XN000022-1992-04-01 — Page 6

WEDNESDAY, APRIL 1, 1992

"THESE ARE REAL IMPROVEMENTS WHICH WILL BENEFIT THE WHOLE COMMUNITY AND THEY SHOULD NOT BE UNDERVALUED, HE SAID.

THE FINANCIAL SECRETARY SAID HE REGRETTED THAT SOME LEGISLATORS HAD CHOSEN TO DESCRIBE THESE SIGNIFICANT REAL INCREASES IN EXPENDITURE ON KEY SERVICES AS "NEGATIVE GROWTH". "CUTS" OR EVEN AS "SLASHING EXPENDITURE".

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"THIS IS SIMPLY NOT CORRECT, BUT HAVING MADE THIS POINT, I DO ACCEPT THAT IT IS NOT EASY TO CALCULATE REAL GROWTH RATES FROM THE DRAFT ESTIMATES, HE SAID.

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"I SHALL BE LOOKING AT WAYS OF IMPROVING THE PRESENTATION OF THE ESTIMATES NEXT YEAR, HE ADDED.

ON THE $14.1 BILLION SURPLUS FOR 1991-92, MR MACLEOD SAID OVER HALF OF IT COULD BE LOOKED ON AS AN ACCOUNTING ILLUSION.

"IT IS SIMPLY THE RESULT OF DELAYED EXPENDITURE ON CAPITAL PROJECTS. THE MONEY WILL BE DRAWN ON IN SUBSEQUENT FINANCIAL YEARS AS THESE PROJECTS GET UNDERWAY," HE SAID.

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FS EXPLAINS HIS SALARIES TAX PROPOSALS

THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, SAID TODAY (WEDNESDAY) THAT HIS SALARIES TAX PROPOSALS IN THE BUDGET WILL HELP TO MAINTAIN THE REAL VALUE OF THE DISPOSABLE INCOME OF THE MIDDLE AND LOWER INCOME GROUPS.

"THEY WILL NOT ADD TO INFLATION, MR MACLEOD CONCLUDING THE BUDGET DEBATE AT THE LEGISLATIVE COUNCIL.

SAID, WHEN

HE STRESSED THAT MORE GENEROUS ALTERNATIVES, WHICH DID NOT HAVE FULL REGARD TO THE LONG-TERM FISCAL OR ECONOMIC CONSEQUENCES, WERE NOT IN THE INTERESTS OF ANY SECTION OF HONG KONG'S COMMUNITY.

HE COULD NOT ACCEPT THAT HIS PROPOSALS WERE UNREASONABLE.

"IT SEEMS TO ME THAT SOME OF THE CRITICISM IS THE RESULT OF A MISCONCEPTION THAT SALARIES TAX ALLOWANCES HAVE NOT KEPT PACE WITH INFLATION.

THIS ASSERTION DID NOT STAND UP TO SERIOUS SCRUTINY, HE SAID.

"THE SIMPLE FACT IS THAT SINCE 1980, PERSONAL ALLOWANCES REMAINED IN STEP WITH INFLATION.

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HAVE

MR

OF

THE

IN ADDITION ΤΟ THESE INCREASES IN PERSONAL ALLOWANCES, MACLEOD SAID THE GOVERNMENT HAD CARRIED OUT PERIODIC REVIEWS TAX BANDING SYSTEM.

/HE SAID