TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 22

Sir,

In rising to present this my first Budget,

Budget, I wish to

acknowledge the considerable debt that I Owe my predecessor, Sir John Bremridge. Through his efforts our public finances are

now in a strong position and we can look forward with reasonable confidence to broadly balanced budgets over the next few years. Our trading position is excellent and our currency stable. had difficulties in the past, but we overcame them.

2.

We

The early nineteen eighties were not easy. Hong Kong went through political uncertainties with all the economic

consequences. By taking the long term view Sir John was able to

achieve the adjustments required, avoiding both draconian

revenue measures and any major disruption to services. Business

went on,

on, and that is what any Financial Secretary must seek to

ensure.

3.

Although we are now in a much sounder position, the

lessons we have learned remain valid. Hong Kong is as

vulnerable as ever to external forces. It is inevitable that we

will experience volatility in our economic performance. Whilst

the economy has improved in 1986, perhaps beyond our

expectations, there are, as usual, some clouds on the horizon. Protectionism still remains a worrying threat. I have no doubt

that in managing our public finances we should not take action that is likely to aggravate the volatility in our economy. We

must at all times pay careful attention to the underlying

trends, and ensure

that our budgetary management is characterized by stability.

4.

As far as possible I intend to adhere to the policies

that we have successfully followed in the past. In particular, I see no place for deficit financing as a permanent feature of fiscal policy, although I recognize that on occasions it may be inevitable that deficits have to be faced. They will also have

be dealt with

SO that we return to balance without undue

to

1

/delay