XN000022-1993-03-31 — Page 19

WEDNESDAY, MARCH 31, 1993

"HOWEVER, SOME MEMBERS SEEM TO BE ADVANCING A VERY DIFFERENT ARGUMENT: THAT IF THE PRESENT DISAGREEMENT OVER POLITICAL DEVELOPMENT PERSISTS, CHINA WOULD TAKE DELIBERATE ACTION TO DAMAGE HONG KONG'S ECONOMY AND THE WELL-BEING OF THE COMMUNITY."

ASSURANCES

THIS WOULD BE TOTALLY CONTRARY TO CHINA'S REPEATED ABOUT PROTECTING THE ECONOMIC WELL-BEING OF THIS COMMUNITY, HE SAID.

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GROWING RECOGNITION OF TEMPORARY DEFICIT: FS

THE COMMUNITY WOULD PREFER TO SHARE THE FRUITS OF THE ECONOMIC SUCCESS IN THE FORM OF BETTER HOSPITALS, SCHOOLS AND SOCIAL SERVICES RATHER THAN EVER HIGHER RESERVES WHICH GO BEYOND PRUDENCE TO RIDICULOUS PARSIMONY, THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, SAID IN THE LEGISLATIVE COUNCIL, TODAY (WEDNESDAY).

SPEAKING AT THE RESUMED BUDGET DEBATE, MR MACLEOD SAID HE WAS ENCOURAGED BY A GROWING RECOGNITION THAT TO ACCEPT A TEMPORARY DEFICIT IN ORDER TO PUT SOME OF THE RESERVES TO PRODUCTIVE USE IS A PROPER, PRUDENT AND SENSIBLE COURSE OF ACTION.

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SOME MEMBERS HAVE POINTED OUT THAT IF GOVERNMENT'S ACCOUNTS WERE PREPARED ON THE SAME BASIS AS A COMMERCIAL BUSINESS, WE WOULD NOT BE SERING A DEFICIT.

ON THIS ANALYSIS, HONG KONG IS ACCUMULATING

SURPLUSES.

ANNUAL OPERATING

"AND FROM TIME TO TIME, WE ALLOCATE PART OF THOSE ACCUMULATED BALANCES FOR INVESTMENT IN OUR INFRASTRUCTURE AND OTHER WORTHWHILE FACILITIES AND SERVICES.

COULD

"I WILL TAKE THE ADVICE OF MEMBERS AND LOOK AGAIN AT WHETHER WE PRESENT OUR FIGURES ON A DIFFERENT BASIS WHICH BRINGS OUT THE POSITION MORE CLEARLY,'

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MR MACLEOD SAID A FEW STILL BELIEVED THAT A DEFICIT BUDGET WAS IN ALL CIRCUMSTANCES UNDESIRABLE.

US

LEAD

"JT IS WORTH NOTING THE ABSURD SITUATION WHICH THIS WOULD TO. IF WE CAN NEVER RUN A DEFICIT, THEN WE CAN NEVER DRAW ON OUR RESERVES, HOWEVER LARGE THEY MAY BE."

HE SAID SOME OF THOSE WHO CRITICISED THE DEFICIT HAD ALSO URGED THE ADMINISTRATION TO EARMARK A SUBSTANTIAL PART OF THE RESERVES AS A FUND FOR CIVIL SERVICE PENSIONS.

"THESE MEMBERS SHOULD REALISE THAT, ON THEIR OWN LOGIC, IT WOULD BE IMPOSSIBLE EVER TO DRAW ON SUCH A PENSION FUND.'

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ADDRESSING THE WORRIES WHICH HAD BEEN EXPRESSED BY SOME CIVIL SERVANTS ABOUT THE SECURITY FOR THE FUTURE OF THEIR PENSION RIGHTS, HE SAID THESE HAD BEEN GUARANTEED BY THE JOINT DECLARATION AND THE BASIC LAW.

/PENSIONS ARE