TNAG-1361-FCO40-1807-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 99

Sir,

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DRAFT SPEECH BY HON STEPHEN CHEONG, OBE,

LEGISLATIVE COUNCIL 27.3.85

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Budget Debate 1985

JP

I do not think there is anyone in this Council, or indeed any right-minded person in Hong Kong, who would disagree with the Dickensian view taken by the Financial Secretary of the Government's budgetary strategy. This stance has served us well in the past and I believe that it will continue to serve us well in the future. I would therefore give my wholehearted support to efforts made by the Administration to continue applying downward pressure on public sector expenditure, particularly recurrent expenditure, and applying upward pressure on revenue. I would like, however, to offer a few

observations.

For many years now successive Financial Secretaries have developed a set of budgetary guidelines by which recurrent revenue, as reduced by recurrent expenditure, would produce a surplus to finance a part of our capital spending programmes, and the surplus on recurrent account taken together with capital revenue would go towards meeting capital expenditure. Times have now changed. Over the past few years, the level of capital revenue has fallen sharply and, having regard to the provisions of the Sino-British Joint Declaration, is unlikely to contribute as high a proportion towards our capital spending as was the case in the 1970s.

So my first observation is that the time may have come for the Government to review and, if necessary, update the budgetary guidelines stated in footnote (7) of Appendix A of the Budget Speech. I would like to see these guidelines rationalised de novo and projected forward as medium-term objectives, that is to say,

is to say, as objectives which could be pursued with a degree of continuity whoever may be steering the course of our budgetary policies, so that this Council may be confident that the Government would not only be working towards achieving a balanced budget in 1986-87, but would also stay on this course in the years to come

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