XN000022-1986-04-23 — Page 9

WEDNESDAY, APRIL 23, 1986

+RESOURCES ARE ANYWAY LIMITED AND ALWAYS WILL BE LIMITED. HONG KONG CANNOT AFFORD RESEARCH INSTITUTES OF SHIPBUILDING AND REPAIR (ONCE OUR BIGGEST INDUSTRY), OF SUGAR REFINING (ONCE THE BIGGEST IN ASIA), OF ARTIFICIAL FLOWERS AND WIG MANUFACTURING, + SIR JOHN SAID.

HE SAID HE HAD LONG SHARED THE GENERAL VIEW THAT THE GOVERNMENT SHOULD NOT BE INVOLVED IN ACTIVITIES THAT COULD ARGUABLY BE DONE BETTER IN THE PRIVATE SECTOR.

+IN GENERAL, PRIVATISATION IS GOOD. BUT PROBLEMS ABOUND,+ HE ADDED.

AIMING AT SMOOTH PUBLIC SECTOR GROWTH *****

THE FINANCIAL SECRETARY THE HON SIR JOHN BREMRIDGE, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) HE FOUND IT HARD TO ACCEPT THE ACCUSATION THAT THE MEDIUM RANGE FORECAST +POSTULATES GROWTH OF 4.5 PER CENT IN GDP+.

+THIS IS NOT TRUE, HE SAID WHEN WINDING UP THE BUDGET DEBATE. WE HAVE MADE THIS AN IMMEDIATE UNDERLYING ASSUMPTION.

+ IF IT PROVES TO BE MISPLACED IT CAN BE ADJUSTED EACH YEAR AS THE MEDIUM RANGE FORECAST IS ROLLED FORWARD. I AM MYSELF OPTIMISTIC FOR THE FUTURE.

SIR JOHN ALSO SAID HE COULD NOT ACCEPT THE ADVICE OF ONE MEMBER THAT THE GROWTH RATE OF PUBLIC SECTOR EXPENDITURE SHOULD BE LIMITED TO 75 PER CENT OF THE GROWTH RATE OF THE GROSS DOMESTIC PRODUCT (GDP).

+WHILE I AM A CONSERVATIVE I CANNOT BELIEVE THAT THIS WOULD MARRY WITH PUBLIC ASPIRATIONS. SMOOTHED PUBLIC SECTOR GROWTH JUST BELOW LONG TERM GDP GROWTH SEEMS A BALANCED OBJECTIVE, HE SAID.

SIR JOHN EXPRESSED SYMPATHY WITH THE VIEWS EXPRESSED ABOUT THE CASE FOR BRINGING IN SMALL SERVICE CHARGES AT THE BORDER SO THAT THOSE WHO USED THE MANY AND INCREASING FACILITIES SHOULD PAY THEIR PROPER SHARE OF THE RAPIDLY GROWING ADMINISTRATIVE AND PARTICULARLY, CAPITAL COSTS.

*THIS WOULD OF COURSE BE A CHARGE NOT A TAX. THE PRESENT SITUATION COULD BE ARGUED TO BE ONE WHICH REQUIRES SUBSIDISATION OF TRAVELLERS BY NON-TRAVELLERS.+

HE SAID THIS WAS A SENSITIVE AREA IN WHICH THERE WERE DIVERGENT VIEWS AND A STUDY WAS BEING CONDUCTED BEFORE ANY CONCLUSIONS WERE REACHED.

/SIR JOHN