CONFIDENTIAL
(32)
る
Mr J A B Stewart
(KD)
R
2 J Ark 1977
HONG KONG : BUDGET
1.
HKK 100/2
"Jals. Popaste
In millón
zulár
Mr Cortazzi
Mr D F Murray Mr M Stewart [Af
REF
Au Dulty (pl.sp.)
(30
Dfun
2014.
In your minute of 4 April 1977 you asked for my comments on the view the Governor expounded to you on your recent visit, namely that in a Colonial world, economic and social philosophies and policies are traditionally outlined in the Governor's Legco annual opening speech and, by implication, would not be expected to appear in any Colonial Budget presented by a Financial Secretary.
2.
My response would be that whilst the Governor's Legco opening speech does, of course, outline his general philosophy and policies in a qualitative manner, it does not provide sufficient quantitative material of economic merit, or indicate how economic and fiscal techniques are to be used for these ends. The Budget is normally seen, in any industrialised society, as an instrument of achieving economic and social objectives. It is the absence of recognition of this, and its implications in Hong Kong, that is the core of my criticism of their Budget. Hong Kong is no longer a Pitcairn or Tristan de Cunha which can safely operate on an accountants good housekeeping basis. The significance of Hong Kong (the 17th largest trading nation in the world and 4th largest foreign exchange market) rules out, to my mind, such a simple naive approach.
3.
As I indicated in my minute to you of 25 March 1977, their economic thinking needs to be brought up to date (I think the PUS called it "Victoria!), for example; budgetary deficits are no bad thing in that they can create employment; a rising level of public expenditure has significant benefits and severe cutbacks, as in 1975, can be traumatic, etc etc.
4.
Perhaps we could discuss further when we discuss their Budget. care to note that I shall be out of the office from 25 April to 6 May.
19 April 1977
Orman omis
Adrian Smith
Senior Economic Adviser
You may
CONFIDENTIAL
No comments yet.
Private notes are available after approval.