XN000022-1994-03-10 — Page 2

THURSDAY, MARCH 10, 1994

RATES INCREASE WELL WITHIN INFLATION FIGURE: FS

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WHAT THE GOVERNMENT IS PROPOSING ABOUT RATES INCREASE IS IN EFFECT MERELY KEEPING UP WITH INFLATION, THE FINANCIAL SECRETARY, SIR HAMISH MACLEOD, SAID TODAY (THURSDAY).

"THE AVERAGE INCREASE IN RATES HAPPENS TO WORK OUT TO BE PRETTY WELL EXACTLY THE SAME FIGURE AS THE INCREASE IN CPI(A) OVER THE THREE YEARS IN QUESTION, THAT IS TO SAY, ABOUT 33 PER CENT," HE SAID.

HE WAS SPEAKING TO THE MEDIA AFTER A LUNCHEON SPEECH TO THE CANADIAN CHAMBER OF COMMERCE.

ΤΟ THAT INCREASES AT RATES PEOPLE'S

"OF COURSE. WE ARE NOT PROPOSING TO ISSUE BILLS EXTENT BECAUSE WE ARE PROPOSING A CAP WHICH WILL BRING THE DOWN TO 20 PER CENT IN THE FIRST YEAR, SO WE ARE LOOKING REVALUATION WHICH IN TERMS OF THE BILL WHICH WILL COME INTO HANDS WILL BE QUITE A LOT LESS THAN THE INCREASE IN THE CPI(A) OVER THE PERIOD," HE SAID.

"WE ARE NOT CHANGING THE PERCENTAGE. THE TOTAL PERCENTAGE REMAINS AT 5.5 PER CENT," HE ADDED.

HE NOTED ADDING THAT $1.1 GETTING FROM THE MUNICIPAL COUNCILS

THAT THIS PERCENTAGE WAS HISTORICALLY VERY LOW, BILLION OF THE REVENUE THAT THE PUBLIC WOULD BE RATES INCREASE NEXT YEAR WOULD GO TO THE TWO WHILE THE BALANCE WOULD GO INTO GENERAL REVENUE.

"OVER THE PERIOD OF THE FORECAST, YOU'RE TALKING ABOUT $9 OR 10 BILLION. SO IT'S NOT A SMALL SUM AND IT FITS INTO THE BUDGET PACKAGE RATHER NICELY.

'I THINK IT'S A PITY IF ANYONE TRIES TO PICK OUT FROM WHAT IS BASICALLY A SERIES OF MEASURES WHICH SHOULD BE VERY WELCOME ONE MEASURE WHICH IS MILDLY DISAGREEABLE," HE SAID.

WHEN ASKED ABOUT THE CRITICISM OF THE RATES INCREASE PROPOSAL FROM THE POLITICAL PARTIES, SIR HAMISH STRESSED THAT THE GOVERNMENT ATTACHED A LOT OF IMPORTANCE TO KEEPING REVENUE IN LINK WITH INFLATION.

"ONE OF THE REASONS PRECISELY THAT WE HAVE A GOOD REVENUE POSITION, A GOOD FISCAL POSITION, IS WE HAD DONE THAT IN THE PAST.

**IF WE CAN'T GRIT OUR TEETH A LITTLE BIT AND KEEP FEES AND CHARGES AND RATES AND THE LIKE UP WITH INFLATION, THEN THE CORE OF OUR REVENUE WILL GRADUALLY BE NIBBLED AWAY AT. SO I VIEW IT IS QUITE IMPORTANT TO IMPLEMENT THE INCREASE," HE SAID.

RESPONDING TO A SUGGESTION THAT THE GOVERNMENT COULD SURVIVE WITHOUT A RATES INCREASE IN VIEW OF THE AMOUNT OF SURPLUS THE GOVERNMENT HAD, SIR HAMISH EXPLAINED THAT HE HAD TAKEN THE REVENUE POSITION INTO ACCOUNT AND THAT WAS THE REASON WHY HE HAD NOT ATTEMPTED TO INCREASE THE PERCENTAGE CHARGE ON RATES.

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