XN000022-1987-03-19 — Page 4

2

THURSDAY, MARCH 19, 1987

+1 ONLY REGRET THAT HEAVIER DUTIES ARE NOT PLACED ON NON- ESSENTIAL ITEMS WHICH ARE HARMFUL TO PUBLIC HEALTH, HE SAID.

ON THE REDUCTION OF THE STANDARD TAX RATE, MR CHAN NOTED THAT IT WAS ONLY A +TWO PER CENT FORWARD AND HALF PER CENT BACKWARD+ STEP.

HE NOTED THAT IF ONE GAUGE - THE PERSONAL ALLOWANCE BY THE GOVERNMENT'S MASTER PAY SCALE (MPS), ONE WOULD FIND THAT IN 1973-74 WHEN THE MPS WAS INTRODUCED, EMPLOYEES ON MPS POINT 9 JUST ENTERED THE TAX NET.

BY 1986-87, MPS POINT 9 WAS $41 880 PER ANNUM AND IF SEVEN PER CENT WAS ADDED FOR 1987-88, THE SALARY CORRESPONDED TO MPS POINT 9 WOULD BE $44 812 PER ANNUM -- WHICH WAS WHAT THE PERSONAL ALLOWANCE FOR SINGLE PERSON SHOULD BE, HE SAID.

0

CALL TO KEEP EXPENDITURE WITHIN LIMITS

*****

THE GUIDING PRINCIPLE OF GOVERNMENT BUDGET WAS TO SAVE ON RESOURCES AND TO KEEP EXPENDITURE WITHIN THE LIMITS OF INCOME, THE HON YEUNG PO-KWAN SAID TODAY (THURSDAY).

SPEAKING IN THE LEGISLATIVE COUNCIL DURING THE RESUMED BUDGET DEBATE, MR YEUNG SAID THIS PRINCIPLE INVOLVED THE REDISTRIBUTION OF SOCIAL RESOURCES WHICH, IF IMPLEMENTED IN A REASONABLE MANNER, WOULD INCREASE THE PACE OF SOCIAL AND ECONOMIC DEVELOPMENTS.

HE SAID HE AGREED WITH THE FINANCIAL SECRETARY THAT THE GROWTH OF RECURRENT EXPENDITURE SHOULD BE BASED ON THE GROWTH RATE OF RECURRENT REVENUE AND THAT DEFICIT FINANCING SHOULD NOT BE ADOPTED AS A LONG-TERM FISCAL POLICY.

HE NOTED THAT EACH YEAR, BEFORE AND AFTER THE RELEASE OF THE BUDGET, PEOPLE FROM ALL WALKS OF LIFE WOULD PUT FORTH REQUESTS FOR TAX REDUCTION. IF ALL THESE REQUESTS HAD TO BE ACCEDED TO HONG KONG'S ECONOMY WOULD BE ADVERSELY AFFECTED.

THEREFORE, A REASONABLE REDISTRIBUTION OF RESOURCES WAS ESSENTIAL. IT SHOULD, HOWEVER, FOLLOW THE PRINCIPLE OF +EFFECTIVE PROVISION+ TO AVOID WASTAGE AND CASES IN WHICH GOVERNMENT DEPARTMENTS THAT MERITED ALLOCATION OF FUNDS OR EARLY DEVELOPMENT WERE NOT PROVIDED WITH THE NECESSARY RESOURCES, HE SAID,

HE SAID THE HEALTHY GROWTH OF EXPENDITURE ON EDUCATION THIS YEAR SHOWED THAT EDUCATION DEVELOPMENT STILL OCCUPIED A PROMINENT POSITION.

/+BUT IF