XN000022-1990-03-07 — Page 22

WEDNESDAY, MARCH 7, 1990

GOVT MUST SEEK TO BROADEN REVENUE BASE

THE

EXCEED PIERS

THE GOVERNMENT NEEDS TO MAINTAIN THE DISCIPLINE THAT, OVER YEARS, THE GROWTH RATE OF PUBLIC SECTOR EXPENDURE SHOULD NOT THE GROWTH OF THE ECONOMY, THE FINANCIAL SECRETARY, THE HON SIR JACOBS, SAID TODAY.

AND AS SLOWER ECONOMIC GROWTH WILL AFFECT THE GROWTH IN REVENUE, REDUCE ITS THE GOVERNMENT MUST SEEK TO BROADEN THE REVENUE BASE AND VULNERABILITY TO FLUCTUATIONS IN THE ECONOMY, HE SAID.

SPEAKING ON THE STRATEGY FOR PUBLIC FINANCES WHEN PRESENTING HIS BUDGET, SIR PIERS SAID THAT TO HELP ACHIEVE THE DISCIPLINE OF KEEPING THE THE GROWTH RATE OF PUBLIC SECTOR EXPENDITURE WITHIN THE GROWTH OF

RANGE MEDIUM

FORECAST TO ECONOMY,

GOVERNMENT LOOKED TO THE THE PROVIDE THE OVERALL FRAMEWORK WITHIN WHICH TO PLAN ITS SPENDING.

"BY LOOKING SEVERAL YEARS AHEAD WE CAN DETERMINE TRENDS AND, NECESSARY, TAKE CORRECTIVE ACTION," HE SAID.

IF

WAS BASED SIR PIERS SAID SINCE THE MEDIUM RANGE FORECAST

ECONOMY, ASSUMPTIONS REGARDING THE EXPECTED PERFORMANCE OF THE

THE PLANNING PERIOD ASSUMED RATE OF

OF THE GDP OVER GROWTH CRITICAL.

"WE ARE CONCERNED WITH THE TREND OVER THE PERIOD AND YEAR-ON-YEAR VARIATIONS.

ON

THE

WAS

NOT

WITH

"LAST YEAR, FOR THE PURPOSE OF THE FORECAST, I ASSUMED THAT TREND GROWTH RATE OF GDP WOULD BE SIX PER CENT PER ANNUM.

"HAVING

THE

THE GENERAL PURPOSES 5.5 PER CENT

TO AND DEVELOPMENTS ΤΟ REGARD

RECENT ECONOMIC OUTLOOK, I HAVE COME TO THE VIEW THAT FOR PLANNING THE TREND GDP GROWTH ASSUMPTION SHOULD BE LOWERED TO PER ANNUM," HE SAID.

GROWTH HOWEVER, HE CAUTIONED THAT WITH A THREE PER CENT RATE OF

5.5 PER CENT PER BEING EXPECTED IN 1990, IF A TREND GROWTH RATE OF ANNUM WAS TO BE ACHIEVED HIGHER RATES OF GROWTH WOULD BE NEEDED IN THE LATER YEARS.

OF

NOTWITHSTANDING THE THE FINANCIAL SECRETARY POINTED OUT THAT

YEARS, SOMEWHAT SLOWER TREND GROWTH RATE ASSUMPTION FOR THE NEXT FEW

PROGRAMME

PUBLIC TO A THE GOVERNMENT WAS FIRMLY COMMITTED

INVESTMENT IN HONG A MAJOR AND NECESSARY EXPENDITURE REPRESENTING

EVEN IMPROVE KONG'S FUTURE AND NEEDED TO MAINTAIN AND IN SOME AREAS EXISTING SERVICES.

H

FOR A

"ALL THIS WILL TAKE US BEYOND OUR BUDGETARY GUIDELINES TIME,

HE SAID, ADDING THAT THE BREACHING OF THESE GUIDELINES COULD ON EXPENDITURE, OCCASIONS BE JUSTIFIED, PARTICULARLY AS REGARDS CAPITAL AUT THE LEVEL OF RECURRENT EXPENDITURE MUST BE CONTROL.

KEPT UNDER STRICT

/WHILE CONCEDING