XN000022-1993-03-03 — Page 59

33

WEDNESDAY, MARCH 3, 1993

WE CAN ALSO LOOK FORWARD TO IMPROVING BUSINESS CONDITIONS IN THE UNITED STATES, OUR BIGGEST EXPORT MARKET. EVEN MORE IMPORTANT IS THE DRAMATIC GROWTH OF THE CHINESE ECONOMY. THE EXCELLENT PROSPECTS OFFERED BY OUR TRADE AND INVESTMENT LINKS WITH CHINA ALLOW US TO FACE THE NEXT FEW YEARS WITH CONSIDERABLE CONFIDENCE IN OUR ABILITY ΤΟ IMPROVE HONG KONG'S PROSPERITY.

AS

BUT WE WILL ALSO OF COURSE FACE SOME CHALLENGES THIS YEAR. EVER, WE WILL HAVE TO WORK VIGOROUSLY TO DEFEND THE PRINCIPLES OF FREE TRADE AND FAIR ACCESS ON WORLD MARKETS. AS PART OF THIS CAMPAIGN, WE WILL BE LOBBYING HARD IN WASHINGTON FOR THE UNCONDITIONAL RENEWAL OF MOST FAVOURED NATION STATUS (OR MFN) FOR CHINA'S EXPORTS.

THE OTHER MAJOR CHALLENGE IS INFLATION. CONSUMER PRICES WILL INCREASE BY AROUND 9.5%. THIS IS NOT A FIGURE WE CAN BE COMPLACENT ABOUT, THOUGH IT IS A SIGNIFICANT IMPROVEMENT OVER PREVIOUS YEARS. AND INFLATION, OF COURSE, IS THE PRICE WE HAVE HAD TO PAY FOR OUR SUSTAINED ECONOMIC GROWTH, AND THE FULL EMPLOYMENT WHICH ACCOMPANIES IT. I WILL CONTINUE TO DO ALL I CAN TO CURB SPECULATION IN HOUSING. AND ΤΟ

KEEP FLAT PRICES FROM GOING BEYOND THE REACH OF THE GENERAL PUBLIC. THOUGH THERE IS OF COURSE A LIMIT TO OUR ABILITY TO INFLUENCE FLAT PRICES, THE RECENT SLIGHT DIP IN PRICES IS ENCOURAGING.

NONETHELESS, THE CONTINUED SUCCESS OF OUR ECONOMY HAS CREATED A VERY HEALTHY SITUATION FOR OUR PUBLIC FINANCES. FOR THE LAST FINANCIAL YEAR, WE HAD A SUBSTANTIAL BUDGET SURPLUS AND AMPLE RESERVES.

OBVIOUSLY, HONG KONG CAN AND SHOULD MAKE THE BEST USE OF THIS BUOYANT FINANCIAL POSITION TO IMPROVE THE LIVELIHOOD OF THE WHOLE COMMUNITY, ESPECIALLY ITS MOST VULNERABLE MEMBERS. AND TO INVEST IN THE MODERN INFRASTRUCTURE WE SHALL NEED TO MAINTAIN OUR ECONOMIC GROWTH WELL INTO THE FUTURE.

SETTING THE PRIORITIES FOR PUBLIC SPENDING INVOLVES MAKING CHOICES, OFTEN DIFFICULT CHOICES. SO, IN DRAWING

UP THIS YEAR'S BUDGET, I HAVE WORKED IN PARTNERSHIP WITH ALL SECTORS OF THE COMMUNITY, I HAVE LISTENED CAREFULLY TO THE ADVICE I HAVE RECEIVED IN MY CONSULTATIONS WITH MEMBERS OF LEGCO, OTHER REPRESENTATIVE BODIES AND FROM A GREAT MANY TRADE, PROFESSIONAL AND WELFARE ASSOCIATIONS.

I HAVE PAID SPECIAL ATTENTION TO THE VIEWS OF THE COMMUNITY AND LEGCO ON PERSONAL TAXATION. LAST YEAR, I PROMISED TO SEE WHAT WE COULD DO FOR SALARIES TAXPAYERS. THIS AFTERNOON, I KEPT THIS PROMISE. I PUT FORWARD PROPOSALS TO BENEFIT ALMOST EVERYONE PAYING SALARIES TAX. FOR 250,000 EXISTING TAXPAYERS, MY PROPOSALS WILL MEAN THAT THEY WILL PAY NOTHING AT ALL IN FUTURE. FOR ANOTHER 1.2 MILLION, TAX BILLS WILL BE CONSIDERABLY REDUCED. FAMILIES FROM THE MIDDLE-INCOME GROUPS WILL PARTICULARLY BENEFIT, AS WELL AS THOSE ON LOWER INCOMES. NO ONE WILL PAY MORE TAX.

BUT I HAVE NOT CONFINED MYSELF TO SALARIES TAX. I HAVE ABOLISHED COSMETICS DUTY AND ENTERTAINMENTS TAX. I HAVE ALSO REDUCED THE STAMP DUTY ON STOCK TRANSFERS, AND ESTATE DUTY. I HAVE MADE THE TAX SYSTEM MORE USER-FRIENDLY. I HAVE, AT THE SAME TIME, TAKEN STEPS TO CLOSE LOOPHOLES WHICH ALLOW TAXES TO BE AVOIDED,

/THE TAX