE SAID.
HE ALSO HOPED THAT THE PRODUCTIVITY COUNCIL WOULD STRENGTHEN ITS CO-OPERATION WITH THE TRADE DEVELOPMENT COUNCIL, SUCH AS ARRANGING FOR STAFF OF THE TWO COUNCILS TO MEET MORE REGULARLY TO EXCHANGE IDEAS AND INFORMATION.
TURNING TO THE PROSPECTS FOR THE ECONOMY IN 1986, MR LAI HAD RESERVATIONS ABOUT THE 4.5 PER CENT GDP GROWTH RATE PREDICTED BY THE FINANCIAL SECRETARY.
HE SAID: THE HONG KONG DOLLAR IS LINKED TO THE US DOLLAR, AND ANY FALL IN THE VALUE OF THE US DOLLAR WOULD MEAN AN INCREASE IN THE PRICE OF RAW MATERIALS WE HAVE TO IMPORT.
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+THUS HONG KONG MAY NOT NECESSARILY BENEFIT FROM THE FALL IN VALUE OF THE US DOLLAR. BESIDES, FLUCTUATION OF THE WORLD MONETARY SYSTEM BROUGHT ABOUT BY THE FALL IN OIL PRICES MAY WELL AFFECT HONG KONG, WHILE PROTECTIONISM WILL CONTINUE TO HAVE AN EFFECT ON HONG KONG'S EXPORTS.+
+HOW MUCH CHINA'S CONTROL OF THE USE OF FOREIGN EXCHANGE RESERVES WILL AFFECT HONG KONG'S EXPORTS AND RE-EXPORTS IS INCREASINGLY DIFFICULT TO ESTIMATE, HE ADDED.
ON THE SUBJECT OF REVENUE, MR LAI SAID THE DECLINE IN THE REVENUE FROM LAND SALES WOULD CONTINUE, AND UNDER THE PRESENT CIRCUMSTANCES HE PROPOSED THAT THE FINANCIAL SECRETARY SHOULD CONDUCT AN OVERALL REVIEW OF THE TAXATION SYSTEM, FOR EXAMPLE BY USING PRINCIPLES OF FAIRNESS AND SENSIBILITY TO ARRIVE AT A RATIO BETWEEN DIRECT AND INDIRECT TAXES.
+THESE WILL SERVE AS GUIDELINES FOR PUBLIC REVENUE BEFORE 1997, + HE POINTED OUT.
HE ALSO SUGGESTED THAT THE GOVERNMENT SHOULD RECONSIDER ABOLISHING THE INDIRECT TAX ON +NON-ALCOHOLIC BEVERAGES+, THE CONSUMERS OF WHICH, AFTER ALL, WERE MOSTLY YOUNG PEOPLE WHO HAD NO EARNING POWER.
+THE REVENUE LOST CAN BE MADE UP BY INCREASING INDIRECT TAXES ON NON-ESSENTIAL LUXURY COMMODITIES,+ HE SAID.
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