TNAG-0453-FCO40-518-Budget-of-Hong-Kong-1974-1975-1975 — Page 228

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2.

GRPS 410

PRIORITY

CYPHER/CAT A

FR HONG KONG 2704152

CONFIDENTIAL

CONFIDENTIAL

RECEIVED

REGISTRY B

-1 MAR 1974 TOP COPY HKK5/20

TO PRIORITY F C O TELNO 257 OF 27TH FEBRUARY, 1974. INFO PRIORITY HONG KONG GOVERNMENT OFFICE LONDON.

FOR STUART, HKIOD.

RE

NEXT

REF

M.I.F.T. CONTAINS A SUMMARY OF THE FINANCIAL SECRETÁRY'S

BUDGET SPEECH BEING MADE TODAY.

2. THE BUDGET FOR 74/75 INVOLVES ONLY MINOR TAX INCREASES

مقالات

$31 m

THESE

9

AMOUNTING TO DOLLARS 175 MILLION HOWEVER, THE SPEECH ALSO INDICATES REVENUE AND EXPENDITURE ON THE BASIS OF PRESENT FORECASTS FOR 75/76 TO 77/78 AND OF THE CAPITAL WORKS ELEMENT ONLY IN EXPENDITURE AS NOW FORECAST FOR THE TEN YEAR PERIOD 74/75 TO 83/84. REFLECT THE FULL IMPACT OF OUR NEW SOCIAL PROGRAMMES, AND AS THEY NOW STAND THESE HAVE AN INDIGESTIBLE HUMP DURING THE PERIOD 75/76 TO 77/78, AND SHOW A GAP BETWEEN CAPITAL EXPENDITURE AND AVAILABLE FINANCIAL RESOURCES OVER THE TEN YEAR PERIOD. CONSIDERING RECENT

INFLATION THIS IS NOT SURPRISING,

3. THE IMPLICATION OF THESE FORECAST IS THAT FOR THE POLICIES TO BE SUSTAINED THERE MUST BE BOTH SOME REPHASING AND ALSO INCREASED

TAXATION.

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THE OBJECT OF THIS PRESENTATION IS TO BRING HOME TO BOTH

LEGISLATIVE COUNCIL AND THE PUBLIC WHAT THE FACTS ARE, AND ALSO TO BRING PUBLIC OPINION TO BEAR SO THAT UNOFFICIALS DO NOT RUN OUT

WHEN CONFRONTED WITH HIGHER TAXES NEXT YEAR,

Sa

I OF COURSE ENTIRELY SUPPORT THE FINANCIAL SECRETARY IN THIS

BOLD APPROACH, BUT IT IS POSSIBLE THAT THE PRESENTATION OF THESE VERY LARGE FIGURES (SEE PART IV OF MIFT) WILL COME AS A SHOCK,

AND SHAKE CONFIDENCE EITHER IN THE SOUNDNESS OF HONG KONG'S

ECONOMY OR IN THE DETERMINATION OF THE GOVERNMENT TO SEE THESE

PROGRAMMES THROUGH. THE SHOCK WOULD RESULT FROM THE GAP BETWEEN

THE FORECAST OF EXPENDITURE AND AVAILABLE REVENUE.

CONFIDENTIAL

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