XN000022-1989-03-01 — Page 36

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WEDNESDAY, MARCH 1, 1989

FS'S SPEECH ON TV AND RADIO

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FOLLOWING IS THE TEXT OF THE BUDGET SUMMARY DELIVERED BY THE FINANCIAL SECRETARY ON TELEVISION AND RADIO STATIONS THIS (WEDNESDAY) EVENING:

"EARLIER TODAY IN THE LEGISLATIVE COUNCIL I PRESENTED MY BUDGET FOR THE COMING FINANCIAL YEAR. IN PREPARING THIS BUDGET, I HAD TO TAKE INTO ACCOUNT THREE KEY FACTORS. LET ME BEGIN, THEREFORE, BY SAYING SOMETHING ABOUT EACH OF THEM, AND EXPLAINING WHY THEY ARE IMPORTANT AND HOW THEY INTERACT.

THE

OUR

"FIRST, INFLATION. HONG KONG CONTINUES то PROSPER, AND INFLATION WE ARE EXPERIENCING 19 CAUSED BY THE VERY SUCCESS OF ECONOMY. THE CURRENT STRONG DEMAND FOR OUR GOODS AND SERVICES HAS PUSHED UP PRICES. WE ARE ALL FEELING THE EFFECTS OF THIS. BUT OVER TIME, THE ECONOMY WILL ADJUST, AND INFLATION SHOULD EASE. I AM FORECASTING THAT THIS WILL HAPPEN LATER THIS YEAR. WHAT I HAVE HAD DO IS TO ENSURE THAT MY BUDGET PROPOSALS WILL NOT MAKE MATTERS WORSE.

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"THE SECOND KEY FACTOR IS THE CONSIDERABLE BUDGET SURPLUS. SOME WILL SEE THIS SURPLUS AS PROVIDING AN OPPORTUNITY TO EXPAND PUBLIC SERVICES OR REDUCE TAXATION. I CAN UNDERSTAND THIS POINT OF VIEW. BUT SUBSTANTIAL INCREASES IN GOVERNMENT SPENDING OR SHARP REDUCTIONS IN TAXATION WOULD ADD TO THE INFLATIONARY PRESSURE. NEVERTHELESS, I AM PLEASED TO SAY THAT IT HAS BEEN POSSIBLE TO MAKE SOME PROVISION NOT ONLY FOR FURTHER IMPROVEMENTS IN SERVICES BUT ALSO FOR MODEST REDUCTIONS IN TAX RATES.

*THIRDLY, THERE IS A NEED TO BUILD FOR OUR FUTURE. IMPROVEMENTS TO OUR ROAD AND RAIL NETWORKS, THE PORT, AND THE ENVIRONMENT ALL HAVE TO BE PROVIDED FOR IF WE ARE TO CONTINUE TO FORGE AHEAD IN THE 1990'S AND BEYOND. A NEW AIRPORT, TOGETHER WITH THE ASSOCIATED INFRASTRUCTURE, WOULD INVOLVE FURTHER MASSIVE EXPENDITURE. AND 80 I HAVE DECIDED TO BEGIN PUTTING MONEY ASIDE NOW. THIS YEAR, AS A FIRST STEP, I AM SETTING ASIDE $7 BILLION TOWARDS THE MAJOR WORKS WHICH WE WILL NEED AS WE APPROACH THE 21ST CENTURY.

"SO MY TASK HAS BEEN TO RECOGNISE THE IMMEDIATE ASPIRATIONS OF OUR COMMUNITY, WHILST AT THE SAME TIME SAFEGUARDING HONG KONG'S PROSPERITY IN THE LONGER TERM.

"WHEN I SPOKE TO YOU AFTER MY BUDGET LAST YEAR, I EXPECTED THAT OUR ECONOMIC GROWTH WOULD BEGIN TO SLOW DOWN IN 1988. THIS PROVED TO BE THE CASE. THE GROWTH RATE FOR 1988 WAS 7.5 PER CENT. AND IN 1989 I EXPECT 6 PER CENT, EVEN SO WE SHOULD CONTINUE TO ENJOY ECONOMIC GROWTH AT A RATE WHICH MANY WOULD ENVY.

"DESPITE THE