XN000022-1992-03-05 — Page 11

THURSDAY, MARCH 5, 1992

10

QUESTION:

OUR EX-FINANCIAL SECRETARY, SIR PIERS, PROMISED THAT WE CAN GET THE TAXATION REVIEW IN YOUR BUDGET, AS HE PROMISED LAST YEAR, BUT THIS YEAR THERE IS NOTHING MENTIONED ABOUT IT.

FINANCIAL SECRETARY:

NO, HE DIDN'T. HE CONSULTED ME

ON THOSE WORDS. I DON'T HAVE THEM IN FRONT OF ME BUT I THINK WHAT HE SAID WAS THAT HE WOULD LEAVE IT FOR ME TO DECIDE - SOMETHING TO THAT EFFECT. I MEAN HE WAS QUITE CAREFUL. AND OF COURSE THERE WAS A DEBATE ON THE QUESTION OF A TAXATION REVIEW AND I CLEARLY EXPRESSED THE VIEW THAT THERE WAS NO NEED FOR A GENERAL TAXATION REVIEW AT PRESENT TIME, SO THAT'S WHERE WE STAND.

QUESTION: THAT

THE

THE MEDIUM-RANGE FORECAST SHOWS

MR MACLEOD, YOU MENTIONED THAT ONE OF THE AIMS OF THE BUDGET IS ACTUALLY NOT TO FUEL INFLATION. HOW CAN YOU SAY THIS WHEN YOU SAID IN THIS BUDGET STATEMENT THAT THE GOVERNMENT IS PURSUING A PROPER INCREASE IN GOVERNMENT UTILITY CHARGES, WATER CHARGES, TUNNEL

TOLLS, FERRY FEES, AIRPORT FEES AND PERHAPS EVEN GOVERNMENT DEPARTMENTAL FEES?

FINANCIAL MAJORITY

SECRETARY:

-

BY

WAS

THE FACT IS THAT THE VAST OF GOVERNMENT FEES AND CHARGES HAVE ABSOLUTELY WELL I SAY NO EFFECT, OR VIRTUALLY NO EFFECT IF I WAS MORE CAUTIOUS

ON INFLATION AS MEASURED BY CPI OR AS MEASURED BY ANYTHING ELSE. THERE ARE A MYRIAD OF SMALL FEES PAID BY USERS OF SERVICES, MANY OF THEM COMPANIES RATHER THAN INDIVIDUALS. THE PURPOSE OF THE MORATORIUM MAINLY A PSYCHOLOGICAL ONE. AT THE TIME THERE WAS A SORT OF ATMOSPHERE OF EXPECTATION THAT INFLATION WAS JUST GOING TO GO UP AND UP AND UP, AND IT WAS NECESSARY TO MAKE SOME MOVES. WE DID SO AND THE EXPECTATION IS NOW GREATLY LOWERED. AFTER ALL, WE HAVE GONE DOWN FROM A PEAK OF 13.9 TO AROUND 10.5 AND WE ARE FORECASTING 9.5, SO THAT SORT OF

PSYCHOLOGICAL MOVE IS NO LONGER NECESSARY. NOW I DO ACCEPT THAT THERE ARE A FEW FEES AND CHARGES WHICH DO HAVE SOME IMPACT, EVEN

THOUGH IT IS STILL NOT A GREAT ONE, ON CPIA, AND WHAT I SAID IN THE BUDGET SPEECH WAS SIMPLY THAT WE CAN'T CARRY ON WITH THE MORATORIUM. ACTUALLY, IT BECOMES EXTREMELY EXPENSIVE TO DO SO AND THAT WOULD HAVE BE MADE UP BY OTHER TAXES, WHICH WOULDN'T BE VERY POPULAR, BUT WE TRY AND BE SENSITIVE ABOUT THE TIMING, TO AVOID BUNCHING AND SO

ΤΟ

WILL ON.

QUESTION:

THE MEDIUM RANGE FORECAST SHOWS

THAT THERE WILL BE A CASH DEFICIT OF ABOUT $7 BILLION IN THE YEAR 1993-94, DOES THAT IMPLY THAT THE GOVERNMENT IS GOING TO HAVE ANOTHER BIG TAX INCREASE AFTER THIS YEAR?

FINANCIAL SECRETARY:

QUESTION:

CARE OF THAT DEFICIT?

NO, IT DOESN'T

HOW IS GOVERNMENT GOING TO TAKE

/FINANCIAL SECRETARY