XN000022-1994-03-30 — Page 41

WEDNESDAY, MARCH 30, 1994

BUT THE HIGHER DUTY WILL ONLY BE A REFLECTION OF THE CONSUMER'S

ABILITY TO PAY, AND IS PROPORTIONAL TO THE COST OF THE PRODUCT.

1% OF

HONG

AND SUCH PRODUCTS, WHICH ACCOUNT FOR WELL UNDER KONG'S TOTAL WINE CONSUMPTION, OCCUPY AN EXCLUSIVE NICHE IN THE MARKET WHERE PRICE

AND PERSONAL IS OF LESS

THAN QUALITY IMPORTANCE PREFERENCES IN DETERMINING CONSUMER CHOICE, HE SAID.

LOWER PROFITS TAX JUSTIFIED

* * * * *

RESTORE

LOWER

LEVEL,

FINANCIAL COUNCIL

AT A TIME WHEN THE FISCAL POSITION PERMITS, IT IS ONLY RIGHT TO

THE TAX TO ITS PREVIOUS, PROFITS SECRETARY, THE HON SIR HAMISH MACLEOD SAID IN THE LEGISLATIVE TODAY (WEDNESDAY).

ΤΟ

IT WILL BE HELPFUL IN ENSURING THAT HONG KONG WILL CONTINUE

INVESTMENT AND REINVESTMENT, ENJOY AN ENVIRONMENT THAT ENCOURAGES

HIGH RENTS, SIR PARTICULARLY AT A TIME WHEN THERE IS CONCERN OVER HAMISH SAID.

CONCLUDING THE BUDGET DEBATE, HE SAID HE BELIEVED THE NATURE OF THIS STEP WAS IMPORTANT.

SYMBOLIC

GOVERNMENT REALLY DOES BY ACTION THAT THIS "IT ILLUSTRATES

POSSIBLE

AND IN BELIEVE

LEVEL, KEEPING TAXES

LOWEST TO THE IN

BE DONE, SO RETURNING MONEY TO THE TAXPAYER WHEN THIS CAN SAFELY

INCENTIVE ΤΟ THE

SUCCEED

BOTH PRESERVING

FOR

INDIVIDUALS

COMPANIES.

AND

IN

"THIS IS ONE OF THE REASONS FOR OUR SUCCESS,

[

SIR HAMISH SAID.

GROWTH

HE STRESSED THAT A KEY BUDGETARY PRINCIPLE WAS TO KEEP

TREND GROWTH OF THE GOVERNMENT

LINE WITH THE EXPENDITURE IN

ECONOMY.

THIS SETS THE LIMIT ON HOW MUCH THE GOVERNMENT CAN SPEND IN THE PUBLIC SECTOR, HE SAID.

A BUMPER YEAR FOR PROFITS TAX DOES NOT THEREFORE TRANSLATE INTO A SUDDEN EXPANSION IN GOVERNMENT SERVICES.

NOR DOES A CUT IN PROFITS TAX RESULT IN A CUT IN EXPENDITURE.

"IT

GIVEN

OUR

IN

IS

BUSINESS BUOYANT ALSO WORTH NOTING THAT OUTLOOK, REVENUE FROM PROFITS TAX IS IN FACT EXPECTED TO INCREASE 1994/95 NOT ONLY IN MONEY TERMS, BUT AS A PROPORTION OF TOTAL REVENUE, EVEN AFTER THE REDUCTION, THE FINANCIAL SECRETARY SAID.

ON

|

EXPENDITURE

SIR HAMISH SAID GROWTIL, WHEN THAT REGARDED IN

THE GROWTH OF PUBLIC EXPENDITURE, RESTRAINING

TO ECONOMIC GOVERNMENT GROWTH WAS RUNNING AT ABOUT 5% IN REAL TERMS, WOULD BE MOST PLACES IN THE WORLD AS NO RESTRICTION AT ALL, BUT ON THE CONTRARY AS GROWTH BEYOND THEIR WILDEST DREAMS.

/**COMPOUND GROWTH