XN000022-1988-04-21 — Page 13

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FS COULD BE MORE GENEROUS * * * * *

THURSDAY, APRIL 21, 1988

THE FINANCIAL SECRETARY SHOULD UNDERTAKE TO REVIEW THE POSSIBILITY OF FURTHER TAX CONCESSIONS IF IN 1989 THERE EVIDENCE OF AN ECONOMIC DOWNTURN, THE HON RITA FAN LEGISLATIVE COUNCIL TODAY (THURSDAY).

IS NO CLEAR SAID IN THE

SPEAKING DURING THE BUDGET DEBATE, MRS FAN SAID ALTHOUGH THE BUDGET HAD BEEN WELCOMED BY MANY AS BALANCED AND REASONABLE AND THAT THE ONE PER CENT UNEXPECTED TAX CUT WAS GOOD NEWS TO MANY TAXPAYERS, SHE BELIEVED THAT THE FINANCIAL SECRETARY HAD BEEN LESS GENEROUS THAN HE COULD AFFORD TO BE.

SHE SAID THE TAX CONCESSIONS WERE EXPECTED TO REDUCE REVENUE FOR 1988-89 BY $1.34 BILLION, AGAINST A NET ESTIMATED SURPLUS OF $5.5 BELLION.

"THE FINANCIAL SECRETARY INDICATED IN HIS BUDGET SPEECH THAT AN AVERAGE OVERALL SURPLUS OF $2.7 BILLION WILL. LEAVE A COMPORTABLE MARGIN TO MAINTAIN THE REAL VALUE OF OUR RESERVES AND PROVIDE CUSILION FOR UNFORSEEN PVENTS.

A

WITH AN ESTIMATED SUBULUS OF $5.5 BILLION, WHI

IS TWICE THAT OF THE NECESSARY AMOUNT, AND AN EXPECTED SURPLUS OF $10 BILLION IN 1987-88, [S THE BUDGET PROPOSAL SUITABLY CAUTIOUS OR IS IT OVER-CONSERVATIVE?

"HAS THE OPPORTUNITY FOR IMPLEMENTING HOSTE LONG OVERDUE TAX MEASURFA BUCH AS TAX EXEMPTION FOR SEVERAN ́E PAY FOR WORKERS BERN ALLOWED TO SLIP AWAY BY DEFAULT"

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MRS FAN SAID THAT IF THERE WAS A SERIOUS DOWNTURN LN ECONOMY IN THE NEAR FUTURE, THIS CAUTIOUS APPROACH MIGHT PROBABLY JUSTIFIED.

OUR BR

"HOWEVER, IF THE PREDICTION IS WRONG, [S IT FAIR FOR THE AFFECTED PARTIES, FOR EXAMPLE THE WORKERS, TO KEEP ON PAYING TAX ON THE COMPENSATION WHICH THEY RECEIVE WHEN THEY LOSE THEIR JOBS?

"I BELIEVE THE FINANCIAL SECRETARY HAS BEEN LESS GENEROUS THAN HE CAN AFFORD TO BE, SO I WOULD WELCOME AN UNDERTAKING FROM HIM THAT IF IN 1989 THERE IS NO CLEAR EVIDENCE OF AN ECONOMIC DOWNTURN, HE WOULD REVIEW THE POSSIBILITY OF GRANTING TAX EXEMPTION FOR SEVERANCE PAY, INCREASE THE ALLOWANCE FOR MACHINERY DEPRECIATION, AND REMOVE THE 10 PER CENT CLAWBACK ON PERSONAL ALLOWANCE."

MRS FAN SAID SHE WELCOMED THE INTRODUCTION OF A WORKING WIFE ALLOWANCE AS AN INTERIM MEASURE FOR SEPARATE TAXATION.

HOWEVER, SHE BELIEVED THE TIME HAD COME FOR THE FINANCIAL SECRETARY TO MAKE A FIRM COMMITMENT ON THE DATE FOR THE INTRODUCTION OF SEPARATE TAXATION AND THAT THE DATE SHOULD BE AS EARLY AS POSSIBLE.

/"IN 1970,