XN000022-1990-04-25 — Page 7

WEDNESDAY, APRIL 25, 1990

NOTING THAT THE GOVERNMENT HAD PROPOSED CHANGES TO THE TAX SYSTEM THAT LESSENED THE SYSTEM'S PROGRESSIVITY, MR LEE EXPRESSED CONCERN THAT NEW TAXES THAT FELL JUST AS HEAVILY ON THOSE LEAST ABLE TO PAY AS ON THOSE MOST ABLE TO DO so.

HE WARNED THAT IN DECIDING TO INCREASE INDIRECT TAXES, THE GOVERNMENT MUST BEAR CLOSELY IN MIND THE ENTIRETY OF THE SITUATION FACED BY MANY LOWER AND MIDDLE INCOME FAMILIES.

**THE GOVERNMENT CANNOT SIMPLY LOOK AT EACH TAX OR RATE INCREASE SEPARATELY. RATHER, IT MUST APPRECIATE THE CUMULATIVE EFFECT OF THE RISE IN INDIRECT TAXES SUCH AS THAT ON PETROL, THE INCREASE IN RATES AND WATER CHARGES, AND THE MUCH HIGHER COSTS CONSUMERS MAY FACR UNDER CERTAIN PRIVATISATION SCHEMES, HE SAID.

ON THE ENVIRONMENT,

TT

HE SUGGESTED THAT THE GOVERNMENT GIVE SERIOUS CONSIDERATIONS то ADOPTING THE POLICY OF THREE "P'S": POLLUTERS PAY THE PRICE.

BY MAKING THE POLLUTERS PAY THE PRICE, HE SAID WOULD THEN HAVE TO TAKE INTO ACCOUNT THE ENVIRONMENTAL DECIDING TO PRODUCE PARTICULAR TYPES OF PRODUCTS.

MANUFACTURERS

COSTS BEFORE

1990-91 BUDGET "DOES NOTHING, GOES NOWHERE"

HONG KONG NEEDS A "PRO-HONG KONG,

PRO-BUSINESS"

BUDGET WHICH

WOULD BREAK THE CHAIN RESTRAINING THE TERRITORY'S GROWTH AND MAP A CLEAR PATH TOWARDS GREATER PROSPERITY AND STABILITY, THE HON DAVID

LI, SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY),

SPEAKING IN THE BUDGET DEBATE, MR LI NOTED THAT HONG KONG WAS PLAGUED BY INFLATION, SLOW GROWTH AND A LACK OF CONFIDENCE, AND THAT THE GOVERNMENT'S PLANS FOR A NEW AIRPORT AND PORT FACILITIES DID NOTHING TO PURGE THESE EVILS.

"NOT ONLY DOES THIS BUDGET HIT HONG KONG PEOPLE AND BUSINESS WHERE THEY ARE MOST VULNERABLE, IT CASTS A DARK SHADOW OVER WHAT LIFE IN HONG KONG WILL BE LIKE BEFORE, DURING AND AFTER YOUR DEVELOPMENT PROGRAMME, MR LI SAID.

HE SAID THE FINANCIAL COMMUNITY WAS MOST DISAPPOINTED YEAR'S PESSIMISTIC, "DO NOTHING, GO NOWHERE" BUDGET.

BY THIS

MR LI CALLED FOR A HALT TO THE STEADY GROWTH IN PUBLIC SECTOR EXPENDITURE AND FOR THE INTRODUCTION OF "ZERO-BASED BUDGETING" WITHIN GOVERNMENT, WHICH HE SAID WOULD ENCOURAGE SAVING AND EFFICIENCY.

/FOR FISCAL