XN000022-1994-06-22 — Page 33

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WEDNESDAY, JUNE 22, 1994

GOVERNMENT-OWNED PROPERTIES ON GOVERNMENT SITES PROVIDE A TOTAL NET FLOOR AREA OF ABOUT FOUR MILLION SQUARE METRES.

THIS CONSISTS OF SOME 0.72 MILLION SQUARE METRES OF OFFICE SPACE, 1.22 MILLION SQUARE METRES FOR RESIDENTIAL USE AND TWO MILLION SQUARE METRES OF SPECIAL ACCOMMODATION, INCLUDING SCHOOLS, HOSPITALS, POLICE AND FIRE STATIONS.

CONSUMER PRICE INDEX VALIDLY REFLECTS INFLATION TRENDS

* * * *

THE SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, TODAY (WEDNESDAY) REITERATED THAT THE CONSUMER PRICE INDEX (CPI) WAS A VALID MEANS OF REFLECTING THE CURRENT INFLATION TRENDS.

CLARIFYING

F

MISCONCEPTION THAT THE INDEX WAS NOT BASED ON ADEQUATE PRICE DATA, MR CARTLAND SAID THE CRITICISM WAS UNFOUNDED BECAUSE A CONTINUOUS PRICING SURVEY WAS UNDERTAKEN BY THE CENSUS AND STATISTICS DEPARTMENT.

A TOTAL OF SOME 40,000 PRICE QUOTATIONS ARE COLLECTED BACH MONTH FROM 3,500 DIFFERENT OUTLETS AND SERVICE PROVIDERS, HE SAID IN A REPLY ΤΟ THE HON ROGER LUK KOON-HOO0'S QUESTION IN THE LEGISLATIVE COUNCIL.

PEOPLE TEND TO REMEMBER ITEMS THAT HAVE HAD DRASTIC, PRICE INCREASES BUT TO OVERLOOK OR FORGET THOSE WHERE THE HAVE BEEN NEGLIGIBLE, HE SAID.

FREQUENT INCREASES

OF THE

NOT ONLY DO THEY TEND TO IGNORE THE OFFSETTING EFFECT LOWER INCREASES, BUT THEY ALSO OVERLOOK THE FACT THAT MANY OF THE LOWER INCREASES OCCUR IN ITEMS THAT ACTUALLY REPRESENT QUITE A SIGNIFICANT SHARE OF HOUSEHOLD EXPENDITURE, HE ADDED.

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MR CARTLAND SAID SOME PEOPLE FAILED TO DISTINGUISH A GENUINE PRICE INCREASE FROM AN INCREASE IN EXPENDITURE OWING TO AN INCREASE IN. THE QUANTITY THEY CONSUMED OR IMPROVEMENT IN THE QUALITY OF THEIR

CONSUMPTION.

"THESE CHANGES SHOULD NOT BE ATTRIBUTED TO PRICE CHANGES AND HENCE 'INFLATION'.

"THE CPI IS INTENDED TO MEASURE THE EFFECTS OF PRICE CHANGES ON THE TOTAL EXPENDITURF AS DEFINED BY A GIVEN BASKET OF GOODS AND

SERVICES.

H

HE SAID THE EXPENDITURE PATTERN ADOPTED BY THE CPI REPRESENTED THE COLLECTIVE EXPENDITURE PATTERNS OF HOUSEHOLDS.

"WHILE INDIVIDUAL EXPERIENCES MAY VARY, THE CPI REFLECTS COLLECTIVELY THE INFLATION SITUATION FACED BY

ALL HOUSEHOLDS,' HE

SAID.

REFERRING TO CONCERNS THAT THE INFLATION SITUATION REFLECTED BY THE CPI

CPI WOULD SOON BE OUTDATED AS THE EXPENDITURE PATTERNS OF HOUSEHOLDS CHANGED OVER TIME, MR CARTLAND SAID THIS WAS NOT TRUE.

/EXPENDITURE PATTERNS

T/