XN000022-1994-03-30 — Page 36

WEDNESDAY, MARCH 30, 1994

"AND THAT WE NEED TO CONTINUE TO REASSURE OUR OWN GRADUATES THAT THEIR PROSPECTS ARE NOT SIGNIFICANTLY REDUCED."

HE

SAID HONG KONG'S INFLATION CONTINUED ΤΟ BE LOCALLY GENERATED, WITH SHORTAGES OF LABOUR AND LAND BEING THE TWO MAIN UNDERLYING FACTORS.

IMPORTED INFLATION REMAINS INSIGNIFICANT, STABLE IMPORT PRICES IN OVERALL TERMS, HE SAID.

AS REFLECTED BY

THOSE CONSUMPTION ITEMS SHOWING A FASTER INCREASE IN PRICES THAN THE OVERALL CONSUMER PRICE INDEX HAVE A RELATIVELY HIGHER LOCAL INPUT CONTENT.

THE MAIN EXAMPLES ARE HOUSING, TRANSPORT, MEALS AT RESTAURANTS AND VARIOUS OTHER CONSUMER SERVICES.

"I TAKE CAUTIOUS COMFORT FROM THE FACT THAT IN THE FIRST TWO MONTHS OF 1994. THERE WAS A FURTHER MODERATION IN CONSUMER PRICE INFLATION."

THE

THE CPI(A) IN THESE TWO MONTHS ROSE BY AN AVERAGE OF 7% OVER SAME PERIOD LAST YEAR. THIS COMPARES FAVOURABLY WITH THE CORRESPONDING INCREASE OF 8.5% FOR 1993 AS A WHOLE. IT IS ALSO BELOW THE FORECAST RATE OF INCREASE, ALSO OF 8.5%, FOR 1994.

FS UPHOLDS PRUDENT FINANCING

*

THE FINANCIAL SECRETARY, THE HON SIR HAMISH MACLEOD, SAID TODAY (WEDNESDAY) HE WOULD CONTINUE TO HOLD THE BALANCE BRTWEEN COMPETING CLAIMS, AND BETWEEN REVENUE AND EXPENDITURE IN A PRUDENT MANNER.'

CONCLUDING THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, SIR HAMISH POINTED OUT THREE SIMPLE FACTS TO REASSURE THOSE WHO THOUGHT HE HAD BECOME IMPRUDENT.

DESPITE THE TAX CONCESSIONS, TOTAL REVENUE IS ESTIMATED

INCREASE FROM $164 BILLION IN THE 1993/94 REVISED

TO $177 BILLION IN THE 1994/95 ESTIMATES;

TO

ESTIMATES

* GROWTH IN GOVERNMENT EXPENDITURE CONTINUES TO BE KEPT IN

LINE WITH THE GROWTH OF THE ECONOMY;

LARGE RESERVES EXIST PRECISELY ΤΟ ENABLE HONG KONG ΤΟ WEATHER ANY TEMPORARY DOWNSIDES.

-

HE ALSO SAID THE KEY TO FINANCIAL STABILITY WAS TO MAINTAIN THE REVENUE IN REAL TERMS FROM A MIX OF SOURCES BE THEY FEES AND CHARGES, DUTIES OR TAXES.

/SIR HAMISH