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CONFIDENTIAL
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FROM : S H Broadbent
の √613
DATE : 5 March 1992
cc: Mr Burns
Good points to deploy at 'x'.
to you He came independently Conclusion re (c) - so did
MMC Intyre (HMT).
Hong Kong Department
HONG KONG BUDGET
1.
2. M, Ricketts ofr
m Flin
Mr Cox
ow some
The 10/3
Discursed at hoday's
meeting.
in
10/=
He see han HK, Here is an element of 'damned if you do, damned if you don't' in He Comment in (c).
(c). Mk have
MK have see suljuged to searching equay (hom the Broadbert, inter alia) about te
I have had a quick look at the Financial Secretary's Budget speech, and I have also seen Hong Kong telnos 687 and 688 reporting Lu Ping's unhelpful remarks. We are producing a commentary on the budget, but we have not yet seen the accompanying tables, and I would prefer to do so before venturing very much. Three preliminary comments:
не
affordablite "of PADS." When Hen show its affordable
Hey're told its
(a) The general shape is very much as predicted, although the a miscue !
revenue and expenditure figures for 1991/2 and 1992/3 differ somewhat from those I reported a couple of weeks ago. But I think the general strategy is right ie not plunging into deficit, but continuing surpluses, at least for the time being. It may be necessary to go further.
(b)
(c)
(You
I share the Governor's frustration with Lu Ping's performance. In responding, HK might point out that raising additional revenue was endorsed by the IMF. should note, though, that they favoured indirect taxes; and that this information may not be in the public domain.) Of course, Lu Ping is really having a go at HK's "profligacy" over expenditure, and presumably sees eye to eye with Lord Caithness in recommending more rigorous control of it. HK could take a pretty robust line about acting in the interests of the people of Hong Kong, both in providing the infrastructure necessary for the future and decent public services. Hong Kong's public spending will still be among the lowest in the world as a percentage of GNP. If only we - or China could do as well!
I think it is a very great pity that the FS has drawn attention to the new, much higher level of prospective reserves in 1997. This will inevitably be seen now as a target. I assume he thought this would help to build confidence, and it may. But it would have been much more elegant to say nothing, publish the projections which indicate this level of reserves, and then, if asked,
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