TNAG-1728-FCO40-2441-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 263

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the ultimate aim of economic development and financial policy. Rather, it should be the creation of wealth so that the whole community can benefit from it and the standard of living can be improved. Sir, I must point out that there has not been any significant increase in the proportions of economic services expenditure in the past five years. Instead, its slice of the cake

Since will even be slightly reduced in the next five years.

bercant 1983/84, the average share would have been maintained at 4 or below for nine years. As for community services such as transport, land and civil engineering and water, the share of spending on these services would have been reduced from 27.2% in 1983-84 to 21.1 in 1991-92. Yet no concrete decision has been reached on some of the long term infrastructural development projects that are of great importance to the future development of Hong Kong and to cope with the continuous industrial and commercial development, such as the

This new airport and the further expansion of the container port. situation is indeed worrying. I earnestly hope that the Government will give detailed explanation and conduct a review on these issues.

kar cent

per cent

Sir, lastly, I would like to touch on the subject of the During fiscal reserves in the Government General Revenue Account. the Budget Debate last year, I pointed out that the reserves appeared to be relatively low and that there was a need for review. Last month, the Financial Secretary stated in his speech that there can be no absolute guideline as to a satisfactory level of reserves*, possibly as

I agree possibly as a response to my earlier comment. that it is difficult to have an absolute objective guideline or rule to determine the level of reserves. However, I think that with the Government's budgetary philosophy such as: "to live within one's means", "to keep a balanced revenue and expenditure account" and

low tax rates the Budget, the key to the financial policy is to "save for the rainy day", that is, the reserves should be expanded in the years when the revenue yield is high (as in the past two years), so that during times of economic downturn when the revenue level is low, they can be used as an instrument to avoid tax

increase.

In this respect, I have mixed feelings towards the tax