XN000022-1988-03-02 — Page 18

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WEDNESDAY, MARCH 2, 1988

DESPITE THE FACT

THAT HONG KONG

EXPERIENCED TWO YEARS OF THE NEGATIVE GROWTH IN OVER-INFLUENCED BY

DOUBLE-DIGIT ECONOMIC GROWTH, HE NOTED THAT 1985 WAS A SALUTARY WARNING THAT WE SHOULD NOT BE RECENT RESULTS.

"FURTHERMORE, I HAVE ALREADY COMMENTED ON THE LIKELY IMPACT RECENT WORLDWIDE PROBLEMS.

OF

I PREFER TO MAINTAIN

"IN THE LIGHT OF THESE CONSIDERATIONS, THE 5.5 PER CENT TREND GROWTH RATE ASSUMPTION FOR THE PURPOSES OF THIS BUDGET, MR JACOBS SAID.

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PROPOSALS

TURNING TO THE MEDIUM RANGE FORECAST, MR JACOBS SAID IT

SPECIFIC BUDGET

AND DESERVED THE BASIS FOR HIS STUDY.

FORMED CAREFUL

SOME OF THE MORE IMPORTANT FEATURES OF THE FORECAST WERE:

PERIOD UP ΤΟ

ABOUT $5.9 BILLION A YEAR, IF NO

庸

FIRST, OUR AVERAGE SURPLUS OVER THE FORECAST 1991-92 WOULD RUN AT

FURTHER FISCAL MEASURES WERE TAKEN;

EXCESS OF THE TO MAINTAIN

SECONDLY, THIS LEVEL OF SURPLUS WAS WELL IN $2 BILLION OR SO THAT WE NEEDED EACH YEAR JUST THE REAL VALUE OF OUR RESERVES;

ACCOUNT

AND THIRDLY, GOVERNMENT EXPENDITURE IN CONSOLIDATED TERMS AS

TO REMAIN A PROPORTION OF GDP WAS FORECAST

MARK AND THE AIM OF NOT SLIGHTLY BELOW THE 16 PER CENT

PUBLIC SECTOR DEMAND CROWDING OUT THE PRIVATE SECTOR WITH WAS BEING ACHIEVED.

STABILITY IN OUR LONGER TWO YEARS OF

MR JACOBS REITERATED THAT IF WE WERE TO MAINTAIN OUR PUBLIC FINANCES, EXPENDITURE PLANS MUST BE RELATED TO TERM PROSPECTS RATHER THAN SHAPED ON THE BASIS OF JUST EXCEPTIONAL REVENUE YIELDS.

"IT FOLLOWS, THEREFORE, THAT ANY ADJUSTMENTS IN 1988-89 RELATE PRIMARILY TO REVENUE.

THE

SHOULD

TAKING

RANGE

HAS

RESULTS WE HAVE "IN THE LIGHT OF

ACHIEVED · AND

OVER PROJECTIONS

THE PERIOD

MEDIUM OF THE ACCOUNT OF OUR FORECAST, SOME FURTHER LOWERING OF TAX RATES IS THUS POSSIBLE; IT

HE SAID. BEEN EARNED BY THE EFFORTS OF THE COMMUNITY,"

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