XN000022-1993-07-12 — Page 4

MONDAY, JULY 12, 1993

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FIRST STAGE OF CONSULTATION ON BUDGET COMPLETES

(MONDAY) COUNCIL MEMBERS

THE FINANCIAL SECRETARY, MR HAMISH MACLEOD, TODAY COMPLETED HIS ROUND OF CONSULTATION WITH LEGISLATIVE ON THE EXPENDITURE ASPECTS FOR THE 1994/95 BUDGET.

DESCRIBING THIS FIRST STAGE OF CONSULTATION

AS VERY HELPFUL,

HE SAID THE GOVERNMENT WOULD BE STUDYING MEMBERS' VIEWS AND HE HAD BEEN PASSING COPIES OF THESE VIEWS TO THE RELEVANT POLICY SECRETARIES TO LOOK AT THEM FURTHER AND WOULD ARRIVE AT SOME GENERAL VIEWS THIS MONTH.

HE ALSO SAID WHEN HE SPOKE TO THE MEDIA THIS AFTERNOON THAT CONSULTATION ON REVENUE WOULD TAKE PLACE LATER THIS YEAR, IN OCTOBER OR NOVEMBER.

WHEN ASKED ABOUT THE EFFECTS OF ECONOMIC DEVELOPMENTS IN CHINA ON OUR GDP FORECAST, MR MACLEOD SAID: "WE ARE HAVING TO LOOK AT OUR GROWTH FORECAST, ASSUMPTION, FOR THE NEXT FEW YEARS IN THE LIGHT OF ECONOMIC DEVELOPMENTS IN CHINA.

"OUR AIM IS TO AVOID TOO MUCH STOP-GO IN OUR BUDGETTING, SO WE LIKE TO HAVE AN AVERAGE FIGURE. AT THE MOMENT, IT IS 5 PER CENT. COUPLES OF YEARS AGO IT WAS 5.5 PER CENT. SO WE DON'T ALTER THAT FIGURE EASILY. BUT WE CERTAINLY HAVE TO TAKE NOTE OF WHAT MIGHT BE HAPPENING IN CHINA AS A RESULT OF THEIR INFLATION PROBLEM. AND THAT IS A FACTOR WE HAVEN'T TAKEN A FINAL VIEW ON YET.'

TAKEN BY

IT WAS STILL EARLY DAYS YET TO TELL HOW THE MEASURES CHINA WOULD AFFECT THEIR ECONOMY AND THE FEEDBACK INTO OUR ECONOMY, HE SAID, ADDING THAT AT THE MOMENT HE WAS NOT EXPECTING ANYTHING TOO DRAMATIC ON OUR ECONOMY.

ON THE EFFECTS OF THE FINANCIAL PACKAGE ON THE AIRPORT PROJECT ON THE FORECAST OF OUR RESERVES, HE SAID:

"CLEARLY ANYTHING WE DO WHICH CHANGES THE AMOUNT OF EQUITY AND DEBT, THE RELATIONSHIP BETWEEN THOSE TWO FOR THE AIRPORT OR THE AIRPORT RAILWAY, MAY AFFECT, IS LIKELY TO AFFECT OUR FORECASTS OF THE RESERVES.

"SIMILARLY, ANY DECISION WE TAKE IN THE BUDGET ON REVENUE MEASURES OR EXPENDITURE MEASURES WILL AFFECT THOSE FORECASTS TOO.

"THEY ARE GOING TO CHANGE EVERY YEAR IN THE LIGHT OF THE DECISIONS WE TAKE DURING THE YEAR AND OUR ASSUMPTIONS ABOUT THE ECONOMY, I AM NOT GOING TO GUESS WHAT THE NEW FIGURES MIGHT

BE. THAT WOULD HAVE TO EMERGE FROM THE BUDGET."

THE

THE FINANCIAL SECRETARY ALSO SAID NOW THAT THE GREENLIGHT HAD BEEN GIVEN TO THE CENTRAL AND WAN CHAI RECLAMATION FROM CHINA, GOVERNMENT WOULD LIKE TO GET ON WITH THE PROJECT AS SOON AS POSSIBLE.

/THE GOVERNMENT