XN000022-1992-01-09 — Page 4

THURSDAY, JANUARY 9, 1992

NO CUT IN PUBLIC EXPENDITURE: FS

THE

FINANCIAL SECRETARY, MR HAMISH MACLEOD,

REITERATED TODAY

(THURSDAY) THAT IT IS NOT TRUE THAT THE GOVERNMENT IS CUTTING PUBLIC EXPENDITURE IN ORDER TO PAY FOR THE NEW. AIRPORT; NOR THAT THERE ARE ACTUAL REDUCTIONS IN SPENDING ON SOCIAL WELFARE.

SPEAKING AT A LUNCHEON MEETING OF THE BRITISH CHAMBER OF COMMERCE, MR MACLEOD SAID THE GOVERNMENT IS NOT "CUTTING" THE MANY SOCIAL PROGRAMMES WHICH THE COMMUNITY VALUES SO HIGHLY.

"THERE WILL STILL BE REAL GROWTH IN PUBLIC EXPENDITURE, INCLUDING THAT ON SOCIAL WELFARE, HE SAID.

**

HE NOTED THAT THERE ARE CURRENTLY SIMPLISTIC MYTHS ABOUT PUBLIC EXPENDITURE.

H

SOME DANGEROUS, OVER-

"I WANT TO SET THE RECORD STRAIGHT, HE SAID.

"THE MAIN REASON FOR TIGHTER CONTROL OF EXPENDITURE IS THAT THE LOWER ECONOMIC GROWTH WE ARE EXPERIENCING MEANS WE MUST CORRESPONDINGLY LOWER THE GROWTH IN OUR EXPENDITURE.

"WE ARE COMMITTED TO IMPROVING EFFICIENCY, AND ENSURING THAT MONEY IS SPENT WHERE IT IS MOST NEEDED.'

FT

MR MACLEOD SAID THIS IS ALSO A MODEST

FIGHTING INFLATION,

HE

CONTRIBUTION TOWARDS

SAID HONG KONG MUST CONTINUE TO DO ALL IT CAN TO INCREASE ITS COMPETITIVENESS IN ORDER TO ENSURE THAT THE GROWTH RATE THIS YEAR IS HIGHER THAN IN THE PAST YEAR.

THIS CAN BE ACHIEVED NOT ONLY BY SEEKING TO REDUCE INFLATION AND LOOSEN THE CONSTRAINTS ON THE SUPPLY OF LABOUR AND LAND, BUT ALSO BY MAINTAINING A CLIMATE FAVOURABLE TO INVESTMENT, AND ENABLING MARKET FORCES TO WORK MORE EFFECTIVELY WHEREVER POSSIBLE, HE SAID.

"THIS INCLUDES HAVING A POSITIVE ATTITUDE то THE DRAMATIC RESTRUCTURING OUR ECONOMY IS NOW UNDERGOING, AND TO THE FLEXIBILITY OF OUR ECONOMIC AND ADMINISTRATIVE SYSTEM, AND THE ADAPTABILITY OF OUR ENTREPRENEURS THAT MAKES THIS PACE OF CHANGE POSSIBLE, HE ADDED.

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TO MAINTAIN THE CURRENT DOWN TREND IN INFLATION, THE FINANCIAL SECRETARY SAID IT IS ESSENTIAL THAT SOME OF THE CONSTRAINTS ON THE LOCAL ECONOMY BE EASED THROUGH A SENSIBLE IMPORTATION OF LABOUR POLICY.

"AND THAT OUR PROPOSALS ΤΟ CURB SPECULATION IN DOMESTIC PROPERTY, AND PROTECT THE INDIVIDUAL HOME BUYER, THROUGH A LEGISLATIVE CHANGE IN THE STAMP DUTY RULES DO NOT GET BOGGED DOWN IN DISCUSSION OF TECHNICAL DETAILS, HE SAID.

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