TNAG-0453-FCO40-518-Budget-of-Hong-Kong-1974-1975-1975 — Page 148

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37.

So I come to the other easy way out suggested by some honourable Members: the raising of loans. Apart from

my honourable Friend Mr. Wilfred Wong, all who referred to

loan financing agreed with me that we should limit ourselves

to directly self-liquidating projects, that is to say,

projects which generate an identifiable cash flow

I do not believe it will be difficult to find a number of

such projects but, equally, I do not believe that there is an unlimited market to be tapped. For one thing, the Mass

Transit Railway Corporation will have to raise over $2,000

million in the forecast period from the open market and so the Government should limit itself, so far as is possible, to

raising loans from development banks. And development banks

do not have unlimited funds to offer (though I shall press the

point home with the Asian Development Bank that we are an

under-borrowed developing member country).

38.

So there are no easy solutions on the revenue side

and this unpalatable fact must be faced. A package approach

is essential: extra revenue must be squeezed out of fees and

charges of all kinds by updating them regularly and I include

here the fees and charges raised by our public utility type

undertakings and by our licensing system. I have no doubt that every proposed updating exercise be it for water supplies

or railway fares or postal services will involve cantankerous

argument with my colleagues, with public bodies, with trade

associations and, of course, with honourable Unofficial Members,

though I am grateful to my honourable Friend Mr. Q.W. Lee for

volunteering acquiescence in a steep rise in the fee for banking

licences and I am happy to inform him that I propose to recommend

that it be at least doubled. Rate revenue must be maintained

in spite of postponements of revaluations, Our reserve of

indirect tax taxability will have to be progressively tapped. Loans for self-liquidating projects must play their appropriate

role. And, finally, there is our reserve of direct tax

taxability which must be exploited by increased administrative

efficiency, by rectifying the eroding effect of case law and

accounting devices on the width of the tax base and, as a last

resort, by raising the standard rate.

39.

Most honourable Members seem to be opposed to any

increase in the standard rate of earnings and profits tax.

/So.....