XN000022-1993-03-18 — Page 2

•

THURSDAY, MARCH 18, 1993

BUDGET WILL NOT EXHAUST RESERVES

TODAY THE WORD,

THE FINANCIAL SECRETARY, MR HAMISH MACLEOD, STRESSED (THURSDAY) THAT THE 1993 BUDGET WOULD NOT, IN ANY SENSE OF EXHAUST HONG KONG'S RESERVES.

SAID THE

IN REPLY TO QUESTIONS FROM REPORTERS, MR MACLEOD RESERVES FORECAST FOR 1996/97 IN THIS YEAR'S BUDGET WERE UP FORECAST LAST YEAR, FROM ABOUT $71 BILLION TO ABOUT $78 BILLION.

FROM THE

"WHAT WE ARE DOING IS ACTUALLY INCREASING THE RESERVES OVER THE POSITION FORECAST LAST YEAR, HE SAID.

MR MACLEOD SAID MANY OF THE PROJECTS ON WHICH THE GOVERNMENT WAS SPENDING MONEY WERE PROJECTS WHICH WOULD PRODUCE ECONOMIC BENEFITS FOR HONG KONG WELL BEYOND 1997.

"THEY ARE MAJOR INVESTMENTS IN OUT FUTURE PRODUCTIVITY.

HE ADDED THAT PROJECTS SUCH AS ROUTE 3, IMPROVEMENTS TO THE TUEN MUN HIGHWAY, AND THE EXTENSION TO THE CONVENTION AND EXHIBITION CENTRE WOULD PUT HONG KONG BEYOND 1997 IN A MUCH STRONGER ECONOMIC POSITION.

סיו

ON THE QUESTION OF WHETHER A DEFICIT BUDGET WOULD BE SOMEHOW INFLATIONARY, HE SAID THE FIRST POINT

REMEMBER WAS IT WAS A MODERATE DEFICIT.

"A DEFICIT IS SIMPLY A TECHNICAL WAY OF DRAWING ON OUR

RESERVES.

"IF WE DIDN'T RUN A DEFICIT, WE WILL NEVER DRAW ON THE RESERVES WHICH WILL SIMPLY PILE UP, AND UP AND UP.

**

AND AS IMPORTANTLY, WHAT WE ARE SPENDING THE MONEY ON, IN MANY CASES, WILL IMPROVE OUR EFFICIENCY AND PRODUCTIVITY, HE SAID.

"I

MR MACLEOD ADDED THAT MANY OF THESE PROJECTS WERE IN THE CONSTRUCTION INDUSTRY, WHICH WAS PRESENTLY UNDER-UTILISED.

WHICH

"PUSHING A BIT MORE WORK INTO THE CONSTRUCTION INDUSTRY, IS BY THE WAY ASKING FOR MORE WORK, IS ACTUALLY A RATHER SENSIBLE WAY OF SPENDING MONEY.

OF

THE

"WE ARE TAKING ADVANTAGE

LOW TENDER PRICES AT THE MOMENT, AND THAT WILL NOT BE PARTICULARLY INFLATIONARY, HE SAID.

"

1

/2