XN000022-1992-04-01 — Page 4

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WEDNESDAY, APRIL 1, 1992

MR MACLEOD SAID THE SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS HAD OUTLINED THE GOVERNMENT'S INITIAL THINKING AND HE CONFIRMED IT WAS THE GOVERNMENT'S INTENTION ΤΟ PRODUCE RECOMMENDATIONS ON POSSIBLE WAYS FORWARD WITHIN SIX MONTHS.

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"BUT CLEARLY, OUR ABILITY TO FUND ANY SUCH RECOMMENDATIONS WOULD BE ADVERSELY AFFECTED IF ANY OF THE REVENUE RAISING MEASURES THIS BUDGET WERE NOT TO BE PASSED, HE SAID.

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THE FINANCIAL SECRETARY REPEATED HIS EARLIER ASSURANCES то LEGCO MEMBERS ON WORKING CLOSELY WITH THEM IN THE BUDGET EXERCISE.

"I BELIEVE THAT WE MUST CONTINUE TO DEVELOP CONSULTING MEMBERS ON THE BUDGET," HE ADDED.

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FINANCIAL SECRETARY ON GOVERNMENT RESERVES

THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, MAKES IT VERY CLEAR THAT HE DOES REGARD THE LEVEL OF RESERVES IN THE FORECAST AS ADEQUATE AND HE HAS NO HIDDEN AGENDA TO BUILD UP THE RESERVES EVEN HIGHER.

SPEAKING AT THE CONCLUSION OF THE RESUMED BUDGET DEBATE TODAY (WEDNESDAY) AT THE LEGISLATIVE COUNCIL, THE FINANCIAL SECRETARY SAID NOR SHOULD THE INCREASE IN PROFITS TAX BE SEEN AS THE START OF A TREND - PROVIDED THAT HIS OTHER REVENUE PROPOSALS WERE ACCEPTED.

HE SAID MANY MEMBERS HAD RIGHTLY IDENTIFIED THE MAINTENANCE OF ADEQUATE FISCAL RESERVES AS A KEY FEATURE OF HIS BUDGET STRATEGY.

THE FINANCIAL SECRETARY ALSO NOTED CONCERN HAD BEEN EXPRESSED THAT IN PLANNING FOR $71 BILLION IN 1996-97, HE HAD SET THE TARGET TOO HIGH, ESPECIALLY AS THE GOVERNMENT WAS ONLY COMMITTED TO A FIGURE OF $25 BILLION UNDER THE TERMS OF THE MEMORANDUM OF UNDERSTANDING ON THE AIRPORT CORE PROGRAMME,

THERE HAD ALSO BEEN CONCERNS THAT HE INTENDED TO GO ON RAISING TAXES IN FUTURE YEARS IN ORDER TO BUILD UP A HIGHER LEVEL OF RESERVES.

PUTTING THE FACTS TO ALLAY MEMBERS' ANXIETIES, THE FINANCIAL SECRETARY POINTED OUT THAT THE FORECAST FISCAL RESERVES FOR 1996-97 OF $71 BILLION WAS IN 1996-97 PRICES AND THE FIGURE WOULD BE ONLY $47 BILLION IF IT WERE EXPRESSED IN 1991 PRICES.

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*IN 1992-93, THE FISCAL RESERVES WILL REPRESENT ABOUT 80% OF TOTAL EXPENDITURE. THIS IS NOT A RECORD HIGH. THE PEAK YEAR WAS 1990-91, WHEN THE RESERVES WERE THE EQUIVALENT OF 92% OF EXPENDITURE.

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