TNAG-2251-FCO40-3235-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-fina-1991 — Page 142

17.

The

Memorandum requires the Hong Kong Government, on the basis Of the understandings recorded in the MOU, to plan

its finances with the firm objective that the fiscal reserves

to be left for the use of the Hong Kong SARG on 30 June 1997

will not be less than $25 billion (at money of the day price).

This is within the level of fiscal reserves in our long-term

financial projection and would not unduely constrain planning of the Hong Kong Government's finances.

the

Conclusion

18.

In sum, with Chinese support of the ACP and with

careful financial management by the Hong Kong Government, the

levels Of spending on the ACP can be recommended. The private

sector participation will be robust. Public expenditure in

other areas will still enjoy growth at a reasonable level, the

low taxation regime in Hong Kong will still continue, and the

Hong Kong SARG will start with a healthy financial position.

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