TNAG-0735-FCO40-939-Policy-objective-for-the-developing-of-Hong-Kong-in-the-1980-1978 — Page 70

sir,

Introduction

I shall do my best not to turn the closing stages of this

interesting debate on His Excellency's annual review of the

Government's policies and programmes into a mini-budget debate.

We have a long tradition in Hong Kong of limiting ourselves,

deliberately, to an annual statement of account. Apart from our supplementary estimates procedure, the authorities contained in the Approved Estimates of Expenditure remain valid throughout

the year;

and, generally speaking, proposals for changes in tax

rates or in fiscal policy are always announced in the context of

the annual statement of account. This is not to say that commentary is inappropriate during a year. As we are currently

passing through rather strenuous times, I welcome this

opportunity to state the Government's view on the present

course of the economy and I shall take "inflation" as my

central theme. In the latter part of this speech, I shall

deal with several proposals put forward for improving the

prospects of our economy in the longer term.

(1)

2.

I Inflation

Unofficial Members' worries

Four honourable Members have provided me with succinct

texts for my analysis of "inflation". Mr. James Wu believed

that "very high domestic demand" has "stunted export growth"

and that "there is no substitute for reduced domestic demand

and increased exports"; Mr. Hilton Cheong-Leen said "we are

today faced with a situation where too much money is chasing

after too little land" creating "unhealthy speculation and

spiralling land costs"; Miss Dunn argued that "domestic

inflation

is a direct

outcome of excessive domestic

demand coupled with a high level of Government activity";

and

/Mr.