XN000022-1992-03-05 — Page 6

THURSDAY, MARCH 5, 1992

5

MR

THE

HANDSOME

·

QUESTION:

ABOUT MACLEOD, YOU'VE TALKED RESERVES, THAT BY 1996-97 IT IS GOING TO BE $71 BILLION AND IT AMOUNTS TAKEN INTO TO SOME 40% OF THE TOTAL EXPENDITURE, BUT YOU HAVEN'T

LAND FUND THE AMOUNTS THAT WE ARE GOING TO GET FROM THE SAR ACCOUNT WHICH SIR PIERS JACOBS ESTIMATED TO BE SOMETHING LIKE $70 BILLION BY 1997.

A SO IT MEANS, BY THAT YEAR, YOU ARE GOING TO HAVE RESERVE WHICH WILL BE EQUIVALENT TO 80% BASED ON YOUR CALCULATIONS OF THE TOTAL EXPENDITURE. SO IT COMES BACK TO THE QUESTION: YOU NEED SUCH A BIG CUSHION? IT'S NOT 40% AS LOW AS YOU DESCRIBE SO IS THERE ANY HIDDEN AGENDA? THERE WAS TALK THAT HONG KONG CONCERNED ABOUT A POSSIBLE CONFIDENCE CRISIS CLOSER TO 1997, THAT SOMETHING THAT YOU HAVE IN MIND, THAT WE NEED TO KEEP RESERVES?

IT SET IT'S

—

―

WHY DO

IS

SO IS SUCH BIG

I OF COURSE GOVERNMENT IS YOU KNOW

SECRETARY: FINANCIAL

NO, THERE IS NO HIDDEN AGENDA. MENTIONED THE LAND FUND IN MY SPEECH, I DIDN'T FORGET IT. DOESN'T COME INTO THE RESERVES UNTIL AFTER THE SAR

UP, SO WE HAVE TO PLAN OUR FINANCES OVER THE PERIOD

NOT

THAT WE HAVE JUST THE LAST YEAR BUT OVER THE PERIOD SO SUFFICIENT CUSHION TO DEAL WITH UNFORESEEN DEVELOPMENTS, AND OF COURSE HAVE LEFT, AT LEAST, THE 25 BILLION HANDOVER. WE CAN'T START COUNTING

LAND FUND UNTIL AFTER THAT. THE

MUCH IN CERTAINLY, WE HAVE IT VERY MUCH

IT IS MIND THAT IT WILL HELP TO GET THE SAR OFF TO A GOOD START BUT

AVAILABLE TO US NOT

LET'S SAY IF THERE IS A

ECONOMIC SERIOUS DOWNTURN IN 1995 AND IF WE HAD SUCCUMBED TO THE TEMPTATION TO OUR RESERVES ON ANY NUMBER OF POSSIBLE CONCESSIONS, WE WOULD THEN BE FACED

AND WITH AN EXTREMELY DIFFICULT POSITION. AND I THINK TO TRY

A TIME SUDDENLY, IN THE SHORT TERM, REMEDY A REVENUE DEFICIENCY AT

TO PLAN WHEN BY DEFINITION WE HAVE A PROBLEM, IS NOT A SENSIBLE WAY ANY GOVERNMENT'S FINANCES, AND CERTAINLY NOT THIS GOVERNMENT'S FINANCES. BEARING IN MIND ALSO THAT WE DO NOT HAVE THE OPTION, IF WE WANTED IT, OF CUSHIONS BY HUGE AMOUNTS OF BORROWING. OUR STYLE, IT'S NOT APPROPRIATE.

QUESTION:

-

—

SPEND

EVEN

THAT'S NOT

JUST DO

BUT BEARING IN MIND, AS YOU SAID NOW, THE RANGE OVER THE PAST FEW YEARS IS BETWEEN 50% TO 90%, SO

COMPARATIVELY YOU THINK HAVING SOMETHING LIKE 80% IS VERY SUBSTANTIAL SPEAKING, AND YOU DON'T NECESSARILY HAVE TO RESORT TO THAT PARTICULAR PATH?

FINANCIAL SECRETARY:

THE

IF WELL, WHAT WE HAVE IS - REVENUE MEASURES ONCE THEY ARE PASSED AND IMPLEMENTED, YOU KNOW BEGIN

80% TO REDUCE THE REVENUE – WE HAVE RESERVES WHICH WILL DECLINE FROM

I SAY I FIND THAT OF EXPENDITURE TO 40% OF EXPENDITURE OVER A PERIOD. WHAT THAT IS

I AM PLANNING

ON.

I ACCEPTABLE,

WHAT

IS ACCEPTABLE

THAT WE SHOULD PLAN FOR A VERY MUCH LOWER LEAVE OURSELVES VERY LITTLE ROOM FOR MANOUEVRE IF THINGS THEY CAN DO, WHICH MEAN WE ARE SUDDENLY SHORT OF REVENUE.

QUESTION:

AND

DON'T FIND FIGURE HAPPEN, AS

BUT DO YOU AGREE THAT IS

ACTUALLY 80% AND NOT 40% AS YOU SAID, BECAUSE

FINANCIAL SECRETARY:

NO!

QUESTION:

BECAUSE IT'S JUST THREE

MONTHS BEFORE YOU CAN GET THE SAR LAND FUND.

/FINANCIAL SECRETARY