XN000022-1992-03-04 — Page 37

WEDNESDAY, MARCH 4, 1992

35

BUDGET SUMMARY BY FS ON TV AND RADIO

GOOD EVENING,

OUR

THE

THIS AFTERNOON, I PRESENTED MY FIRST BUDGET. IT OUTLINED PLANS TO IMPROVE AND EXPAND EXISTING PROGRAMMES, PARTICULARLY FOR SOCIAL SERVICES. IT IDENTIFIED OUR INVESTMENT PROPOSALS, INCLUDING THE NEW AIRPORT. AND I ANNOUNCED SOME MODEST TAX INCREASES, AS AS IMPORTANT TAX CONCESSIONS FOR THE AVERAGE SALARY-EARNING FAMILY.

WELL

HONG KONG CAN AFFORD THIS BALANCED PACKAGE OF PRUDENT INCREASES IN GOVERNMENT SPENDING WITHOUT LARGE TAX INCREASES, BECAUSE ENCOURAGING WAY OUR ECONOMY IS PERFORMING. IN 1990, GROWTH WAS ONLY 3%, DISAPPOINTING BY OUR USUAL STANDARDS. BUT LAST YEAR, ECONOMIC GROWTH WAS 4%. AND WE HOPE TO HIT 5% FOR 1992.

DESPITE THE PROMISING PROSPECTS FOR THE ECONOMY, I BELIEVE WE HAVE TO STICK TO OUR BASIC GUIDELINE FOR PUBLIC EXPENDITURE. IT MUST NOT GROW FASTER THAN THE TREND RATE OF ECONOMIC GROWTH. THIS SIMPLE RULE IS DESIGNED TO MAKE SURE GOVERNMENT SPENDING DOES NOT GROW BEYOND WHAT WE CAN AFFORD, DOES NOT BECOME SUCH A BURDEN THAT FUTURE GROWTH AND OUR OVERALL PROSPERITY ARE THREATENED.

BUT EVEN ON THIS CAUTIOUS BASIS, WE WILL BE ABLE то MAKE SUBSTANTIAL IMPROVEMENTS IN OUR PUBLIC SERVICES IN THE COMING YEAR. SPENDING ON HEALTH CARE WILL INCREASE BY 27%, AND THE FUNDS AVAILABLE FOR SOCIAL WELFARE PROGRAMMES WILL RISE BY 15%. SPENDING ON EDUCATION WILL INCREASE BY 13%, ENABLING US TO CONTINUE THE EXPANSION OF THE TERTIARY SECTOR AND BRING ABOUT IMPORTANT IMPROVEMENTS IN PRIMARY AND SECONDARY SCHOOLING. THERE WILL ALSO BE REAL INCREASES IN SPENDING ON LAW AND ORDER AND ON IMPROVEMENTS TO THE ENVIRONMENT.

WE ARE ALSO MAKING LARGE INVESTMENTS IN THE INFRASTRUCTURE WE NEED FOR OUR CONTINUED GROWTH AND OUR WELL-BEING IN THE FUTURE. THE NEW AIRPORT IS A MAJOR PART OF THESE PLANS. BUT AS I EXPLAINED TO THE LEGISLATIVE COUNCIL, OUR SPENDING ON THE AIRPORT CORE PROJECTS WILL BE CAREFULLY CONTROLLED. WE WILL BE DEVOTING ONLY ABOUT A QUARTER OF OUR PUBLIC WORKS SPENDING OVER THE NEXT FEW YEARS TO THE AIRPORT PROJECTS. THE OTHER 75% OF OUR PUBLIC WORKS SPENDING WILL BE DEVOTED TO PROVIDING THE BUILDINGS, THE ROADS, THE ENVIRONMENT-RELATED SCHEMES WHICH HONG KONG NEEDS TO UPGRADE THE QUALITY OF LIFE QUITE SEPARATELY FROM THE AIRPORT.

WE

ARE DETERMINED TO PRESS AHEAD WITH IMPROVING OUR ON-GOING PROGRAMMES . WE MUST CONTINUE TO INVEST IN OUR FUTURE. AS A RESULT, THE GOVERNMENT HAS SUBSTANTIAL COMMITMENTS. IT IS ONLY SENSIBLE THAT WE SHOULD SET ASIDE ADEQUATE RESERVES AS A CUSHION AGAINST FUTURE UNCERTAINTIES. SO, I HAVE BUDGETED FOR A SURPLUS OF $5.1 BILLION IN THE COMING YEAR WHICH, WITH THE $2.4 BILLION TO BE RAISED BY OUR BOND PROGRAMME, WILL INCREASE OUR FISCAL RESERVES TO AROUND $99 BILLION BY THE END OF MARCH 1993. AND OUR PROJECTIONS SHOW WE SHOULD STILL HAVE AROUND $70 BILLION RESERVES BY 1997. I THINK THIS IS THE RIGHT LEVEL OF INSURANCE WHICH HONG KONG NEEDS IN AN UNCERTAIN WORLD.

/I WOULD