XN000022-1993-07-02 — Page 6

FRIDAY, JULY 2, 1993

TRANSCRIPT OF REMARKS BY FINANCIAL SECRETARY MR HAMISH MACLEOD

AFTER BRIEFING LEGISLATIVE COUNCIL MEMBERS ON THE EXPENDITURE ASPECTS OF THE 1994/95 BUDGET TODAY

FS: GOOD MORNING. WELL, NO SOONER IS ONE BUDGET OVER AND ALAS THE NEXT BUDGET BEGINS TO TAKE SHAPE AND OBVIOUSLY WHAT I HAVE BEEN DOING THIS MORNING IS REALLY STARTING THE PROCESS WHICH WILL LEAD TO THE NEXT BUDGET AND OF COURSE WILL ALSO AFFECT THE GOVERNOR'S SPEECH IN OCTOBER - THE TRADITIONAL SPEECH OPENING LEGCO. SO I WAS VERY MUCH SETTING OUT THE BACKGROUND FOR MEMBERS OF OUR ECONOMIC AND FINANCIAL SITUATION, BOTH NOW AND AS WE SEE IT UNFOLDING OVER THE NEXT FEW YEARS. A KRY ASSUMPTION CONTINUES TO BE THE QUESTION OF THE MEDIUM RANGE FORECAST AND THE QUESTION OF GDP GROWTH OVER THAT PERIOD, THE PERIOD UP TO 1997-98. I MENTIONED THE NEW FACTOR WHICH WE HAVE TO BEGIN TO TRY AND ASSESS THE IMPLICATIONS OF, I.E. THE ECONOMIC DEVELOPMENTS IN CHINA WHICH IN SHORTHAND OF COURSE FOR IN PARTICULAR THE INFLATION PROBLEM AND THE ASSESSMENT OF WHAT IMPACT THE STEPS THEY TAKE TO DEAL WITH THAT MIGHT HAVE ON THEIR ECONOMIC GROWTH AND HENCE ON OUR OWN ECONOMIC GROWTH BUT AT THE MOMENT I TOLD MEMBERS WE ARE CONTINUING TO USE THE 6 PER CENT GDP GROWTH FIGURE AS AN ASSUMPTION. THAT IS IMPORTANT BECAUSE JT MEANS, ROUGHLY SPEAKING, BECAUSE IT'S A PROVISIONAL FIGURE, WE CAN STILL ANTICIPATE OUR EXPENDITURE GROWING ABOUT 5 PER CENT NEXT YEAR AND THAT SHOULD BE AN REASSURING MESSAGE.

SECONDLY,

I UPDATED MEMBERS ON THE FINAL FIGURE, AND ACTUALLY SOMETIMES IN GOVERNMENT IT IS CALLED THE FINAL FINAL FIGURE, BUT ANYWAY, THE FINAL FIGURE ON THE OUTTURN ON THE SURPLUS FOR 92-93. I WAS RELIEVED, I MUST SAY, TO BE ABLE TO TELL MEMBERS THAT IT'S NOT TOO DIFFERENT FROM THE FIGURE WHICH I PRODUCED IN THE BUDGET, THE REVISED ESTIMATE IN THE BUDGET. THE FIGURE $21.9 BILLION IS ACTUALLY $1.4 BILLION ABOVE THE REVISED ESTIMATE WHICH IS NOT A LARGE SUM OF MONEY AND Ι AM TOLD IT'S THE SMALLEST DIFFERENCE WE ACHIEVED IN THE LAST FIVE YEARS. SO I TAKE THAT OUR FORECASTING IS IMPROVING. ALTHOUGH I GUESS THE TEST OF THAT WILL BE NEXT YEAR WHEN WE SEE WHETHER WE CAN REPEAT IT. THAT FIGURE THEREFORE DOES NOT AFFECT THE ISSUE MUCH ONE WAY OR THE OTHER.

I AM LOOKING FORWARD OVER THE NEXT WEEK OR TEN DAYS TO MEETING MEMBERS IN GROUPS WHEN THEY WILL BE GIVING ME THEIR VIEWS ON PRIORITIES, IN PARTICULAR FOR EXPENDITURE, I AM DEALING WITH REVENUE LATER,

PRIORITIES FOR EXPENDITURE FOR THE NEXT BUDGET. SO THAT'S THE PROCESS WHICH WE'VE JUST BEGUN AND WHICH I LOOK FORWARD TO TAKING PART IN. ANY QUESTIONS?

REPORTER:

WHAT'S HAPPENING IN CHINA

NEXT BUDGET?

.MORE DIFFICULT FOR THE

/FS: YES