XN000022-1989-04-26 — Page 28

WEDNESDAY, APRIL 26, 1989

26

RATHER

DANGEROUS THINKING WHICH WILL

"I BELIEVE THIS IS DISCOURAGE INVESTORS. IT IS ALSO INACCURATE.

CYCLE, SOME

AT THE HIGHEST POINT IN HONG KONG'S MANUFACTURING FIVE YEARS AGO, OVER 930,000 WORKERS IN THIS SECTOR WERE EMPLOYED. DESPITE THE FACT THAT OVER 1.5 MILLION CHINESE WORKERS WERE PRESENTLY PRODUCING GOODS FOR AND ON BEHALF OF HONG KONG COMPANIES, THE TERRITORY WAS STILL EMPLOYING OVER 840,000 INDUSTRIAL WORKERS AND ITS GARMENT INDUSTRY ALONE COULD USE ANOTHER 50,000 WORKERS.

"OUR MANUFACTURING

MR MCGREGOR SAID.

INDUSTRY IS FAR FROM DEAD OR DYING, "

HE HOPED THAT THE GOVERNMENT WOULD CONTINUE TO HAVE FAITH IN MANUFACTURERS AND IN THEIR ABILITY TO CONTINUE TO MOVE UPMARKET AND TO PRODUCE GOODS WHICH WOULD SELL ON QUALITY, DESIGN AND PERHAPS ON BRAND NAME.

EVEN

BUDGET DOES NOT BENEFIT LOWER INCOME GROUP: ELSIE TU

*

LOWER

THERE IS NOTHING IN THE 1989 BUDGET то BENEFIT THE INCOME GROUP EXCEPT A PALTRY $3,000 INCREASE IN THE INCOME TAX ENTRY POINT AND SMALL EXTRA ALLOWANCES FOR FAMILIES, THE HON ELSIE TU SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

SPEAKING DURING THE BUDGET DEBATE MRS TU POINTED OUT THAT A SINGLE PERSON EARNING $3.250 A MONTH UNDER THE NEW INCOME TAX ENTRY POINT WOULD RECEIVE A HANDSOME HANDSHAKE FROM THE BUDGET OF LESS THAN 99 A MONTH.

AGAINST THAT, THE FINANCIAL SECRETARY'S BUDGET SPEECH THREATENED TO BROADEN THE INCOME TAX BASE BY INTRODUCING A SALES TAX, SHE SAID.

"SUCH A STEP WOULD NOT ONLY TAKE AWAY FAR MORE THAN

THE $9 A MONTH HANDSHAKE OF THE LOWEST TAXABLE WAGE-EARNERS, BUT IT WOULD ALSO GIVE A NEGATIVE HANDSHAKE TO THOSE WHO EARN LESS THAN $3,250 A MONTH," SHE NOTED.

WORRIED ABOUT THE SALES TAX PROPOSAL, MRS TU SAID A SALES TAX WOULD SURELY TRIGGER AN IMMEDIATE DEMAND FOR HIGHER WAGES WHICH IN TURN WOULD TRIGGER INFLATION.

SHE ALSO SAID THAT IT WAS NAIVE TO SAY THAT THE SALES TAX WOULD BE ONLY AT THE WHOLESALE LEVEL. A WHOLESALER WOULD PASS ON MORE THAN HE LOST TO THE RETAILER, WHO IN TURN WOULD PASS ON MORE THAN НЕ LOST TO THE CONSUMER, SHE NOTED.

THEREFORE, MRS