XN000022-1991-02-03 — Page 4

SUNDAY, FEBRUARY 3, 1991

BY

INCREASED

"AS A RESULT, THE RELATIVE SIZE OF THE PUBLIC SECTOR

WHILE THE INCREASE RATHER MORE THAN 40 PER CENT OVER THE DECADE. WAS WITHIN THE CAPACITY OF HONG KONG'S ENLARGED AND MORE SOPHISTICATED ECONOMY, IT DID LEAD TO VERY HIGH RATES OF GROWTH IN THE LATE WHICH SPILLED OVER INTO THE EARLY 1980'S," HE SAID.

1970'S,

BECAME A THE FINANCIAL A RESULT OF THE

SIR PIERS SAID THE PERSISTENLY HIGH RATES OF GROWTH MATTER OF CONCERN AND MATTERS CAME TO A HEAD WHEN, IN

PRECIPITOUSLY AS REVENUE DROPPED YEAR 1982-83, COLLAPSE OF THE REAL ESTATE MARKET.

T'דיי

OVER-

BECAME APPARENT, WITH HINDSIGHT, THAT WE HAD BECOME BELIANT ON BUOYANT REVENUES, IN PARTICULAR INCOME FROM LAND SALES.

"TWO THINGS BECAME CLEAR: FIRST, THAT FIRM RESTRAINTS HAD TO BE

AND

THAT SECOND, PLACED ON THE GROWTH OF PUBLIC EXPENDITURE, PLANNING AND FORECASTING TECHNIQUES HAD TO BE IMPROVED.'

OUR

+

SIR

SAID PIERS

IN

THE AREA, FIRST THE

GOVERNMENT

WAS

WHICH HAD

SUCCESSFUL.

"GROWTH RATES OF CONSOLIDATED ACCOUNT EXPENDITURE, BEEN AS HIGH AS ALMOST 18 PER CENT IN 1980-81, FELL TO 3.6 PER CENT IN 1983-84 AND 0.1 PER CENT IN 1984-85.

"AS REGARDS PLANNING AND FORECASTING, IT WAS WOULD HAVE TO REVIEW THE BUDGETARY GUIDELINES THAT SKRVED US WELL IN THE PAST", HE SAID.

НЕ

CLEAR THAT WE HAD IN GENERAL

SPENDING

OF

OF

CLAIM

POINTED OUT THAT THE MOST OBVIOUS NEED WAS FOR A SYSTEM FORWARD PLANNING OR ROLLING FORECASTS TO ENSURE THAT PUBLIC REQUIREMENTS WERE IDENTIFIED AS EARLY AS POSSIBLE, AND THAT LEVELS EXPENDITURE COULD BE MAINTAINED WITHOUT MAKING AN UNACCEPTABLE ON THE RESOURCES OF THE HONG KONG ECONOMY.

SIR

GOVERNMENT ENSURE DIRECTED.

THAT

PIERS

TO WERE

WHAT WAS

SATD IN

DO MORE,

BEING

A

TIGHTER

BUDGETARY

POSITION, IF THE

IT MUST INTRODUCE

SPENT

NEW DISCIPLINES

AND WAS APPROPRIATE

ΤΟ

PROPERLY

THERE PRESENT.

WHERE THAN AT

"WE MUST ALSO BE READY TO CHANGE OUR SPENDING PRIORITIES IS EVIDENCE THAT RESOURCES COULD BE. PUT TO BETTER USE

"THIS MUST BE THE NEXT STAGE OF IMPROVEMENT TO OUR FINANCIAL THE SYSTEM, AND WE ARE GRADUALLY INTRODUCING THIS WIDER APPROACH INTO

A PUBLIC SECTOR REFORM BY WAY OF OF

FINANCES PUBLIC MANAGEMENT PROGRAMME, HE NOTED.

**

ON THE FINANCING OF LARGE PROJECTS, SIR PIERS IMPORTANCE OF FINANCIAL STRENGTH.

LYING

EMPHASISED THE

SECTOR EXPENDITURK SEEKING INVESTMENT TAPPING THE FINANCIAL

"KE HAVE AN EXCITING PROGRAMMR OF PUBLIC BEFORE US. IT IS POSSIBLE THAT WE WILL BE FROM THE PRIVATE SECTOR, AND WE MAY WELL BE MARKETS.

"MONEY IN THE BANK TOGETHER WITH SOUND FISCAL POLICIES BASED ON PRUDENCE 18, 1 BELIEVE, A RECIPE FOR SUCCESS," HE ADDED.

—

0

/4