year's Budget has been approved. For example, the preparations for this year's Budget began with the updating of the Medium Range Forecast in May last year. This provided the basis for assessing the priorities for additional expenditure, taking into account past policy decisions, the views expressed by Members of this Council and the community in general. We then apply our budgetary guidelines before assessing the implications and options on the revenue side of the Budget package.
4.
The result is a carefully balanced package of proposals which takes account of the competing needs and interests of the community, as well as of our ability to pay, looking not only at the year ahead but at the whole planning period.
5.
It will be clear from what I have said about the timescale of the Budget process, that the key to a fruitful exchange between the Legislative Council and the Government is an early discussion of priorities and objectives. The very nature of this process means that hard choices have to be made, but I have no doubt that, through co- operation, we can make the process work. For my part, I can state now, in clear terms, my willingness to meet early in the Budget process to hear Members' views on priorities.
6.
Having said this, I must make it clear that I have great difficulty with the idea that the Budget package can be unscrambled and renegotiated once it has been announced. This is not to treat this Council as a rubber stamp; it is simply to acknowledge that the Budget is too complex and too important to be renegotiated at the final stage. Some Members have made the point that they see the reduction in tobacco tax last year as a precedent for revising this year's package. I do not agree. Last year's increase was a health measure, not a revenue measure, and would normally have been dealt with outside the Budget framework.
7.
It is one thing to ensure that the views of this Council and the community are taken into account as we prepare our proposals. It is quite another matter to accept the notion that the process should be open-ended. Decisions must be reached on the proposals presented to the Legislative Council, and we cannot become embroiled in a protracted series of negotiations after the Budget Speech. Such a development would be a recipe for uncertainty and instability, and it could seriously undermine confidence in Hong Kong and its Government.
8.
Such a development would be particularly unacceptable this year. This Budget has been carefully structured to deal with our expenditure and revenue requirements, not only for next year but for the years leading up to 1997. It is designed to provide certainty to the business community and to lenders to our major infrastructure projects. The indications are that the public shares the Government's belief that the Budget will provide this certainty, and that it would be unravelled only at a high cost, literally and metaphorically, to the whole community. For these reasons, I have made it very clear that I will not be introducing any changes to this Budget. But I have indicated a willingness to look at ways of addressing some of Members' key concerns separately. I will return to this point later in this Speech.
4
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