XN000022-1994-03-16 — Page 7

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WEDNESDAY, MARCH 16, 1994

GOVERNOR: I THINK THAT THE COMMUNITY EXPECTS THE GOVERNMENT TO BEHAVE RESPONSIBLY AND PRUDENTLY OVER PUBLIC FINANCES. WE ARE

AS WE WERE OBLIGED ΤΟ

IN THE PROCESS OF A REVALUATION OF PROPERTY. THAT TAKES ACCOUNT OF WHAT'S HAPPENED TO THE VALUE OF PROPERTY OVER THE LAST FEW YEARS. NOT TO HAVE A REVALUATION WOULD FRANKLY BE UNFAIR. AT THE MOMENT, RATES REPRESENT ABOUT TWO PER CENT OF HOUSEHOLD INCOME. IF YOU ADD THE CONSEQUENCES OF THE REVALUATION, THAT FIGURE WILL GO UP FROM TWO PER CENT TO ALL OF 2.1 PER CENT. NOW THAT DOESN'T SEEM TO ME TO BE AN ISSUE WHICH JUSTIFIES SOME OF THE THINGS WHICH HAVE BEEN SAID IN THE LAST FEW WEEKS. THE FINANCIAL SECRETARY PUT FORWARD AN EXTREMELY SENSIBLE BUDGET IN WHICH HE CUT TAXES, IN WHICH HE INCREASED SPENDING ON ISSUES LIKE SOCIAL WELFARE, IN WHICH HE WAS ABLE TO ANNOUNCE A CONSIDERABLE INCREASE IN OUR RESERVES, IN WHICH HE WAS ABLE TO PUT MORE MONEY ASIDE FOR THE FUTURE. I THINK THAT IN THOSE CIRCUMSTANCES, IT DOESN'T MAKE VERY MUCH SENSE FOR US TO THROW AWAY $1.8 BILLION WHICH IS WHAT IT WOULD COST IN ORDER TO MEET SOMETHING WHICH FRANKLY I DON'T BELIEVE IS A CONSIDERABLE SOCIAL PROBLEM. SO I HOPE THAT EVERYBODY WILL BEHAVE RESPONSIBLY, AND SPEAKING FOR THE GOVERNMENT, I WANT TO MAKE IT ABSOLUTELY CLEAR THAT WHATEVER HAPPENS, WE ARE NOT GOING TO BE IMPRUDENT WITH HONG KONG'S FINANCES. JUST ONE OTHER POINT, WE'VE AGREED, WE'VE ACCEPTED THAT THERE SHOULD BE A LOW CAP ON THE INCREASE IN RATES. WE'VE SET THAT CAP AT 20 PER CENT WHICH IS SUBSTANTIALLY BELOW THE FIGURE FOR INFLATION OF ABOUT 33 PER CENT OVER THE LAST THREE YEARS. SO, NOBODY CAN SAY THE GOVERNMENT ISN'T TRYING TO PROTECT PEOPLE FROM THE VERY MARGINAL CONSEQUENCES OF RATING REVALUATION. I FIND IT VERY SURPRISING THAT SOME PEOPLE ON THE ONE HAND ACCUSE THE GOVERNMENT OF NARROWING THE TAX BASE WHILE AT THE SAME TIME THEY ARE SUGGESTING THAT WE REALLY SHOULD NARROW THE TAX BASE BY NOT LETTING THIS REVALUATION GO AHEAD. SO I HOPE THAT WISDOM WILL PREVAIL IN THIS CIRCUMSTANCE AND THAT WE CAN MAKE SURE THAT WHEN WE SPEND MONEY, WE SPEND IT IN SENSIBLE AND APPROPRIATE WAYS ON DEALING FOR EXAMPLE WITH SOME OF THE SOCIAL PROBLEMS THAT PEOPLE HAVE BEEN TALKING TO ME ABOUT TODAY. ONE MORE QUESTION.

QUESTION: CONCERNING THE COURT OF FINAL APPEAL, IS IT SO STRANGE THAT THE GOVERNMENT ALLOWS DISCONTINUITY POLITICALLY FOR THE POLITICAL SYSTEM, BUT FOR THE COURT OF FINAL APPEAL, MR RICHARD HOARE YESTERDAY STRESSED THAT THERE SHOULD BE CONTINUITY OTHERWISE THERE WILL BE A LEGAL VACUUM AT THE TOP OF THE JUDICIAL SYSTEM?

GOVERNOR: WELL, THERE IS

APPRECIATED DIFFERENCE IN THE CASE OF THE COURT OF FINAL APPEAL. AN AGREEMENT WAS REACHED BETWEEN BRITAIN AND CHINA. AN AGREEMENT WAS REACHED ON THE STRUCTURE OF THE COURT OF FINAL APPEAL AND I DON'T THINK WE CAN GO BACK TO THE NEGOTIATING TABLE AFTER THAT AGREEMENT WAS REACHED AND SAY WE NOW WANT A DIFFERENT AGREEMENT. I DON'T THINK CHINESE OFFICIALS WOULD REGARD THAT AS ACCEPTABLE BEHAVIOR. SO I THINK THERE IS A DIFFERENCE BETWEEN THAT AND THE QUESTION OF POLITICAL DEVELOPMENT WHERE THERE HAVEN'T BEEN AN AGREEMENT ON THE ELECTORAL ARRANGEMENTS. WE TRY TO GET ONE IN THE 17 ROUNDS OF TALKS BUT ALAS DIDN'T DO SO. THE EXECUTIVE COUNCIL IN THE NEXT FEW WEEKS, PROBABLY NEXT MONTH, WILL CONSIDER A DRAFT BILL ON THE COURT OF FINAL APPEAL. WE'LL THEN WANT TO DISCUSS THAT WITH THE LEGAL PROFESSION IN HONG KONG AND WITH THE CHINESE SIDE. WE'LL THEN PUT IT TO THE LEGISLATIVE COUNCIL AND I HOPE THE LEGISLATIVE COUNCIL WILL AGREE THAT THE COURT SHOULD BE SET UP AS SOON AS POSSIBLE SO THAT IT'S GOT SOME EXPERIENCE OF OPERATING BEFORE 1997. THANKS VERY MUCH INDEED.

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