XN000022-1994-03-07 — Page 3

2

MONDAY, MARCH 7, 1994

RATES RISE CAP FAR BELOW INFLATION

* *

THE PROPOSAL TO CAP RATES RISE AT 20 PER CENT IS FAR BELOW THE CUMULATIVE INFLATION RATE OF 33 PER CENT OVER THE PAST THREE YEARS,

DEPUTY SECRETARY FOR THE TREASURY, MR K C KWONG, SAID TODAY

THE

(MONDAY).

WHICH

SPEAKING AT A PRESS CONFERENCE TO CLARIFY VARIOUS ISSUES HAD BEEN RAISED IN CONNECTION WITH THE PROPOSALS ON RATES PUT FORWARD IN THIS YEAR'S BUDGET, MR KWONG ALSO REFUTED SUGGESTIONS THAT BENEFITS FROM SALARIES TAX CONCESSIONS WOULD BE WIPED OUT BY THE RATES RISE.

"UNDER THE PROPOSAL, THE AVERAGE INCREASE IN RATES FOR A FLAT UNDER 1,000 SQUARE FEET IS ONLY $53 A MONTH," HE SAID.

THIS AMOUNTS ΤΟ $636 A YEAR WHEREAS A COUPLE EARNING THE MEDIAN WAGE OF $13,000 A MONTH WILL SAVE $2,320 UNDER THE PROPOSED TAX CONCESSIONS, HE ADDED.

"SIMILARLY A

+

H

SANDWICH CLASS COUPLE EARNING $20,000 A MONTH

WILL SAVE $8,800, HE SAID.

ON OTHER EFFECTS OF THE PROPOSED RATES RISE, MR KWONG POINTED OUT THAT:

* RATES REPRESENT ABOUT TWO PER CENT OF HOUSEHOLD INCOME. PROPOSED INCREASE WILL BRING THIS TO 2.1 PER CENT;

THE

* FOR BUSINESSES, RATES REPRESENT 0.2 PER CENT OF EXPENDITURE. THE PROPOSED INCREASE WILL BRING THIS UP BY A MERE 0.01 PER CENT;

PUBLIC HOUSING TENANTS, WHO REPRESENT ABOUT 42 PER CENT OF THE POPULATION, WILL NOT BE AFFECTED BECAUSE THEIR RENTS ARE BASED ESSENTIALLY ON AFFORDABILITY;

SOCIAL SECURITY RECIPIENTS SHOULD NOT BE RENTS, INCLUSIVE OF RATES, IS A REIMBURSABLE COMPREHENSIVE SOCIAL SECURITY ASSISTANCE SCHEME.

MR

AFFECTED BECAUSE ITEM UNDER THE

KWONG ALSO POINTED OUT THAT THE CURRENT RATE CHARGE OF 5.5 PER CENT IS A HISTORIC LOW. IT WAS 17 PER CENT FROM 1931 TO 1972.

HE STRESSED THAT RATES WAS A STABLE, BROAD-BASED, AND RELIABLE SOURCE OF REVENUE AND THAT THE GOVERNMENT COULD NOT ERODE THE TAX BASE TOO MUCH.

+

'REGULAR REVALUATION OF RATEABLE VALUES IS NECESSARY TO REFLECT UP-TO-DATE RENTAL VALUES, SO THAT THE TAX CAN CONTINUE TO FALL EQUITABLY ON THOSE MOST ABLE TO AFFORD IT, HE ADDED.

11

/3