XN000022-1993-10-07 — Page 5

THURSDAY, OCTOBER 7, 1993

THIS FOR

AS

THE

OF

HONG THAT

THE

THE GOVERNOR: I AM DELIGHTED AT LEAST THAT WE ARE DISCUSSING MATTER THIS YEAR WITH OUR INFLATION PREDICTIONS NOW RATHER LOWER THE YEAR THAN THEY WERE AT THE BEGINNING OF THE YEAR IN HONG KONG, I SAID YESTERDAY. IT LOOKS AS THOUGH THE INFLATION FIGURES FOR YEAR WILL BE LOWER THAN WE WERE ANTICIPATING AND THAT'S THE RESULT A NUMBER OF FACTORS, SOME OF WHICH MAY HAVE MORE TO DO WITH THE KONG GOVERNMENT SOME OF WHICH ARE FORTUITOUS. I'VE SAID BEFORE WE FIND OURSELVES FIGHTING INFLATION IN DIFFERENT CIRCUMSTANCES ΤΟ OTHER COMMUNITIES. FIRST OF ALL, WE ARE NOT IN A POSITION, AND THIS IS SOMETHING WHICH I WILL CONTINUE TO DEFEND, IN WHICH WE CAN USE MONETARY INSTRUMENTS IN THE WAY THAT SOME OTHER COMMUNITIES WOULD. SECONDLY, WE HAVE SUPPLY SIDE CONSTRAINTS BOTH IN RELATION TO LAND AND IN RELATION TO LABOUR WHICH ALSO AFFECT INFLATION HERE. THAT MAKES IT ALL THE MORE INCUMBENT UPON US THAT IN GOVERNMENT WE GIVE THE BEST POSSIBLE EXAMPLE BY CONDUCTING OUR FINANCIAL AFFAIRS AS PRUDENTLY AS POSSIBLE. SO EVEN THOUGH WE WERE ABLE TO ANNOUNCE YESTERDAY ENHANCEMENT OF A NUMBER OF PROGRAMMES ALBEIT $7 BILLION MAY NOT SEEM ENOUGH то SOME HONOURABLE MEMBERS, THAT ENHANCEMENT WAS WITHIN OUR CUSTOMARY GUIDELINES, THAT IS. WE ARE NOT PREPARED TO ALLOW PUBLIC EXPENDITURE ΤΟ GROW BEYOND THE RATE OF GROWTH IN THE ECONOMY AS A WHOLE. I DON'T THINK THERE ARE MANY GOVERNMENTS AROUND THE WORLD WHO'VE BEEN ABLE HAND ON HEART TO COMMIT THEMSELVES TO THAT YEAR AFTER YEAR AND STICK TO IT. WE ALSO CONTINUE TO PURSUE IN GOVERNMENT A TOUGH EFFICIENCY DRIVE TO TRY TO MAKE CERTAIN THAT THE MONEY THAT WE SPEND ON BEHALF OF THE HONG KONG TAXPAYER IS AS WELL SPENT AS POSSIBLE. I AM SOMETIMES SURPRISED BY THE IMPLICATION THAT TO TRY TO BECOME MORE EFFICIENT IN GOVERNMENT WITH A RISING PUBLIC EXPENDITURE PROGRAMME IS TANTAMOUNT TO CUTS IN PUBLIC EXPENDITURE. WHAT WE'VE MADE PERFECTLY CLEAR IS THAT WHERE DEPARTMENTS ARE ABLE ΤΟ MAKE SAVINGS THROUGH GREATER EFFICIENCY THEY CAN DEPLOY THOSE REVENUES IN ORDER TO ENHANCE OTHER PROGRAMMES. THAT'S A VERY SENSIBLE PIECE OF HOUSEKEEPING AND ONE WE INTEND TO STICK TO. SO THE SECOND THING WE HAVE TO DO IS TO BE EFFICIENT WITH OUR OWN MONEY OR RATHER WITH THE TAXPAYERS MONEY.

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THIRDLY, WE ARE DOING WHAT WE CAN IN THE LABOUR MARKET BOTH THROUGH THE LABOUR IMPORTATION SCHEME 22,000 WORKERS HAVE COME IN UNDER THE LABOUR IMPORTATION SCHEME SO FAR WITH ANOTHER 3,000 TO COME WE ARE ALSO, AS THE HONOURABLE MEMBER WILL KNOW EMBARKED ON AN AMBITIOUS PROGRAMME OF RE-TRAINING AND I MADE PROPOSALS YESTERDAY ABOUT HOW WE COULD CAST THE NET A LITTLE WIDER IN ORDER TO PROVIDE MORE RE-TRAINING FOR OTHERS IN ADDITION TO THOSE WHO LOSE THEIR JOBS BECAUSE OF INDUSTRIAL RESTRUCTURING OR SIMILAR ECONOMIC PROCESSES AND, FINALLY, WE HAVE TO DO WHAT WE CAN IN THE PROPERTY MARKET. WE SUPPORT I SUPPORT THE PRUDENT MEASURES WHICH BANKS HAVE TAKEN FOR GOOD FINANCIAL REASONS DETERMINED BY THEMSELVES TO PREVENT TOO MUCH OVER- HEATING IN THE PROPERTY MARKET. I HOPE WE MADE A CONTRIBUTION YESTERDAY WHEN WE ANNOUNCED AN ADDITIONAL 120 CIVIL SERVANTS IN LAND DEPARTMENT TO EXPEDITE ISSUES LIKE LEASE MODIFICATION AND WE THAT A RESULT OF THAT SHOULD BE THAT WE ARE ABLE TO INCREASE BY 2,000 E NUMBER OF FLATS FOR HOME OWNERSHIP WHICH ARE COMPLETED NEXT YEAR AND THAT INCREASE IN DEMAND IN SUPPLY RATHER SHOULD I THINK HAVE SOME IMPACT PERHAPS MARGINAL BUT SOME IMPACT ON PROPERTY SPECULATION AND PROPERTY PRICES. SO WE HAVE TO GO ON WORKING RIGHT ACROSS THE BOARD. THE HONOURABLE MEMBER IS ENTIRELY CORRECT ΤΟ SAY THAT THE BATTLE AGAINST INFLATION HAS то REMAIN A PRIORITY CONSIDERATION FOR US. THERE HAS JUST BEEN A WORLD BANK REPORT ON WHY THE EAST ASIAN ECONOMIES HAVE DONE SO MUCH BETTER THAN OTHER DEVELOPING ECONOMIES ELSEWHERE IN THE WORLD AND I THINK ONE OF THE LESSONS FROM THAT REPORT IS THE IMPORTANCE OF SENSIBLE AND PRUDENT MACRO-ECONOMIC POLICY AND ABOVE ALL, BEARING DOWN WHEREVER WHENEVER POSSIBLE ON INFLATION.

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/THE PRESIDENT:

THINK

ABOUT

POSSIBLE