XN000022-1992-10-08 — Page 5

THURSDAY, OCTOBER 8, 1992

GOVERNOR:

NO, I THINK IF YOU LOOK AT THE FIGURES I ANNOUNCED YESTERDAY YOU WILL SEE VERY CLEARLY THAT OUR PUBLIC EXPENDITURE PROGRAMMES WILL GROW BY SLIGHTLY LESS THAN THE PREDICTED RATE OF INCREASE IN GDP GROWTH. CAN I SAY A FURTHER WORD ABOUT THE QUESTION OF FUNDING OUR PROGRAMMES? THE QUESTION OF WHETHER OR NOT WE'VE BEEN EXTRAVAGANT, BECAUSE IT IS AN IMPORTANT ONE PARTICULARLY FOR THIS HONOURABLE COUNCIL WHICH WILL HAVE TO LOOK AT OUR SPENDING PROGRAMMES IN DETAIL AND WHICH WILL HAVE AN OPPORTUNITY ON SATURDAY OF DISCUSSING THESE MATTERS WITH THE THREE SECRETARIES PRINCIPALLY CONCERNED. LAST YEAR, I AM ADVISED, WHEN THE FINANCIAL SECRETARY PUT FORWARD HIS BUDGET HE WAS VIGOROUSLY ATTACKED FOR BEING FAR TOO CONSERVATIVE IN HIS VIEWS ON PUBLIC FINANCE. THIS YEAR, AFTER MY PROPOSALS YESTERDAY, THERE ARE SOME WHO ARE CRITICISING US FOR BEING TOO EXTRAVAGANT, THOUGH I HAPPEN TO SUSPECT WITHIN ABOUT 24 HOURS NORMAL SERVICE WILL BE RESUMED AND ONCE AGAIN, WE'LL BE CRITICISED FOR NOT SPENDING QUITE ENOUGH ON INDIVIDUAL PROGRAMMES. THE TRUTH IS, THAT NOTHING HAS CHANGED BETWEEN THE FINANCIAL SECRETARY'S BUDGET AND WHAT I SAID YESTERDAY. CERTAINLY NOTHING HAS CHANGED IN RELATION TO OUR VIEWS ON PRUDENTIAL PUBLIC EXPENDITURE. WE ARE ABLE TO MEET A NUMBER OF THE TARGETS WHICH I SET OUT YESTERDAY BECAUSE OF THE USE OF THE WINDFALL WHICH I DESCRIBED. THE SOUNDER THE REVENUES, THE INCREASE IN REVENUE FLOWS THAT WE ARE GETTING THIS YEAR, WHICH HAD I NOT CHOSEN IN EFFECT TO CAPITALISE IT, WOULD HAVE MEANT THAT OUR SURPLUS AT THE END OF THE YEAR WOULD HAVE BEEN NOT 7-1/2 BILLION BUT AT LEAST 13-1/2 BILLION. I THINK THAT 7-1/2 BILLION IS A PERFECTLY ADEQUATE SURPLUS FOR THIS COMMUNITY AND, IF FINANCE MINISTERS IN EUROPE AND NORTH AMERICA COULD POINT TO ANYTHING LIKE THAT AT THE MOMENT, THEY'D BE EXTREMELY PLEASED. I THINK THE WAY WE HAVE USED THAT SURPLUS THIS YEAR IS EXTREMELY SENSIBLE. I WANT TO MAKE THIS POINT CLEAR AS WELL. NOTHING THAT WE ANNOUNCED YESTERDAY WILL HAVE AN EFFECT ON OUR FORECAST RESERVES AND SURPLUSES FOR THE FUTURE. WE WILL CONTINUE TO RUN A SUBSTANTIAL SURPLUS. WE WILL CONTINUE TO RUN SUBSTANTIAL RESERVES AND WE WILL NEED TO DO SO IN ORDER TO PROVIDE US WITH A CUSHION AGAINST ANY ECONOMIC UNCERTAINTY IN THE YEARS AHEAD. SO WE ARE FINANCING OUR PROGRAMMES PRUDENTLY, THERE IS NO QUESTION OF US NEEDING то RAISE TAXES IN ORDER TO FINANCE THE PROGRAMMES THAT I ANNOUNCED. WHAT WOULD BE DANGEROUS WOULD BE, AS SOME CHINESE OFFICIALS HAVE SUGGESTED WE SHOULD DO IN RELATION TO FUNDING THE AIRPORT, TO USE OUR RESERVES IN 1997 TO CUT INTO THOSE IN ORDER TO FINANCE THE AIRPORT. THAT REALLY WOULD BE DANGEROUS AND I AM NOT GOING TO DO IT.

CONCENTRATED ON

DR LEONG CHE-HUNG (IN CANTONESE): YOUR ADDRESS HAS THE DEVELOPMENT OF THE LEGISLATIVE COUNCIL AS A MEANS OF FUTURE CONSTITUTIONAL DEVELOPMENT. COULD YOU INFORM THIS COUNCIL WHAT ROLE, OR CHANGE IN ROLE IF ANY, THE FUTURE EXECUTIVE COUNCIL WILL TAKE? AND SIMILARLY, SINCE YOUR ARRIVAL IN HONG KONG YOU HAVE NOT INFREQUENTLY SOUGHT THE VIEWS OF POLITICAL PARTIES, YET IN YOUR ADDRESS VERY LITTLE IS MENTIONED IN THE WAYS YOU ARE GOING TO STIMULATE OR ENCOURAGE POLITICAL PARTIES. WHAT ARE YOUR PLANS TO DEVELOP POLITICAL IN HONG KONG AS A VEHICLE FOR PROMOTING DEMOCRACY?

PARTIES

/GOVERNOR: I