- 4
will not allow us
to pay ourselves more than our products
will earn.
B.
INFLATION
6.
Our
current estimate is that inflation will average
9.5% for 1990 as a whole. With inflation of this level and
the prospect of it
crisis, rather than
rising as a result of the Middle East
falling as we had expected, we clearly
cannot afford to be complacent. Nor can we expect an easy
cure for inflation.
Drastic measures aimed at suppressing
counter-productive.
price increases would be
frustrate the free play of
They would
market forces and do lasting
damage to the economy. This sort of interference with the
market would not be in character for Hong Kong. But we can,
as well as being sensible about wages, try to limit the
damaging effects of rising prices.
7.
create
Our first priority must be to ensure that we do not
undue pressure on scarce resources and, in this
fuel inflation. We will all have to accept that, for
the immediate future at any rate, we will not have the
way,
surplus revenue to meet all the
competing
claims for
/additional
- 5 -
additional
to
public spending.
There will be difficult choices
make between demands for new services. There can be no
ducking these hard choices.
dictate that public
control.
Current economic conditions
expenditure must be kept under tight
8.
is
determined
to
As the territory's biggest employer, the Government
make sure that it does not add to the
pressures
on
an already strained labour
market.
Departments will face zero
Accordingly, next year, many
growth.
Branches
If standards are to be maintained, individual
and Departments
will have
to strive for
productivity gains through the better use of the staff and
other resources under their control. This will be a real
challenge. It will be a test of management and leadership.
9.
sector.
In
The bulk of the labour force works in the private
The success of the economy depends heavily on the
ability of private employers to maximise productivity.
practice, there are limits to how far employers can replace
workers with new plant and equipment.
accepts that many firms have already reached these limits:
in some cases they cannot expand
The Government
their businesses any
further because
they cannot find
enough workers locally.
/There
There is a genuine danger that the acute shortage of labour
may act as а brake on future economic growth. When that
happens, everybody suffers.
remain, to encourage growth.
Our policy has been, and will
10.
That is Why we
have
relaxed the controls on the
importation of labour in certain crucial areas of the
economy. This does not mean cheap labour: employers will be
pay imported workers market wages. There will
indiscriminate importation of untrained labour.
required
be
no
Effective
abuse by
to
enforcement arrangements will be made to prevent
employers. The scheme will be kept under careful
review, and will be adjusted if necessary, to make sure that
it
continues
to
meet the changing needs of the economy. A
of approach
--
involving adapting to new
similar flexibility
circumstances in a way which will benefit Hong Kong, rather
than sticking rigidly to outdated policies lies behind the
allow the private sector to recruit students
decision
to
from China
to
work in Hong Kong, provided they have
completed at least two years' study overseas and are
properly qualified.
11.
All
of these things matter
economy is crucial to everything we do.
because a successful
Without it, we lack
/the
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