1111 HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992

HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992 1111

OFFICIAL RECORD OF PROCEEDINGSOFFICIAL RECORD OF PROCEEDINGSOFFICIAL RECORD OF PROCEEDINGSOFFICIAL RECORD OF PROCEEDINGS

Thursday, 26 March 1992Thursday, 26 March 1992Thursday, 26 March 1992Thursday, 26 March 1992

The Council met at half-past Two o'clockThe Council met at half-past Two o'clockThe Council met at half-past Two o'clockThe Council met at half-past Two o'clock

PRESENTPRESENTPRESENTPRESENT

THE DEPUTY PRESIDENTTHE DEPUTY PRESIDENTTHE DEPUTY PRESIDENTTHE DEPUTY PRESIDENT

THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P.THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P.THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P.THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P.

THE CHIEF SECRETARYTHE CHIEF SECRETARYTHE CHIEF SECRETARYTHE CHIEF SECRETARY

THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P.THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P.THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P.THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P.

THE FINANCIAL SECRETARYTHE FINANCIAL SECRETARYTHE FINANCIAL SECRETARYTHE FINANCIAL SECRETARY

THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, C.B.E., J.P.THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, C.B.E., J.P.THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, C.B.E., J.P.THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, C.B.E., J.P.

THE ATTORNEY GENERALTHE ATTORNEY GENERALTHE ATTORNEY GENERALTHE ATTORNEY GENERAL

THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P.THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P.THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P.THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P.

THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.

THE HONOURABLE STEPHEN CHEONG KAM-CHUEN, C.B.E., J.P.THE HONOURABLE STEPHEN CHEONG KAM-CHUEN, C.B.E., J.P.THE HONOURABLE STEPHEN CHEONG KAM-CHUEN, C.B.E., J.P.THE HONOURABLE STEPHEN CHEONG KAM-CHUEN, C.B.E., J.P.

THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P.THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P.THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P.THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P.

THE HONOURABLE MRS RITA FAN HSU LAI-TAI, O.B.E., J.P.THE HONOURABLE MRS RITA FAN HSU LAI-TAI, O.B.E., J.P.THE HONOURABLE MRS RITA FAN HSU LAI-TAI, O.B.E., J.P.THE HONOURABLE MRS RITA FAN HSU LAI-TAI, O.B.E., J.P.

THE HONOURABLE HUI YIN-FAT, O.B.E., J.P.THE HONOURABLE HUI YIN-FAT, O.B.E., J.P.THE HONOURABLE HUI YIN-FAT, O.B.E., J.P.THE HONOURABLE HUI YIN-FAT, O.B.E., J.P.

THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.

THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P.THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P.THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P.THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P.

THE HONOURABLE PANG CHUN-HOI, M.B.E.THE HONOURABLE PANG CHUN-HOI, M.B.E.THE HONOURABLE PANG CHUN-HOI, M.B.E.THE HONOURABLE PANG CHUN-HOI, M.B.E.

THE HONOURABLE SZETO WAHTHE HONOURABLE SZETO WAHTHE HONOURABLE SZETO WAHTHE HONOURABLE SZETO WAH

THE HONOURABLE TAM YIU-CHUNGTHE HONOURABLE TAM YIU-CHUNGTHE HONOURABLE TAM YIU-CHUNGTHE HONOURABLE TAM YIU-CHUNG

THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.

THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.

THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.

THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P.THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P.THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P.THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P.

THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P.THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P.THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P.THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P.

THE HONOURABLE LAU WAH-SUM, O.B.E., J.P.THE HONOURABLE LAU WAH-SUM, O.B.E., J.P.THE HONOURABLE LAU WAH-SUM, O.B.E., J.P.THE HONOURABLE LAU WAH-SUM, O.B.E., J.P.

DR THE HONOURABLE LEONG CHE-HUNGDR THE HONOURABLE LEONG CHE-HUNGDR THE HONOURABLE LEONG CHE-HUNGDR THE HONOURABLE LEONG CHE-HUNG

THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P.THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P.THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P.THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P.

THE HONOURABLE MRS ELSIE TU, C.B.E.THE HONOURABLE MRS ELSIE TU, C.B.E.THE HONOURABLE MRS ELSIE TU, C.B.E.THE HONOURABLE MRS ELSIE TU, C.B.E.

THE HONOURABLE PETER WONG HONG-YUEN, J.P.THE HONOURABLE PETER WONG HONG-YUEN, J.P.THE HONOURABLE PETER WONG HONG-YUEN, J.P.THE HONOURABLE PETER WONG HONG-YUEN, J.P.

THE HONOURABLE ALBERT CHAN WAI-YIPTHE HONOURABLE ALBERT CHAN WAI-YIPTHE HONOURABLE ALBERT CHAN WAI-YIPTHE HONOURABLE ALBERT CHAN WAI-YIP

PROF THE HONOURABLE EDWARD CHEN KWAN-YIUPROF THE HONOURABLE EDWARD CHEN KWAN-YIUPROF THE HONOURABLE EDWARD CHEN KWAN-YIUPROF THE HONOURABLE EDWARD CHEN KWAN-YIU

THE HONOURABLE VINCENT CHENG HOI-CHUENTHE HONOURABLE VINCENT CHENG HOI-CHUENTHE HONOURABLE VINCENT CHENG HOI-CHUENTHE HONOURABLE VINCENT CHENG HOI-CHUEN

THE HONOURABLE MOSES CHENG MO-CHITHE HONOURABLE MOSES CHENG MO-CHITHE HONOURABLE MOSES CHENG MO-CHITHE HONOURABLE MOSES CHENG MO-CHI

THE HONOURABLE CHEUNG MAN-KWONGTHE HONOURABLE CHEUNG MAN-KWONGTHE HONOURABLE CHEUNG MAN-KWONGTHE HONOURABLE CHEUNG MAN-KWONG

THE HONOURABLE CHIM PUI-CHUNGTHE HONOURABLE CHIM PUI-CHUNGTHE HONOURABLE CHIM PUI-CHUNGTHE HONOURABLE CHIM PUI-CHUNG

REV THE HONOURABLE FUNG CHI-WOODREV THE HONOURABLE FUNG CHI-WOODREV THE HONOURABLE FUNG CHI-WOODREV THE HONOURABLE FUNG CHI-WOOD

THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P.THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P.THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P.THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P.

THE HONOURABLE MICHAEL HO MUN-KATHE HONOURABLE MICHAEL HO MUN-KATHE HONOURABLE MICHAEL HO MUN-KATHE HONOURABLE MICHAEL HO MUN-KA

DR THE HONOURABLE HUANG CHEN-YADR THE HONOURABLE HUANG CHEN-YADR THE HONOURABLE HUANG CHEN-YADR THE HONOURABLE HUANG CHEN-YA

THE HONOURABLE SIMON IP SIK-ON, J.P.THE HONOURABLE SIMON IP SIK-ON, J.P.THE HONOURABLE SIMON IP SIK-ON, J.P.THE HONOURABLE SIMON IP SIK-ON, J.P.

DR THE HONOURABLE LAM KUI-CHUNDR THE HONOURABLE LAM KUI-CHUNDR THE HONOURABLE LAM KUI-CHUNDR THE HONOURABLE LAM KUI-CHUN

DR THE HONOURABLE CONRAD LAM KUI-SHINGDR THE HONOURABLE CONRAD LAM KUI-SHINGDR THE HONOURABLE CONRAD LAM KUI-SHINGDR THE HONOURABLE CONRAD LAM KUI-SHING

THE HONOURABLE MISS EMILY LAU WAI-HINGTHE HONOURABLE MISS EMILY LAU WAI-HINGTHE HONOURABLE MISS EMILY LAU WAI-HINGTHE HONOURABLE MISS EMILY LAU WAI-HING

THE HONOURABLE LEE WING-TATTHE HONOURABLE LEE WING-TATTHE HONOURABLE LEE WING-TATTHE HONOURABLE LEE WING-TAT

THE HONOURABLE ERIC LI KA-CHEUNG, J.P.THE HONOURABLE ERIC LI KA-CHEUNG, J.P.THE HONOURABLE ERIC LI KA-CHEUNG, J.P.THE HONOURABLE ERIC LI KA-CHEUNG, J.P.

THE HONOURABLE FRED LI WAH-MINGTHE HONOURABLE FRED LI WAH-MINGTHE HONOURABLE FRED LI WAH-MINGTHE HONOURABLE FRED LI WAH-MING

PROF THE HONOURABLE FELICE LIEH MAK, O.B.E., J.P.PROF THE HONOURABLE FELICE LIEH MAK, O.B.E., J.P.PROF THE HONOURABLE FELICE LIEH MAK, O.B.E., J.P.PROF THE HONOURABLE FELICE LIEH MAK, O.B.E., J.P.

THE HONOURALBE MAN SAI-CHEONGTHE HONOURALBE MAN SAI-CHEONGTHE HONOURALBE MAN SAI-CHEONGTHE HONOURALBE MAN SAI-CHEONG

THE HONOURABLE STEVEN POON KWOK-LIMTHE HONOURABLE STEVEN POON KWOK-LIMTHE HONOURABLE STEVEN POON KWOK-LIMTHE HONOURABLE STEVEN POON KWOK-LIM

THE HONOURABLE HENRY TANG YING-YEN, J.P.THE HONOURABLE HENRY TANG YING-YEN, J.P.THE HONOURABLE HENRY TANG YING-YEN, J.P.THE HONOURABLE HENRY TANG YING-YEN, J.P.

THE HONOURABLE TIK CHI-YUENTHE HONOURABLE TIK CHI-YUENTHE HONOURABLE TIK CHI-YUENTHE HONOURABLE TIK CHI-YUEN

THE HONOURABLE JAMES TO KUN-SUNTHE HONOURABLE JAMES TO KUN-SUNTHE HONOURABLE JAMES TO KUN-SUNTHE HONOURABLE JAMES TO KUN-SUN

DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P.DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P.DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P.DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P.

DR THE HONOURABLE PHILIP WONG YU-HONGDR THE HONOURABLE PHILIP WONG YU-HONGDR THE HONOURABLE PHILIP WONG YU-HONGDR THE HONOURABLE PHILIP WONG YU-HONG

DR THE HONOURABLE YEUNG SUMDR THE HONOURABLE YEUNG SUMDR THE HONOURABLE YEUNG SUMDR THE HONOURABLE YEUNG SUM

THE HONOURABLE HOWARD YOUNGTHE HONOURABLE HOWARD YOUNGTHE HONOURABLE HOWARD YOUNGTHE HONOURABLE HOWARD YOUNG

THE HONOURABLE ZACHARY WONG WAI-YINTHE HONOURABLE ZACHARY WONG WAI-YINTHE HONOURABLE ZACHARY WONG WAI-YINTHE HONOURABLE ZACHARY WONG WAI-YIN

ABSENTABSENTABSENTABSENT

THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.

THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.

THE HONOURABLE MRS PEGGY LAM, M.B.E., J.P.THE HONOURABLE MRS PEGGY LAM, M.B.E., J.P.THE HONOURABLE MRS PEGGY LAM, M.B.E., J.P.THE HONOURABLE MRS PEGGY LAM, M.B.E., J.P.

THE HONOURABLE MARVIN CHEUNG KIN-TUNG, J.P.THE HONOURABLE MARVIN CHEUNG KIN-TUNG, J.P.THE HONOURABLE MARVIN CHEUNG KIN-TUNG, J.P.THE HONOURABLE MARVIN CHEUNG KIN-TUNG, J.P.

THE HONOURABLE FREDERICK FUNG KIN-KEETHE HONOURABLE FREDERICK FUNG KIN-KEETHE HONOURABLE FREDERICK FUNG KIN-KEETHE HONOURABLE FREDERICK FUNG KIN-KEE

THE HONOURABLE LAU CHIN-SHEKTHE HONOURABLE LAU CHIN-SHEKTHE HONOURABLE LAU CHIN-SHEKTHE HONOURABLE LAU CHIN-SHEK

THE HONOURABLE GILBERT LEUNG KAM-HOTHE HONOURABLE GILBERT LEUNG KAM-HOTHE HONOURABLE GILBERT LEUNG KAM-HOTHE HONOURABLE GILBERT LEUNG KAM-HO

THE HONOURABLE NG MING-YUMTHE HONOURABLE NG MING-YUMTHE HONOURABLE NG MING-YUMTHE HONOURABLE NG MING-YUM

IN ATTENDANCEIN ATTENDANCEIN ATTENDANCEIN ATTENDANCE

THE CLERK TO THE LEGISLATIVE COUNCILTHE CLERK TO THE LEGISLATIVE COUNCILTHE CLERK TO THE LEGISLATIVE COUNCILTHE CLERK TO THE LEGISLATIVE COUNCIL

MR LAW KAM-SANGMR LAW KAM-SANGMR LAW KAM-SANGMR LAW KAM-SANG

Second Reading of BillSecond Reading of BillSecond Reading of BillSecond Reading of Bill

APPROPRIATION BILL 1992APPROPRIATION BILL 1992APPROPRIATION BILL 1992APPROPRIATION BILL 1992

Resumption of debate on Second Reading which was moved on 4 March 1992Resumption of debate on Second Reading which was moved on 4 March 1992Resumption of debate on Second Reading which was moved on 4 March 1992Resumption of debate on Second Reading which was moved on 4 March 1992

DEPUTY PRESIDENT: Council will resume and continue with the debate on theDEPUTY PRESIDENT: Council will resume and continue with the debate on theDEPUTY PRESIDENT: Council will resume and continue with the debate on theDEPUTY PRESIDENT: Council will resume and continue with the debate on the

Appropriation Bill 1992.Appropriation Bill 1992.Appropriation Bill 1992.Appropriation Bill 1992.

MR ANDREW WONG (in Cantonese): Mr Deputy President, the 1992-93 Budget under debateMR ANDREW WONG (in Cantonese): Mr Deputy President, the 1992-93 Budget under debateMR ANDREW WONG (in Cantonese): Mr Deputy President, the 1992-93 Budget under debateMR ANDREW WONG (in Cantonese): Mr Deputy President, the 1992-93 Budget under debate

in this Council today and yesterday is in fact the maiden Budget presented by myin this Council today and yesterday is in fact the maiden Budget presented by myin this Council today and yesterday is in fact the maiden Budget presented by myin this Council today and yesterday is in fact the maiden Budget presented by my

respectable friend, Mr MacLEOD, the new Financial Secretary. I would like to takerespectable friend, Mr MacLEOD, the new Financial Secretary. I would like to takerespectable friend, Mr MacLEOD, the new Financial Secretary. I would like to takerespectable friend, Mr MacLEOD, the new Financial Secretary. I would like to take

this opportunity to express my appreciation of his efforts in preparing this Budgetthis opportunity to express my appreciation of his efforts in preparing this Budgetthis opportunity to express my appreciation of his efforts in preparing this Budgetthis opportunity to express my appreciation of his efforts in preparing this Budget

and wish him the chance of presenting his second, third, or even fourth and fifthand wish him the chance of presenting his second, third, or even fourth and fifthand wish him the chance of presenting his second, third, or even fourth and fifthand wish him the chance of presenting his second, third, or even fourth and fifth

Budgets in the many years to come.Budgets in the many years to come.Budgets in the many years to come.Budgets in the many years to come.

Mr Deputy President, keeping to my uMr Deputy President, keeping to my uMr Deputy President, keeping to my uMr Deputy President, keeping to my usual style of being straightforward andsual style of being straightforward andsual style of being straightforward andsual style of being straightforward and

outspoken instead of evasive, allow me to state clearly at the beginning that I amoutspoken instead of evasive, allow me to state clearly at the beginning that I amoutspoken instead of evasive, allow me to state clearly at the beginning that I amoutspoken instead of evasive, allow me to state clearly at the beginning that I am

all for the motion to move the Second Reading of the Appropriation Bill. I wouldall for the motion to move the Second Reading of the Appropriation Bill. I wouldall for the motion to move the Second Reading of the Appropriation Bill. I wouldall for the motion to move the Second Reading of the Appropriation Bill. I would

also like to express my support for the Budget in one whole package which includesalso like to express my support for the Budget in one whole package which includesalso like to express my support for the Budget in one whole package which includesalso like to express my support for the Budget in one whole package which includes

its expenditure and revenue proposals. I give my support not just because I am anits expenditure and revenue proposals. I give my support not just because I am anits expenditure and revenue proposals. I give my support not just because I am anits expenditure and revenue proposals. I give my support not just because I am an

Executive Councillor and, therefore, a member of the executive authority, but ratherExecutive Councillor and, therefore, a member of the executive authority, but ratherExecutive Councillor and, therefore, a member of the executive authority, but ratherExecutive Councillor and, therefore, a member of the executive authority, but rather

because the Budget itself deserves support. I would like to commend it to thebecause the Budget itself deserves support. I would like to commend it to thebecause the Budget itself deserves support. I would like to commend it to thebecause the Budget itself deserves support. I would like to commend it to the

Honourable Members.Honourable Members.Honourable Members.Honourable Members.

I have been teaching public finance and public administration in the ChineseI have been teaching public finance and public administration in the ChineseI have been teaching public finance and public administration in the ChineseI have been teaching public finance and public administration in the Chinese

University for the last 21 years during which the annual Budgets have become theUniversity for the last 21 years during which the annual Budgets have become theUniversity for the last 21 years during which the annual Budgets have become theUniversity for the last 21 years during which the annual Budgets have become the

subject of my study. In my view, this year's Budget has carried forward thesubject of my study. In my view, this year's Budget has carried forward thesubject of my study. In my view, this year's Budget has carried forward thesubject of my study. In my view, this year's Budget has carried forward the

philosophy of public finance management on which the continuous success andphilosophy of public finance management on which the continuous success andphilosophy of public finance management on which the continuous success andphilosophy of public finance management on which the continuous success and

prosperity of Hong Kong rely. This is also a much more far-sighted Budget than theprosperity of Hong Kong rely. This is also a much more far-sighted Budget than theprosperity of Hong Kong rely. This is also a much more far-sighted Budget than theprosperity of Hong Kong rely. This is also a much more far-sighted Budget than the

previous ones. For example, its medium range forecast has been extended to coverprevious ones. For example, its medium range forecast has been extended to coverprevious ones. For example, its medium range forecast has been extended to coverprevious ones. For example, its medium range forecast has been extended to cover

1997, thus giving the public a picture of what the economic situation of Hong Kong1997, thus giving the public a picture of what the economic situation of Hong Kong1997, thus giving the public a picture of what the economic situation of Hong Kong1997, thus giving the public a picture of what the economic situation of Hong Kong

will be like in the final year preceding the transfer of its sovereignty. Even Drwill be like in the final year preceding the transfer of its sovereignty. Even Drwill be like in the final year preceding the transfer of its sovereignty. Even Drwill be like in the final year preceding the transfer of its sovereignty. Even Dr

LAW Cheung-kwok of the Hong Kong Association for Democracy and People's LivelihoodLAW Cheung-kwok of the Hong Kong Association for Democracy and People's LivelihoodLAW Cheung-kwok of the Hong Kong Association for Democracy and People's LivelihoodLAW Cheung-kwok of the Hong Kong Association for Democracy and People's Livelihood

has fairly and rightly made some favourable remarks on this point.has fairly and rightly made some favourable remarks on this point.has fairly and rightly made some favourable remarks on this point.has fairly and rightly made some favourable remarks on this point.

Mr Deputy President, I consider that this year's Budget is, on the whole, aMr Deputy President, I consider that this year's Budget is, on the whole, aMr Deputy President, I consider that this year's Budget is, on the whole, aMr Deputy President, I consider that this year's Budget is, on the whole, a

carefully drawn, reasonable and well-balanced statement. Besides, public opinioncarefully drawn, reasonable and well-balanced statement. Besides, public opinioncarefully drawn, reasonable and well-balanced statement. Besides, public opinioncarefully drawn, reasonable and well-balanced statement. Besides, public opinion

has, in general, suggested that the Budget is good or acceptable as a whole.has, in general, suggested that the Budget is good or acceptable as a whole.has, in general, suggested that the Budget is good or acceptable as a whole.has, in general, suggested that the Budget is good or acceptable as a whole.

According to the findings of an opinion poll earlier on conducted by a market surveyAccording to the findings of an opinion poll earlier on conducted by a market surveyAccording to the findings of an opinion poll earlier on conducted by a market surveyAccording to the findings of an opinion poll earlier on conducted by a market survey

company on behalf of a local newspaper, the Budget was, on the whole, found to becompany on behalf of a local newspaper, the Budget was, on the whole, found to becompany on behalf of a local newspaper, the Budget was, on the whole, found to becompany on behalf of a local newspaper, the Budget was, on the whole, found to be

acceptable by nearly 70% of the respondents, despite its average scoring of only 44.52acceptable by nearly 70% of the respondents, despite its average scoring of only 44.52acceptable by nearly 70% of the respondents, despite its average scoring of only 44.52acceptable by nearly 70% of the respondents, despite its average scoring of only 44.52

points, which is below the "passing mark" of 50.points, which is below the "passing mark" of 50.points, which is below the "passing mark" of 50.points, which is below the "passing mark" of 50.

I fully agree to the comments made by several Honourable Members yesterday thatI fully agree to the comments made by several Honourable Members yesterday thatI fully agree to the comments made by several Honourable Members yesterday thatI fully agree to the comments made by several Honourable Members yesterday that

it was difficult for any Budget to satisfy and please everybody. It is anit was difficult for any Budget to satisfy and please everybody. It is anit was difficult for any Budget to satisfy and please everybody. It is anit was difficult for any Budget to satisfy and please everybody. It is an

indisputable fact in public finance and public administration that each and everyindisputable fact in public finance and public administration that each and everyindisputable fact in public finance and public administration that each and everyindisputable fact in public finance and public administration that each and every

decision contained in the Budget must have a mixed impact on the public, with bothdecision contained in the Budget must have a mixed impact on the public, with bothdecision contained in the Budget must have a mixed impact on the public, with bothdecision contained in the Budget must have a mixed impact on the public, with both

favourable and adverse effects on individual sectors. A Budget that pleasesfavourable and adverse effects on individual sectors. A Budget that pleasesfavourable and adverse effects on individual sectors. A Budget that pleasesfavourable and adverse effects on individual sectors. A Budget that pleases

everybody can only be found in paradise. Of course, if some irresponsible personseverybody can only be found in paradise. Of course, if some irresponsible personseverybody can only be found in paradise. Of course, if some irresponsible personseverybody can only be found in paradise. Of course, if some irresponsible persons

come into power, they may, for the sake of currying favour with the public, presentcome into power, they may, for the sake of currying favour with the public, presentcome into power, they may, for the sake of currying favour with the public, presentcome into power, they may, for the sake of currying favour with the public, present

a Budget that tends to please everyone. But this will surely make a complete shamblesa Budget that tends to please everyone. But this will surely make a complete shamblesa Budget that tends to please everyone. But this will surely make a complete shamblesa Budget that tends to please everyone. But this will surely make a complete shambles

of our economy and, as a result, lead to greater financial constraint in this territory.of our economy and, as a result, lead to greater financial constraint in this territory.of our economy and, as a result, lead to greater financial constraint in this territory.of our economy and, as a result, lead to greater financial constraint in this territory.

Is it not a destructive approach which will promise to turn Hong Kong into a hellIs it not a destructive approach which will promise to turn Hong Kong into a hellIs it not a destructive approach which will promise to turn Hong Kong into a hellIs it not a destructive approach which will promise to turn Hong Kong into a hell

on earth?on earth?on earth?on earth?

Mr Deputy President, the maintenance of massive reserve and surplus is a practiceMr Deputy President, the maintenance of massive reserve and surplus is a practiceMr Deputy President, the maintenance of massive reserve and surplus is a practiceMr Deputy President, the maintenance of massive reserve and surplus is a practice

which has come under the severest criticism by many Honourable Members. It has beenwhich has come under the severest criticism by many Honourable Members. It has beenwhich has come under the severest criticism by many Honourable Members. It has beenwhich has come under the severest criticism by many Honourable Members. It has been

Hong Kong's strategy in managing public finance to transfer all surpluses to theHong Kong's strategy in managing public finance to transfer all surpluses to theHong Kong's strategy in managing public finance to transfer all surpluses to theHong Kong's strategy in managing public finance to transfer all surpluses to the

account of reserve which is kept as far as possible at a certain percentage of theaccount of reserve which is kept as far as possible at a certain percentage of theaccount of reserve which is kept as far as possible at a certain percentage of theaccount of reserve which is kept as far as possible at a certain percentage of the

estimated expenditure of the current year. As concerns the figures and rationaleestimated expenditure of the current year. As concerns the figures and rationaleestimated expenditure of the current year. As concerns the figures and rationaleestimated expenditure of the current year. As concerns the figures and rationale

in this respect, they were made fairly clear by the Honourable Vincent CHENG yesterday.in this respect, they were made fairly clear by the Honourable Vincent CHENG yesterday.in this respect, they were made fairly clear by the Honourable Vincent CHENG yesterday.in this respect, they were made fairly clear by the Honourable Vincent CHENG yesterday.

As the reasons for such an arrangement have also been explained by me in a TV commentaryAs the reasons for such an arrangement have also been explained by me in a TV commentaryAs the reasons for such an arrangement have also been explained by me in a TV commentaryAs the reasons for such an arrangement have also been explained by me in a TV commentary

programme of the 1970s called Viewpoints, I am not prepared to labour this point.programme of the 1970s called Viewpoints, I am not prepared to labour this point.programme of the 1970s called Viewpoints, I am not prepared to labour this point.programme of the 1970s called Viewpoints, I am not prepared to labour this point.

I only wish to point out that the forecast reserve of $71.6 billion in 1997 will beI only wish to point out that the forecast reserve of $71.6 billion in 1997 will beI only wish to point out that the forecast reserve of $71.6 billion in 1997 will beI only wish to point out that the forecast reserve of $71.6 billion in 1997 will be

equivalent to about 35% of the estimated expenditure of the year. Less the $25equivalent to about 35% of the estimated expenditure of the year. Less the $25equivalent to about 35% of the estimated expenditure of the year. Less the $25equivalent to about 35% of the estimated expenditure of the year. Less the $25

billion that is to be handed over to the Hong Kong Special Administrative Regionbillion that is to be handed over to the Hong Kong Special Administrative Regionbillion that is to be handed over to the Hong Kong Special Administrative Regionbillion that is to be handed over to the Hong Kong Special Administrative Region

Government, the remaining reserve of $46.6 billion will merely represent 23% of theGovernment, the remaining reserve of $46.6 billion will merely represent 23% of theGovernment, the remaining reserve of $46.6 billion will merely represent 23% of theGovernment, the remaining reserve of $46.6 billion will merely represent 23% of the

estimated expenditure of the year. Should this be considered on the high side orestimated expenditure of the year. Should this be considered on the high side orestimated expenditure of the year. Should this be considered on the high side orestimated expenditure of the year. Should this be considered on the high side or

the low side?the low side?the low side?the low side?

What conseqWhat conseqWhat conseqWhat consequences will it lead to if some Honourable Members who are not happyuences will it lead to if some Honourable Members who are not happyuences will it lead to if some Honourable Members who are not happyuences will it lead to if some Honourable Members who are not happy

with part of the Budget for one reason or another insist on voting against it orwith part of the Budget for one reason or another insist on voting against it orwith part of the Budget for one reason or another insist on voting against it orwith part of the Budget for one reason or another insist on voting against it or

amending it to their satisfaction without paying regards to the overall interest ofamending it to their satisfaction without paying regards to the overall interest ofamending it to their satisfaction without paying regards to the overall interest ofamending it to their satisfaction without paying regards to the overall interest of

the community? I do not think the final result will be welcome to any of us.the community? I do not think the final result will be welcome to any of us.the community? I do not think the final result will be welcome to any of us.the community? I do not think the final result will be welcome to any of us.

(1)(1)(1)(1) Should these Members succeed in reducing revenue from any one tax source, theShould these Members succeed in reducing revenue from any one tax source, theShould these Members succeed in reducing revenue from any one tax source, theShould these Members succeed in reducing revenue from any one tax source, the

Government will definitely need to offset its losses by slashing expenditure orGovernment will definitely need to offset its losses by slashing expenditure orGovernment will definitely need to offset its losses by slashing expenditure orGovernment will definitely need to offset its losses by slashing expenditure or

raising taxation in other areas. Do we really want to cause such drastic changesraising taxation in other areas. Do we really want to cause such drastic changesraising taxation in other areas. Do we really want to cause such drastic changesraising taxation in other areas. Do we really want to cause such drastic changes

for just a few minor amendments? The aftereffect may go as far as to result in afor just a few minor amendments? The aftereffect may go as far as to result in afor just a few minor amendments? The aftereffect may go as far as to result in afor just a few minor amendments? The aftereffect may go as far as to result in a

situation where the poor are robbed to benefit the rich. For example, an increasesituation where the poor are robbed to benefit the rich. For example, an increasesituation where the poor are robbed to benefit the rich. For example, an increasesituation where the poor are robbed to benefit the rich. For example, an increase

in personal tax allowance or a reduction in rates may make it necessary to introducein personal tax allowance or a reduction in rates may make it necessary to introducein personal tax allowance or a reduction in rates may make it necessary to introducein personal tax allowance or a reduction in rates may make it necessary to introduce

sales tax in economic downturn, a tax which is commonly known for its regressive effect,sales tax in economic downturn, a tax which is commonly known for its regressive effect,sales tax in economic downturn, a tax which is commonly known for its regressive effect,sales tax in economic downturn, a tax which is commonly known for its regressive effect,

and end up with exactly the kind of situation I am talking about. While I acceptand end up with exactly the kind of situation I am talking about. While I acceptand end up with exactly the kind of situation I am talking about. While I acceptand end up with exactly the kind of situation I am talking about. While I accept

that no Budget is perfect, it is my view that opportunity should be taken at thisthat no Budget is perfect, it is my view that opportunity should be taken at thisthat no Budget is perfect, it is my view that opportunity should be taken at thisthat no Budget is perfect, it is my view that opportunity should be taken at this

time of the year to put forth those tax-related proposals which we hope to followtime of the year to put forth those tax-related proposals which we hope to followtime of the year to put forth those tax-related proposals which we hope to followtime of the year to put forth those tax-related proposals which we hope to follow

up in the coming 12 months with a view to pressing for their adoption by the nextup in the coming 12 months with a view to pressing for their adoption by the nextup in the coming 12 months with a view to pressing for their adoption by the nextup in the coming 12 months with a view to pressing for their adoption by the next

year's Budget.year's Budget.year's Budget.year's Budget.

(2)(2)(2)(2) The preparation of the estimated expeThe preparation of the estimated expeThe preparation of the estimated expeThe preparation of the estimated expenditure is based on policies that havenditure is based on policies that havenditure is based on policies that havenditure is based on policies that have

already been formulated. The Appropriation Bill is passed to provide funds foralready been formulated. The Appropriation Bill is passed to provide funds foralready been formulated. The Appropriation Bill is passed to provide funds foralready been formulated. The Appropriation Bill is passed to provide funds for

implementing these agreed policies. If we propose to increase the allocation forimplementing these agreed policies. If we propose to increase the allocation forimplementing these agreed policies. If we propose to increase the allocation forimplementing these agreed policies. If we propose to increase the allocation for

any one of the existing programme areas or create new expenditure items in theany one of the existing programme areas or create new expenditure items in theany one of the existing programme areas or create new expenditure items in theany one of the existing programme areas or create new expenditure items in the

Appropriation Bill, it will virtually mean that the Legislative Council is, in theAppropriation Bill, it will virtually mean that the Legislative Council is, in theAppropriation Bill, it will virtually mean that the Legislative Council is, in theAppropriation Bill, it will virtually mean that the Legislative Council is, in the

process of considering the Appropriation Bill, introducing other new policies orprocess of considering the Appropriation Bill, introducing other new policies orprocess of considering the Appropriation Bill, introducing other new policies orprocess of considering the Appropriation Bill, introducing other new policies or

rearranging the order of priorities of the policies concerned. Do we really believerearranging the order of priorities of the policies concerned. Do we really believerearranging the order of priorities of the policies concerned. Do we really believerearranging the order of priorities of the policies concerned. Do we really believe

that we can manage to handle the annual job of formulating and monitoring a stringthat we can manage to handle the annual job of formulating and monitoring a stringthat we can manage to handle the annual job of formulating and monitoring a stringthat we can manage to handle the annual job of formulating and monitoring a string

of policies and finish it satisfactorily within a short span of one month's time inof policies and finish it satisfactorily within a short span of one month's time inof policies and finish it satisfactorily within a short span of one month's time inof policies and finish it satisfactorily within a short span of one month's time in

such a hasty manner?such a hasty manner?such a hasty manner?such a hasty manner?

(3)(3)(3)(3) I remember that last year a Member voted againI remember that last year a Member voted againI remember that last year a Member voted againI remember that last year a Member voted against the resolution on rates. Ifst the resolution on rates. Ifst the resolution on rates. Ifst the resolution on rates. If

that Member had at that time succeeded in obtaining enough support from other Membersthat Member had at that time succeeded in obtaining enough support from other Membersthat Member had at that time succeeded in obtaining enough support from other Membersthat Member had at that time succeeded in obtaining enough support from other Members

to vote down the resolution, the rates paid by the people would not have been reducedto vote down the resolution, the rates paid by the people would not have been reducedto vote down the resolution, the rates paid by the people would not have been reducedto vote down the resolution, the rates paid by the people would not have been reduced

from 7.5% to 5.5%. I believe that Councillor had no intention of causing thefrom 7.5% to 5.5%. I believe that Councillor had no intention of causing thefrom 7.5% to 5.5%. I believe that Councillor had no intention of causing thefrom 7.5% to 5.5%. I believe that Councillor had no intention of causing the

taxpayers to pay more tax and, of course, he might not even be aware of the consequencestaxpayers to pay more tax and, of course, he might not even be aware of the consequencestaxpayers to pay more tax and, of course, he might not even be aware of the consequencestaxpayers to pay more tax and, of course, he might not even be aware of the consequences

of his action. Even though I am not quite sure what his motive was, it is, however,of his action. Even though I am not quite sure what his motive was, it is, however,of his action. Even though I am not quite sure what his motive was, it is, however,of his action. Even though I am not quite sure what his motive was, it is, however,

logical to presume that he was just making a political gesture with a view to gaininglogical to presume that he was just making a political gesture with a view to gaininglogical to presume that he was just making a political gesture with a view to gaininglogical to presume that he was just making a political gesture with a view to gaining

a lot of political chips for nothing. No wonder he jumped on the bandwagon. Yet,a lot of political chips for nothing. No wonder he jumped on the bandwagon. Yet,a lot of political chips for nothing. No wonder he jumped on the bandwagon. Yet,a lot of political chips for nothing. No wonder he jumped on the bandwagon. Yet,

in so doing, was he reflecting public opinion or was he misleading the public?in so doing, was he reflecting public opinion or was he misleading the public?in so doing, was he reflecting public opinion or was he misleading the public?in so doing, was he reflecting public opinion or was he misleading the public?

Mr Deputy President, as regards salaries tax and corporate proMr Deputy President, as regards salaries tax and corporate proMr Deputy President, as regards salaries tax and corporate proMr Deputy President, as regards salaries tax and corporate profits tax, I wouldfits tax, I wouldfits tax, I wouldfits tax, I would

like to point out that the 12% increase in personal allowance is more than catchinglike to point out that the 12% increase in personal allowance is more than catchinglike to point out that the 12% increase in personal allowance is more than catchinglike to point out that the 12% increase in personal allowance is more than catching

up with the inflationary rate of last year. Some people hope that the time takenup with the inflationary rate of last year. Some people hope that the time takenup with the inflationary rate of last year. Some people hope that the time takenup with the inflationary rate of last year. Some people hope that the time taken

into calculation will be extended to cover a period of two or more years. I thinkinto calculation will be extended to cover a period of two or more years. I thinkinto calculation will be extended to cover a period of two or more years. I thinkinto calculation will be extended to cover a period of two or more years. I think

we should not just set our eyes on personal allowance alone, but should also lookwe should not just set our eyes on personal allowance alone, but should also lookwe should not just set our eyes on personal allowance alone, but should also lookwe should not just set our eyes on personal allowance alone, but should also look

at the tax band. In the past few years, improvements have already been made to theat the tax band. In the past few years, improvements have already been made to theat the tax band. In the past few years, improvements have already been made to theat the tax band. In the past few years, improvements have already been made to the

tax band and the marginal rate charged within each tax band. For instance, the taxtax band and the marginal rate charged within each tax band. For instance, the taxtax band and the marginal rate charged within each tax band. For instance, the taxtax band and the marginal rate charged within each tax band. For instance, the tax

band has been expanded from $10,000 to $20,000 and the marginal rate for the firstband has been expanded from $10,000 to $20,000 and the marginal rate for the firstband has been expanded from $10,000 to $20,000 and the marginal rate for the firstband has been expanded from $10,000 to $20,000 and the marginal rate for the first

tax band has been reduced initially from 5% to 3% and then to 2%. Upon calculation,tax band has been reduced initially from 5% to 3% and then to 2%. Upon calculation,tax band has been reduced initially from 5% to 3% and then to 2%. Upon calculation,tax band has been reduced initially from 5% to 3% and then to 2%. Upon calculation,

I find that for a single person earning $5,000 a month, the tax payable will be someI find that for a single person earning $5,000 a month, the tax payable will be someI find that for a single person earning $5,000 a month, the tax payable will be someI find that for a single person earning $5,000 a month, the tax payable will be some

$20 per month. As regards corporate profits tax, the one percentage point rise is$20 per month. As regards corporate profits tax, the one percentage point rise is$20 per month. As regards corporate profits tax, the one percentage point rise is$20 per month. As regards corporate profits tax, the one percentage point rise is

quite modest as it represents only an increase of 6.1%. I am amazed that it shouldquite modest as it represents only an increase of 6.1%. I am amazed that it shouldquite modest as it represents only an increase of 6.1%. I am amazed that it shouldquite modest as it represents only an increase of 6.1%. I am amazed that it should

have drawn so much criticism. I suggest that due consideration should be given tohave drawn so much criticism. I suggest that due consideration should be given tohave drawn so much criticism. I suggest that due consideration should be given tohave drawn so much criticism. I suggest that due consideration should be given to

the following:the following:the following:the following:

(1)(1)(1)(1) The Government should try to keep the charge rates of salaries tax and corporateThe Government should try to keep the charge rates of salaries tax and corporateThe Government should try to keep the charge rates of salaries tax and corporateThe Government should try to keep the charge rates of salaries tax and corporate

profits tax at the same level for a relatively long period. It will help to avoidprofits tax at the same level for a relatively long period. It will help to avoidprofits tax at the same level for a relatively long period. It will help to avoidprofits tax at the same level for a relatively long period. It will help to avoid

the confusion caused to the people each year by the adjustments made to these taxthe confusion caused to the people each year by the adjustments made to these taxthe confusion caused to the people each year by the adjustments made to these taxthe confusion caused to the people each year by the adjustments made to these tax

rates, and also to ensure stable tax revenue.rates, and also to ensure stable tax revenue.rates, and also to ensure stable tax revenue.rates, and also to ensure stable tax revenue.

(2)(2)(2)(2) The Government should consider reviewing the progressivity for personal taxationThe Government should consider reviewing the progressivity for personal taxationThe Government should consider reviewing the progressivity for personal taxationThe Government should consider reviewing the progressivity for personal taxation

and the size of the tax net within this year and examining the net effects which variousand the size of the tax net within this year and examining the net effects which variousand the size of the tax net within this year and examining the net effects which variousand the size of the tax net within this year and examining the net effects which various

changes in these two aspects may have on the middle income group.changes in these two aspects may have on the middle income group.changes in these two aspects may have on the middle income group.changes in these two aspects may have on the middle income group.

(3)(3)(3)(3) Given the fact that the minimum age requirement for dependent parent allowanceGiven the fact that the minimum age requirement for dependent parent allowanceGiven the fact that the minimum age requirement for dependent parent allowanceGiven the fact that the minimum age requirement for dependent parent allowance

is 60 while the normal retirement age is 55, the Government should consider loweringis 60 while the normal retirement age is 55, the Government should consider loweringis 60 while the normal retirement age is 55, the Government should consider loweringis 60 while the normal retirement age is 55, the Government should consider lowering

the age requirement for dependent parent allowance to the normal retirement age.the age requirement for dependent parent allowance to the normal retirement age.the age requirement for dependent parent allowance to the normal retirement age.the age requirement for dependent parent allowance to the normal retirement age.

Mr Deputy President, I am surprised that some Members have compared general ratesMr Deputy President, I am surprised that some Members have compared general ratesMr Deputy President, I am surprised that some Members have compared general ratesMr Deputy President, I am surprised that some Members have compared general rates

to "poll tax". "Poll tax" is a regressive tax which is levied at a flat rateto "poll tax". "Poll tax" is a regressive tax which is levied at a flat rateto "poll tax". "Poll tax" is a regressive tax which is levied at a flat rateto "poll tax". "Poll tax" is a regressive tax which is levied at a flat rate

regardless of how much one earns. However, rates is a very fair tax because its chargeregardless of how much one earns. However, rates is a very fair tax because its chargeregardless of how much one earns. However, rates is a very fair tax because its chargeregardless of how much one earns. However, rates is a very fair tax because its charge

is, to a certain extent, proportional to one's income. The increase in rates by halfis, to a certain extent, proportional to one's income. The increase in rates by halfis, to a certain extent, proportional to one's income. The increase in rates by halfis, to a certain extent, proportional to one's income. The increase in rates by half

a percentage point this year is more or less in line with inflation, and its maina percentage point this year is more or less in line with inflation, and its maina percentage point this year is more or less in line with inflation, and its maina percentage point this year is more or less in line with inflation, and its main

purpose is to allow room for any possible decrease in rates charges following thepurpose is to allow room for any possible decrease in rates charges following thepurpose is to allow room for any possible decrease in rates charges following thepurpose is to allow room for any possible decrease in rates charges following the

next revaluation exercise. It is not the practice of the Government to reassess thenext revaluation exercise. It is not the practice of the Government to reassess thenext revaluation exercise. It is not the practice of the Government to reassess thenext revaluation exercise. It is not the practice of the Government to reassess the

rateable values every year. Instead, revaluation of the rateable values is done oncerateable values every year. Instead, revaluation of the rateable values is done oncerateable values every year. Instead, revaluation of the rateable values is done oncerateable values every year. Instead, revaluation of the rateable values is done once

every two or three years. In order to avoid the possibility of a drastic increaseevery two or three years. In order to avoid the possibility of a drastic increaseevery two or three years. In order to avoid the possibility of a drastic increaseevery two or three years. In order to avoid the possibility of a drastic increase

in the rates payable by the people immediately after the revaluation exercise, thein the rates payable by the people immediately after the revaluation exercise, thein the rates payable by the people immediately after the revaluation exercise, thein the rates payable by the people immediately after the revaluation exercise, the

Government reduced the percentage of rates charges last year before increasing itGovernment reduced the percentage of rates charges last year before increasing itGovernment reduced the percentage of rates charges last year before increasing itGovernment reduced the percentage of rates charges last year before increasing it

again this year. It will probably be reduced next year after the completion of theagain this year. It will probably be reduced next year after the completion of theagain this year. It will probably be reduced next year after the completion of theagain this year. It will probably be reduced next year after the completion of the

new revaluation exercise on rateable values. As this arrangement is bound to confusenew revaluation exercise on rateable values. As this arrangement is bound to confusenew revaluation exercise on rateable values. As this arrangement is bound to confusenew revaluation exercise on rateable values. As this arrangement is bound to confuse

the public, I suggest that the Government should reassess the rateable values eachthe public, I suggest that the Government should reassess the rateable values eachthe public, I suggest that the Government should reassess the rateable values eachthe public, I suggest that the Government should reassess the rateable values each

year, and if not, should try to work out the projected rateable values every yearyear, and if not, should try to work out the projected rateable values every yearyear, and if not, should try to work out the projected rateable values every yearyear, and if not, should try to work out the projected rateable values every year

so that the percentage of rates charges can be maintained at a constant level.so that the percentage of rates charges can be maintained at a constant level.so that the percentage of rates charges can be maintained at a constant level.so that the percentage of rates charges can be maintained at a constant level.

Mr Deputy President, the Budget proposed by the Financial Secretary is worthyMr Deputy President, the Budget proposed by the Financial Secretary is worthyMr Deputy President, the Budget proposed by the Financial Secretary is worthyMr Deputy President, the Budget proposed by the Financial Secretary is worthy

of our support. Another more important point is that through this Budget theof our support. Another more important point is that through this Budget theof our support. Another more important point is that through this Budget theof our support. Another more important point is that through this Budget the

Financial Secretary has successfully put across the message of his insistence onFinancial Secretary has successfully put across the message of his insistence onFinancial Secretary has successfully put across the message of his insistence onFinancial Secretary has successfully put across the message of his insistence on

holding fast to the strategy that has all along been adopted in managing public financeholding fast to the strategy that has all along been adopted in managing public financeholding fast to the strategy that has all along been adopted in managing public financeholding fast to the strategy that has all along been adopted in managing public finance

in Hong Kong. It has not proposed any dramatic changes but rather it is thein Hong Kong. It has not proposed any dramatic changes but rather it is thein Hong Kong. It has not proposed any dramatic changes but rather it is thein Hong Kong. It has not proposed any dramatic changes but rather it is the

Councillors who have tried to dramatize it. When the debate on the taxation systemCouncillors who have tried to dramatize it. When the debate on the taxation systemCouncillors who have tried to dramatize it. When the debate on the taxation systemCouncillors who have tried to dramatize it. When the debate on the taxation system

in Hong Kong was held in this Council the other day, I just voted against the settingin Hong Kong was held in this Council the other day, I just voted against the settingin Hong Kong was held in this Council the other day, I just voted against the settingin Hong Kong was held in this Council the other day, I just voted against the setting

up of a tax review committee without making a speech on the subject. It was for theup of a tax review committee without making a speech on the subject. It was for theup of a tax review committee without making a speech on the subject. It was for theup of a tax review committee without making a speech on the subject. It was for the

same reason of not wanting to create the impression that major changes were aroundsame reason of not wanting to create the impression that major changes were aroundsame reason of not wanting to create the impression that major changes were aroundsame reason of not wanting to create the impression that major changes were around

the corner that I chose to take this approach. Is it true that new officials or newthe corner that I chose to take this approach. Is it true that new officials or newthe corner that I chose to take this approach. Is it true that new officials or newthe corner that I chose to take this approach. Is it true that new officials or new

Councillors can only win the hearts of the public by sweeping away existing practicesCouncillors can only win the hearts of the public by sweeping away existing practicesCouncillors can only win the hearts of the public by sweeping away existing practicesCouncillors can only win the hearts of the public by sweeping away existing practices

and launching major reforms?and launching major reforms?and launching major reforms?and launching major reforms?

Mr Deputy President, with these remarks and the courage of my conviction, IMr Deputy President, with these remarks and the courage of my conviction, IMr Deputy President, with these remarks and the courage of my conviction, IMr Deputy President, with these remarks and the courage of my conviction, I

support the motion.support the motion.support the motion.support the motion.

MR RONALD ARCULLI: Mr Deputy President, the maiden Budget presented by the FinancialMR RONALD ARCULLI: Mr Deputy President, the maiden Budget presented by the FinancialMR RONALD ARCULLI: Mr Deputy President, the maiden Budget presented by the FinancialMR RONALD ARCULLI: Mr Deputy President, the maiden Budget presented by the Financial

Secretary has been described differently. Mine goes something like this: If youSecretary has been described differently. Mine goes something like this: If youSecretary has been described differently. Mine goes something like this: If youSecretary has been described differently. Mine goes something like this: If you

live in a flat, have a business, have the odd flutter at the races or invest in coveredlive in a flat, have a business, have the odd flutter at the races or invest in coveredlive in a flat, have a business, have the odd flutter at the races or invest in coveredlive in a flat, have a business, have the odd flutter at the races or invest in covered

warrants you would then fall into the group that is hit from almost every angle unlesswarrants you would then fall into the group that is hit from almost every angle unlesswarrants you would then fall into the group that is hit from almost every angle unlesswarrants you would then fall into the group that is hit from almost every angle unless

you counter balance this by regularly taking a franchised bus to and from a cinemayou counter balance this by regularly taking a franchised bus to and from a cinemayou counter balance this by regularly taking a franchised bus to and from a cinemayou counter balance this by regularly taking a franchised bus to and from a cinema

where you consume huge quantities of soft drinks. If you did that you might givewhere you consume huge quantities of soft drinks. If you did that you might givewhere you consume huge quantities of soft drinks. If you did that you might givewhere you consume huge quantities of soft drinks. If you did that you might give

yourself some cushion. Talking about cushion brings me to the points that I wantyourself some cushion. Talking about cushion brings me to the points that I wantyourself some cushion. Talking about cushion brings me to the points that I wantyourself some cushion. Talking about cushion brings me to the points that I want

to offer my views on.to offer my views on.to offer my views on.to offer my views on.

The first, Mr Deputy President, is the budgetary The first, Mr Deputy President, is the budgetary The first, Mr Deputy President, is the budgetary The first, Mr Deputy President, is the budgetary strategy outlined by thestrategy outlined by thestrategy outlined by thestrategy outlined by the

Financial Secretary in paragraphs 35 to 43 of his speech. In paragraph 37 we areFinancial Secretary in paragraphs 35 to 43 of his speech. In paragraph 37 we areFinancial Secretary in paragraphs 35 to 43 of his speech. In paragraph 37 we areFinancial Secretary in paragraphs 35 to 43 of his speech. In paragraph 37 we are

told of the importance to ensure that public spending remains in line with economictold of the importance to ensure that public spending remains in line with economictold of the importance to ensure that public spending remains in line with economictold of the importance to ensure that public spending remains in line with economic

growth and in paragraph 40 the forecast trend rate of economic growth which isgrowth and in paragraph 40 the forecast trend rate of economic growth which isgrowth and in paragraph 40 the forecast trend rate of economic growth which isgrowth and in paragraph 40 the forecast trend rate of economic growth which is

supposedly to give the Administration the maximum safe ceiling for growth in publicsupposedly to give the Administration the maximum safe ceiling for growth in publicsupposedly to give the Administration the maximum safe ceiling for growth in publicsupposedly to give the Administration the maximum safe ceiling for growth in public

expenditure. Perhaps the Financial Secretary can tell us whether the Administrationexpenditure. Perhaps the Financial Secretary can tell us whether the Administrationexpenditure. Perhaps the Financial Secretary can tell us whether the Administrationexpenditure. Perhaps the Financial Secretary can tell us whether the Administration

has been able to do this over the past few years! In paragraph 37 we are told thathas been able to do this over the past few years! In paragraph 37 we are told thathas been able to do this over the past few years! In paragraph 37 we are told thathas been able to do this over the past few years! In paragraph 37 we are told that

the Financial Secretary has decided to maintain reserves at the level that he judgesthe Financial Secretary has decided to maintain reserves at the level that he judgesthe Financial Secretary has decided to maintain reserves at the level that he judgesthe Financial Secretary has decided to maintain reserves at the level that he judges

adequate both to meet known commitments and to provide a cushion against futureadequate both to meet known commitments and to provide a cushion against futureadequate both to meet known commitments and to provide a cushion against futureadequate both to meet known commitments and to provide a cushion against future

uncertainties. However, does this mean that Members of this Council can have no inputuncertainties. However, does this mean that Members of this Council can have no inputuncertainties. However, does this mean that Members of this Council can have no inputuncertainties. However, does this mean that Members of this Council can have no input

at all? Can we, for instance, ask him whether when he talks about a cushion he takesat all? Can we, for instance, ask him whether when he talks about a cushion he takesat all? Can we, for instance, ask him whether when he talks about a cushion he takesat all? Can we, for instance, ask him whether when he talks about a cushion he takes

the following into account:the following into account:the following into account:the following into account:

(1)(1)(1)(1) fiscal reserves;fiscal reserves;fiscal reserves;fiscal reserves;

(2)(2)(2)(2) government investments in the MTRC, KCRC, Housing Authority and the like;government investments in the MTRC, KCRC, Housing Authority and the like;government investments in the MTRC, KCRC, Housing Authority and the like;government investments in the MTRC, KCRC, Housing Authority and the like;

(3)(3)(3)(3) the Land Fund; andthe Land Fund; andthe Land Fund; andthe Land Fund; and

(4)(4)(4)(4) last but not the least, the Exchange Fund.last but not the least, the Exchange Fund.last but not the least, the Exchange Fund.last but not the least, the Exchange Fund.

The investments in the MTRC and the Housing Authority comes to a staggering $33The investments in the MTRC and the Housing Authority comes to a staggering $33The investments in the MTRC and the Housing Authority comes to a staggering $33The investments in the MTRC and the Housing Authority comes to a staggering $33

billion. Excluding interest earned and gained on investments the Land Fund isbillion. Excluding interest earned and gained on investments the Land Fund isbillion. Excluding interest earned and gained on investments the Land Fund isbillion. Excluding interest earned and gained on investments the Land Fund is

forecast to stand at $35.7 billion in March 1993. I cannot quote any figures forforecast to stand at $35.7 billion in March 1993. I cannot quote any figures forforecast to stand at $35.7 billion in March 1993. I cannot quote any figures forforecast to stand at $35.7 billion in March 1993. I cannot quote any figures for

the Exchange Fund because I do not know what it is. Assuming these two figures standthe Exchange Fund because I do not know what it is. Assuming these two figures standthe Exchange Fund because I do not know what it is. Assuming these two figures standthe Exchange Fund because I do not know what it is. Assuming these two figures stand

still but adding them to the surplus of $71.6 billion on 31 March 1997 we will havestill but adding them to the surplus of $71.6 billion on 31 March 1997 we will havestill but adding them to the surplus of $71.6 billion on 31 March 1997 we will havestill but adding them to the surplus of $71.6 billion on 31 March 1997 we will have

a staggering $140.3 billion excluding the Exchange Fund. Some cushion would you nota staggering $140.3 billion excluding the Exchange Fund. Some cushion would you nota staggering $140.3 billion excluding the Exchange Fund. Some cushion would you nota staggering $140.3 billion excluding the Exchange Fund. Some cushion would you not

say and is it therefore surprising that dissatisfaction has been voiced? If that wassay and is it therefore surprising that dissatisfaction has been voiced? If that wassay and is it therefore surprising that dissatisfaction has been voiced? If that wassay and is it therefore surprising that dissatisfaction has been voiced? If that was

not enough the surplus of $5.1 billion for 1992-93 does not include whatever revenuenot enough the surplus of $5.1 billion for 1992-93 does not include whatever revenuenot enough the surplus of $5.1 billion for 1992-93 does not include whatever revenuenot enough the surplus of $5.1 billion for 1992-93 does not include whatever revenue

might be recovered on plugging tax loopholes plus the several hundred million dollarsmight be recovered on plugging tax loopholes plus the several hundred million dollarsmight be recovered on plugging tax loopholes plus the several hundred million dollarsmight be recovered on plugging tax loopholes plus the several hundred million dollars

that we can collect when a new law is made to catch artificial depressing of importthat we can collect when a new law is made to catch artificial depressing of importthat we can collect when a new law is made to catch artificial depressing of importthat we can collect when a new law is made to catch artificial depressing of import

prices for vehicles. The Financial Secretary has also warned us that postal and waterprices for vehicles. The Financial Secretary has also warned us that postal and waterprices for vehicles. The Financial Secretary has also warned us that postal and waterprices for vehicles. The Financial Secretary has also warned us that postal and water

charges, tunnel tolls, airport and ferry fees, and other tax loaded fees such ascharges, tunnel tolls, airport and ferry fees, and other tax loaded fees such ascharges, tunnel tolls, airport and ferry fees, and other tax loaded fees such ascharges, tunnel tolls, airport and ferry fees, and other tax loaded fees such as

vehicle licences and company registration fees will most likely be increased. Butvehicle licences and company registration fees will most likely be increased. Butvehicle licences and company registration fees will most likely be increased. Butvehicle licences and company registration fees will most likely be increased. But

that is not all; he has also reminded us that the moratorium on government departmentthat is not all; he has also reminded us that the moratorium on government departmentthat is not all; he has also reminded us that the moratorium on government departmentthat is not all; he has also reminded us that the moratorium on government department

fees expired on 29 February this year and increases will be brought in! However,fees expired on 29 February this year and increases will be brought in! However,fees expired on 29 February this year and increases will be brought in! However,fees expired on 29 February this year and increases will be brought in! However,

the Financial Secretary was good enough to assure us that all these will be timedthe Financial Secretary was good enough to assure us that all these will be timedthe Financial Secretary was good enough to assure us that all these will be timedthe Financial Secretary was good enough to assure us that all these will be timed

carefully so that the impact can be minimized! Mr Deputy President, I believe thatcarefully so that the impact can be minimized! Mr Deputy President, I believe thatcarefully so that the impact can be minimized! Mr Deputy President, I believe thatcarefully so that the impact can be minimized! Mr Deputy President, I believe that

the Financial Secretary was being unduly modest when he said he wanted to providethe Financial Secretary was being unduly modest when he said he wanted to providethe Financial Secretary was being unduly modest when he said he wanted to providethe Financial Secretary was being unduly modest when he said he wanted to provide

a cushion against future uncertainties. The Financial Secretary has also implieda cushion against future uncertainties. The Financial Secretary has also implieda cushion against future uncertainties. The Financial Secretary has also implieda cushion against future uncertainties. The Financial Secretary has also implied

in paragraph 42 that the Government's share of the costs of capital works for thein paragraph 42 that the Government's share of the costs of capital works for thein paragraph 42 that the Government's share of the costs of capital works for thein paragraph 42 that the Government's share of the costs of capital works for the

airport core projects will be 25% of the total government capital expenditure duringairport core projects will be 25% of the total government capital expenditure duringairport core projects will be 25% of the total government capital expenditure duringairport core projects will be 25% of the total government capital expenditure during

the next six years. According to Table 2 on page 7 of Appendix A the total expenditurethe next six years. According to Table 2 on page 7 of Appendix A the total expenditurethe next six years. According to Table 2 on page 7 of Appendix A the total expenditurethe next six years. According to Table 2 on page 7 of Appendix A the total expenditure

for the period 1991-92 to 1996-97 is some $263 billion and 25% is $65.76 billion.for the period 1991-92 to 1996-97 is some $263 billion and 25% is $65.76 billion.for the period 1991-92 to 1996-97 is some $263 billion and 25% is $65.76 billion.for the period 1991-92 to 1996-97 is some $263 billion and 25% is $65.76 billion.

Could he tell us how this fits into the estimated fiscal reserves of some $71.6 billionCould he tell us how this fits into the estimated fiscal reserves of some $71.6 billionCould he tell us how this fits into the estimated fiscal reserves of some $71.6 billionCould he tell us how this fits into the estimated fiscal reserves of some $71.6 billion

in March 1997? As an aside might I lodge a note of protest on behalf of thein March 1997? As an aside might I lodge a note of protest on behalf of thein March 1997? As an aside might I lodge a note of protest on behalf of thein March 1997? As an aside might I lodge a note of protest on behalf of the

construction industry. Serious cutbacks of public works projects have made lifeconstruction industry. Serious cutbacks of public works projects have made lifeconstruction industry. Serious cutbacks of public works projects have made lifeconstruction industry. Serious cutbacks of public works projects have made life

rather tough for the industry. On top of this their margins are being squeezed quiterather tough for the industry. On top of this their margins are being squeezed quiterather tough for the industry. On top of this their margins are being squeezed quiterather tough for the industry. On top of this their margins are being squeezed quite

severely.severely.severely.severely.

The second point, Mr Deputy President, that I would like to deal with concernsThe second point, Mr Deputy President, that I would like to deal with concernsThe second point, Mr Deputy President, that I would like to deal with concernsThe second point, Mr Deputy President, that I would like to deal with concerns

revenue proposals. Against the background that I have outlined it is difficult, ifrevenue proposals. Against the background that I have outlined it is difficult, ifrevenue proposals. Against the background that I have outlined it is difficult, ifrevenue proposals. Against the background that I have outlined it is difficult, if

not impossible, to justify the increase of 1% in profits tax. The Financial Secretarynot impossible, to justify the increase of 1% in profits tax. The Financial Secretarynot impossible, to justify the increase of 1% in profits tax. The Financial Secretarynot impossible, to justify the increase of 1% in profits tax. The Financial Secretary

justifies this increase by relying on a historical high of 18.5% in 1984-85. Thejustifies this increase by relying on a historical high of 18.5% in 1984-85. Thejustifies this increase by relying on a historical high of 18.5% in 1984-85. Thejustifies this increase by relying on a historical high of 18.5% in 1984-85. The

business community might grudgingly accept this increase but to say that it is a modestbusiness community might grudgingly accept this increase but to say that it is a modestbusiness community might grudgingly accept this increase but to say that it is a modestbusiness community might grudgingly accept this increase but to say that it is a modest

increase and will have no appreciable effect on investor enthusiasm is highlyincrease and will have no appreciable effect on investor enthusiasm is highlyincrease and will have no appreciable effect on investor enthusiasm is highlyincrease and will have no appreciable effect on investor enthusiasm is highly

insensitive and wholly unnecessary. Some of my colleagues have already emphasizedinsensitive and wholly unnecessary. Some of my colleagues have already emphasizedinsensitive and wholly unnecessary. Some of my colleagues have already emphasizedinsensitive and wholly unnecessary. Some of my colleagues have already emphasized

that in the absence of good cause for such an untimely increase the business communitythat in the absence of good cause for such an untimely increase the business communitythat in the absence of good cause for such an untimely increase the business communitythat in the absence of good cause for such an untimely increase the business community

is entitled to express their concern and question whether this is the beginning ofis entitled to express their concern and question whether this is the beginning ofis entitled to express their concern and question whether this is the beginning ofis entitled to express their concern and question whether this is the beginning of

a trend. I urge the Financial Secretary to reiterate whenever he can that it is nota trend. I urge the Financial Secretary to reiterate whenever he can that it is nota trend. I urge the Financial Secretary to reiterate whenever he can that it is nota trend. I urge the Financial Secretary to reiterate whenever he can that it is not

a trend. The proposal for stamp duty on covered warrants is against the Financiala trend. The proposal for stamp duty on covered warrants is against the Financiala trend. The proposal for stamp duty on covered warrants is against the Financiala trend. The proposal for stamp duty on covered warrants is against the Financial

Secretary's remarks that recognition is to be given to a worldwide trend towardsSecretary's remarks that recognition is to be given to a worldwide trend towardsSecretary's remarks that recognition is to be given to a worldwide trend towardsSecretary's remarks that recognition is to be given to a worldwide trend towards

eliminating duty on stock transfers. Is he saying that before we eliminate such dutyeliminating duty on stock transfers. Is he saying that before we eliminate such dutyeliminating duty on stock transfers. Is he saying that before we eliminate such dutyeliminating duty on stock transfers. Is he saying that before we eliminate such duty

let us collect another billion or so? Or is this a curious example of a level playinglet us collect another billion or so? Or is this a curious example of a level playinglet us collect another billion or so? Or is this a curious example of a level playinglet us collect another billion or so? Or is this a curious example of a level playing

field? Mr Deputy President, I have no wish to disappoint either the Financialfield? Mr Deputy President, I have no wish to disappoint either the Financialfield? Mr Deputy President, I have no wish to disappoint either the Financialfield? Mr Deputy President, I have no wish to disappoint either the Financial

Secretary or my colleagues and must say a few words on the payment of stamp duty onSecretary or my colleagues and must say a few words on the payment of stamp duty onSecretary or my colleagues and must say a few words on the payment of stamp duty onSecretary or my colleagues and must say a few words on the payment of stamp duty on

sale and purchase agreements for residential properties. This, of course, is not onesale and purchase agreements for residential properties. This, of course, is not onesale and purchase agreements for residential properties. This, of course, is not onesale and purchase agreements for residential properties. This, of course, is not one

of the revenue measures proposed in the Budget but is it not wonderful that a measureof the revenue measures proposed in the Budget but is it not wonderful that a measureof the revenue measures proposed in the Budget but is it not wonderful that a measureof the revenue measures proposed in the Budget but is it not wonderful that a measure

designed to curb speculation has brought a windfall of some $500 million thusdesigned to curb speculation has brought a windfall of some $500 million thusdesigned to curb speculation has brought a windfall of some $500 million thusdesigned to curb speculation has brought a windfall of some $500 million thus

increasing the cost of residential property in the hands of the end consumer. Ifincreasing the cost of residential property in the hands of the end consumer. Ifincreasing the cost of residential property in the hands of the end consumer. Ifincreasing the cost of residential property in the hands of the end consumer. If

the additional supply of land for homes has little effect on prices, which is whatthe additional supply of land for homes has little effect on prices, which is whatthe additional supply of land for homes has little effect on prices, which is whatthe additional supply of land for homes has little effect on prices, which is what

the Secretary for Planning, Environment and Lands virtually said, what then is thethe Secretary for Planning, Environment and Lands virtually said, what then is thethe Secretary for Planning, Environment and Lands virtually said, what then is thethe Secretary for Planning, Environment and Lands virtually said, what then is the

answer? Incidentally, it is a view that I do not agree with for if the supply ofanswer? Incidentally, it is a view that I do not agree with for if the supply ofanswer? Incidentally, it is a view that I do not agree with for if the supply ofanswer? Incidentally, it is a view that I do not agree with for if the supply of

such land did not increase there would be upward pressure on prices. Mr Deputysuch land did not increase there would be upward pressure on prices. Mr Deputysuch land did not increase there would be upward pressure on prices. Mr Deputysuch land did not increase there would be upward pressure on prices. Mr Deputy

President, I would like to repeat several suggestions that I have made previouslyPresident, I would like to repeat several suggestions that I have made previouslyPresident, I would like to repeat several suggestions that I have made previouslyPresident, I would like to repeat several suggestions that I have made previously

as regards revenue measures. Although introducing duty on diesel fuel used by pleasureas regards revenue measures. Although introducing duty on diesel fuel used by pleasureas regards revenue measures. Although introducing duty on diesel fuel used by pleasureas regards revenue measures. Although introducing duty on diesel fuel used by pleasure

boats does get rid of an anomaly the Administration should consider introducing aboats does get rid of an anomaly the Administration should consider introducing aboats does get rid of an anomaly the Administration should consider introducing aboats does get rid of an anomaly the Administration should consider introducing a

first registration tax for these boats. Another suggestion is that instead offirst registration tax for these boats. Another suggestion is that instead offirst registration tax for these boats. Another suggestion is that instead offirst registration tax for these boats. Another suggestion is that instead of

increasing departure taxes on airport and ferries which must affect our tourismincreasing departure taxes on airport and ferries which must affect our tourismincreasing departure taxes on airport and ferries which must affect our tourismincreasing departure taxes on airport and ferries which must affect our tourism

industry should we not introduce a departure tax at our land crossing? I believeindustry should we not introduce a departure tax at our land crossing? I believeindustry should we not introduce a departure tax at our land crossing? I believeindustry should we not introduce a departure tax at our land crossing? I believe

that we have over 30 million crossings a year and even if they were charged a nominalthat we have over 30 million crossings a year and even if they were charged a nominalthat we have over 30 million crossings a year and even if they were charged a nominalthat we have over 30 million crossings a year and even if they were charged a nominal

of $10 it will raise a tidy sum. Not unlike other affluent communities theof $10 it will raise a tidy sum. Not unlike other affluent communities theof $10 it will raise a tidy sum. Not unlike other affluent communities theof $10 it will raise a tidy sum. Not unlike other affluent communities the

registration plate on a car is considered to a "collectable". Should the Governmentregistration plate on a car is considered to a "collectable". Should the Governmentregistration plate on a car is considered to a "collectable". Should the Governmentregistration plate on a car is considered to a "collectable". Should the Government

ask the Commissioner of Police and the Financial Secretary to give up their No. 1ask the Commissioner of Police and the Financial Secretary to give up their No. 1ask the Commissioner of Police and the Financial Secretary to give up their No. 1ask the Commissioner of Police and the Financial Secretary to give up their No. 1

and No. 2 car registration numbers so that they can be auctioned off? Taking thisand No. 2 car registration numbers so that they can be auctioned off? Taking thisand No. 2 car registration numbers so that they can be auctioned off? Taking thisand No. 2 car registration numbers so that they can be auctioned off? Taking this

one step further should we introduce, for instance, personalized car numbers? Shouldone step further should we introduce, for instance, personalized car numbers? Shouldone step further should we introduce, for instance, personalized car numbers? Shouldone step further should we introduce, for instance, personalized car numbers? Should

we for instance not again allow numbers to be transferred taking a reasonable transferwe for instance not again allow numbers to be transferred taking a reasonable transferwe for instance not again allow numbers to be transferred taking a reasonable transferwe for instance not again allow numbers to be transferred taking a reasonable transfer

fee rather than prohibiting the transfer of such number? Mr Deputy President, I couldfee rather than prohibiting the transfer of such number? Mr Deputy President, I couldfee rather than prohibiting the transfer of such number? Mr Deputy President, I couldfee rather than prohibiting the transfer of such number? Mr Deputy President, I could

go on but I shall not because I suspect I am running a serious risk of putting morego on but I shall not because I suspect I am running a serious risk of putting morego on but I shall not because I suspect I am running a serious risk of putting morego on but I shall not because I suspect I am running a serious risk of putting more

money into the public coffers without having the satisfaction or the ability ofmoney into the public coffers without having the satisfaction or the ability ofmoney into the public coffers without having the satisfaction or the ability ofmoney into the public coffers without having the satisfaction or the ability of

channelling some of that money into the sandwich class. My comment on tax concessionschannelling some of that money into the sandwich class. My comment on tax concessionschannelling some of that money into the sandwich class. My comment on tax concessionschannelling some of that money into the sandwich class. My comment on tax concessions

concerns salaries tax. I will not repeat what has been said about personal allowancesconcerns salaries tax. I will not repeat what has been said about personal allowancesconcerns salaries tax. I will not repeat what has been said about personal allowancesconcerns salaries tax. I will not repeat what has been said about personal allowances

and tax bands. I agree with most, if not all, of such comments but I do want to sayand tax bands. I agree with most, if not all, of such comments but I do want to sayand tax bands. I agree with most, if not all, of such comments but I do want to sayand tax bands. I agree with most, if not all, of such comments but I do want to say

that I do not understand why the gap between profits tax and salaries tax has beenthat I do not understand why the gap between profits tax and salaries tax has beenthat I do not understand why the gap between profits tax and salaries tax has beenthat I do not understand why the gap between profits tax and salaries tax has been

widened by some 66%, that is from 1.5% to 2.5%. Is this the Financial Secretary'swidened by some 66%, that is from 1.5% to 2.5%. Is this the Financial Secretary'swidened by some 66%, that is from 1.5% to 2.5%. Is this the Financial Secretary'swidened by some 66%, that is from 1.5% to 2.5%. Is this the Financial Secretary's

way of helping the sandwich class? Perhaps he might note that the assessable incomeway of helping the sandwich class? Perhaps he might note that the assessable incomeway of helping the sandwich class? Perhaps he might note that the assessable incomeway of helping the sandwich class? Perhaps he might note that the assessable income

group earning $240,000 to $600,000 per annum now pays 35.8% of the total yield whichgroup earning $240,000 to $600,000 per annum now pays 35.8% of the total yield whichgroup earning $240,000 to $600,000 per annum now pays 35.8% of the total yield whichgroup earning $240,000 to $600,000 per annum now pays 35.8% of the total yield which

is up from 33.8% last year. I believe that the great majority of our sandwich classis up from 33.8% last year. I believe that the great majority of our sandwich classis up from 33.8% last year. I believe that the great majority of our sandwich classis up from 33.8% last year. I believe that the great majority of our sandwich class

falls into this grouping.falls into this grouping.falls into this grouping.falls into this grouping.

Mr Deputy President, I would like to take advantage of today'Mr Deputy President, I would like to take advantage of today'Mr Deputy President, I would like to take advantage of today'Mr Deputy President, I would like to take advantage of today's proceedings tos proceedings tos proceedings tos proceedings to

reiterate the Co-operative Resources Centre's view on this Budget. In view of thereiterate the Co-operative Resources Centre's view on this Budget. In view of thereiterate the Co-operative Resources Centre's view on this Budget. In view of thereiterate the Co-operative Resources Centre's view on this Budget. In view of the

huge surpluses for 1991-92 and 1992-93 of some $14 billion and $5.1 billionhuge surpluses for 1991-92 and 1992-93 of some $14 billion and $5.1 billionhuge surpluses for 1991-92 and 1992-93 of some $14 billion and $5.1 billionhuge surpluses for 1991-92 and 1992-93 of some $14 billion and $5.1 billion

respectively, members of CRC felt that it was appropriate to put forward the caserespectively, members of CRC felt that it was appropriate to put forward the caserespectively, members of CRC felt that it was appropriate to put forward the caserespectively, members of CRC felt that it was appropriate to put forward the case

for a measure of relief for the sandwich class. We felt that the most direct wayfor a measure of relief for the sandwich class. We felt that the most direct wayfor a measure of relief for the sandwich class. We felt that the most direct wayfor a measure of relief for the sandwich class. We felt that the most direct way

of doing so was to seek the Governor's permission or recommendation, which was doneof doing so was to seek the Governor's permission or recommendation, which was doneof doing so was to seek the Governor's permission or recommendation, which was doneof doing so was to seek the Governor's permission or recommendation, which was done

in writing early Tuesday afternoon, to move two amendments: one to increase thein writing early Tuesday afternoon, to move two amendments: one to increase thein writing early Tuesday afternoon, to move two amendments: one to increase thein writing early Tuesday afternoon, to move two amendments: one to increase the

personal allowances to $50,000 from the proposed $46,000 with corresponding increasespersonal allowances to $50,000 from the proposed $46,000 with corresponding increasespersonal allowances to $50,000 from the proposed $46,000 with corresponding increasespersonal allowances to $50,000 from the proposed $46,000 with corresponding increases

for children and dependent parents and the other to widen the tax band from $20,000for children and dependent parents and the other to widen the tax band from $20,000for children and dependent parents and the other to widen the tax band from $20,000for children and dependent parents and the other to widen the tax band from $20,000

to $30,000. However, in a written reply which I received yesterday morning theto $30,000. However, in a written reply which I received yesterday morning theto $30,000. However, in a written reply which I received yesterday morning theto $30,000. However, in a written reply which I received yesterday morning the

Governor declined to give his recommendation. There was obviously disappointment onGovernor declined to give his recommendation. There was obviously disappointment onGovernor declined to give his recommendation. There was obviously disappointment onGovernor declined to give his recommendation. There was obviously disappointment on

the part of CRC because it felt that should the Government be unable to make somethe part of CRC because it felt that should the Government be unable to make somethe part of CRC because it felt that should the Government be unable to make somethe part of CRC because it felt that should the Government be unable to make some

adjustments this year or to give a clear commitment which was acceptable then CRCadjustments this year or to give a clear commitment which was acceptable then CRCadjustments this year or to give a clear commitment which was acceptable then CRCadjustments this year or to give a clear commitment which was acceptable then CRC

felt that the best way to help the sandwich class was to vote "no" on the proposedfelt that the best way to help the sandwich class was to vote "no" on the proposedfelt that the best way to help the sandwich class was to vote "no" on the proposedfelt that the best way to help the sandwich class was to vote "no" on the proposed

increase in rates thus putting some money in their pockets. The CRC believes thatincrease in rates thus putting some money in their pockets. The CRC believes thatincrease in rates thus putting some money in their pockets. The CRC believes thatincrease in rates thus putting some money in their pockets. The CRC believes that

voting "no" to the Appropriation Bill would not be the best way of achieving theirvoting "no" to the Appropriation Bill would not be the best way of achieving theirvoting "no" to the Appropriation Bill would not be the best way of achieving theirvoting "no" to the Appropriation Bill would not be the best way of achieving their

primary objective of trying to help or to get a measure of relief for the sandwichprimary objective of trying to help or to get a measure of relief for the sandwichprimary objective of trying to help or to get a measure of relief for the sandwichprimary objective of trying to help or to get a measure of relief for the sandwich

class. Apart from this voting down any Appropriation Bill is an extremely seriousclass. Apart from this voting down any Appropriation Bill is an extremely seriousclass. Apart from this voting down any Appropriation Bill is an extremely seriousclass. Apart from this voting down any Appropriation Bill is an extremely serious

matter as it will have grave implications not only because of the wider interestsmatter as it will have grave implications not only because of the wider interestsmatter as it will have grave implications not only because of the wider interestsmatter as it will have grave implications not only because of the wider interests

of the community as a whole but also the effect it will have on our trading partnersof the community as a whole but also the effect it will have on our trading partnersof the community as a whole but also the effect it will have on our trading partnersof the community as a whole but also the effect it will have on our trading partners

and international investors. There are obviously times when we stand up for whatand international investors. There are obviously times when we stand up for whatand international investors. There are obviously times when we stand up for whatand international investors. There are obviously times when we stand up for what

we value and believe in. The real question we must ask ourself is this: Is whatwe value and believe in. The real question we must ask ourself is this: Is whatwe value and believe in. The real question we must ask ourself is this: Is whatwe value and believe in. The real question we must ask ourself is this: Is what

we are seeking so vital and compelling that it would be right to vote "no" to thewe are seeking so vital and compelling that it would be right to vote "no" to thewe are seeking so vital and compelling that it would be right to vote "no" to thewe are seeking so vital and compelling that it would be right to vote "no" to the

Appropriation Bill? Of course, if one takes the view that voting down anAppropriation Bill? Of course, if one takes the view that voting down anAppropriation Bill? Of course, if one takes the view that voting down anAppropriation Bill? Of course, if one takes the view that voting down an

Appropriation Bill is no big deal then I have obviously phrased the questionAppropriation Bill is no big deal then I have obviously phrased the questionAppropriation Bill is no big deal then I have obviously phrased the questionAppropriation Bill is no big deal then I have obviously phrased the question

incorrectly. But Mr Deputy President, I believe I have got the question just aboutincorrectly. But Mr Deputy President, I believe I have got the question just aboutincorrectly. But Mr Deputy President, I believe I have got the question just aboutincorrectly. But Mr Deputy President, I believe I have got the question just about

right!right!right!right!

Mr Deputy President, much has been said about the partnership between theMr Deputy President, much has been said about the partnership between theMr Deputy President, much has been said about the partnership between theMr Deputy President, much has been said about the partnership between the

Administration and this Council. For myself the partnership does not end there. ItAdministration and this Council. For myself the partnership does not end there. ItAdministration and this Council. For myself the partnership does not end there. ItAdministration and this Council. For myself the partnership does not end there. It

is always useful to remind ourselves who are the real bosses: the people of Hong Kongis always useful to remind ourselves who are the real bosses: the people of Hong Kongis always useful to remind ourselves who are the real bosses: the people of Hong Kongis always useful to remind ourselves who are the real bosses: the people of Hong Kong

are the real bosses! Every year we go through the ritual of the present debate butare the real bosses! Every year we go through the ritual of the present debate butare the real bosses! Every year we go through the ritual of the present debate butare the real bosses! Every year we go through the ritual of the present debate but

sometimes we do not pay sufficient attention to the views of the public. In thissometimes we do not pay sufficient attention to the views of the public. In thissometimes we do not pay sufficient attention to the views of the public. In thissometimes we do not pay sufficient attention to the views of the public. In this

context I would venture to say that raising taxes and giving tax concessions is butcontext I would venture to say that raising taxes and giving tax concessions is butcontext I would venture to say that raising taxes and giving tax concessions is butcontext I would venture to say that raising taxes and giving tax concessions is but

a part of the whole exercise. The other part, as the Financial Secretary and hisa part of the whole exercise. The other part, as the Financial Secretary and hisa part of the whole exercise. The other part, as the Financial Secretary and hisa part of the whole exercise. The other part, as the Financial Secretary and his

colleagues know, is the concern over the size of the Civil Service and the expenditurecolleagues know, is the concern over the size of the Civil Service and the expenditurecolleagues know, is the concern over the size of the Civil Service and the expenditurecolleagues know, is the concern over the size of the Civil Service and the expenditure

that it consumes. Any Budget proposal would be far more creditable if thethat it consumes. Any Budget proposal would be far more creditable if thethat it consumes. Any Budget proposal would be far more creditable if thethat it consumes. Any Budget proposal would be far more creditable if the

Administration went to the public and could say without fear of contradiction thatAdministration went to the public and could say without fear of contradiction thatAdministration went to the public and could say without fear of contradiction thatAdministration went to the public and could say without fear of contradiction that

we the Administration are not asking the public to keep paying, we are also tighteningwe the Administration are not asking the public to keep paying, we are also tighteningwe the Administration are not asking the public to keep paying, we are also tighteningwe the Administration are not asking the public to keep paying, we are also tightening

our belts and trimming our expenses, we are also making sacrifices!our belts and trimming our expenses, we are also making sacrifices!our belts and trimming our expenses, we are also making sacrifices!our belts and trimming our expenses, we are also making sacrifices!

Mr Deputy President,Mr Deputy President,Mr Deputy President,Mr Deputy President, I should like to conclude by making another appeal to the I should like to conclude by making another appeal to the I should like to conclude by making another appeal to the I should like to conclude by making another appeal to the

Financial Secretary to consider giving a measure of relief to the sandwich class thisFinancial Secretary to consider giving a measure of relief to the sandwich class thisFinancial Secretary to consider giving a measure of relief to the sandwich class thisFinancial Secretary to consider giving a measure of relief to the sandwich class this

year. It is a reasonable request. It is in his power to give. I hope he does!year. It is a reasonable request. It is in his power to give. I hope he does!year. It is a reasonable request. It is in his power to give. I hope he does!year. It is a reasonable request. It is in his power to give. I hope he does!

MR PETER WONG: Mr Deputy President, the Financial Secretary's maiden Budget was ultraMR PETER WONG: Mr Deputy President, the Financial Secretary's maiden Budget was ultraMR PETER WONG: Mr Deputy President, the Financial Secretary's maiden Budget was ultraMR PETER WONG: Mr Deputy President, the Financial Secretary's maiden Budget was ultra

conservative. Like a new bride, he has been too keen to win the approbation of hisconservative. Like a new bride, he has been too keen to win the approbation of hisconservative. Like a new bride, he has been too keen to win the approbation of hisconservative. Like a new bride, he has been too keen to win the approbation of his

new family and ended up by not totally satisfying any single member.new family and ended up by not totally satisfying any single member.new family and ended up by not totally satisfying any single member.new family and ended up by not totally satisfying any single member.

On the Budget, I wish to make five points.On the Budget, I wish to make five points.On the Budget, I wish to make five points.On the Budget, I wish to make five points.

Firstly:Firstly:Firstly:Firstly:

Public expenditurePublic expenditurePublic expenditurePublic expenditure

One of the principles of financial management cited by the Financial SecretaryOne of the principles of financial management cited by the Financial SecretaryOne of the principles of financial management cited by the Financial SecretaryOne of the principles of financial management cited by the Financial Secretary

is "to ensure that public spending remains in line with economic growth". However,is "to ensure that public spending remains in line with economic growth". However,is "to ensure that public spending remains in line with economic growth". However,is "to ensure that public spending remains in line with economic growth". However,

statistics indicate that it is deviating from this principle. Public spending, atstatistics indicate that it is deviating from this principle. Public spending, atstatistics indicate that it is deviating from this principle. Public spending, atstatistics indicate that it is deviating from this principle. Public spending, at

18.8% of Gross Domestic Product, shows a 5.6% increase over the 1991-92 figure.18.8% of Gross Domestic Product, shows a 5.6% increase over the 1991-92 figure.18.8% of Gross Domestic Product, shows a 5.6% increase over the 1991-92 figure.18.8% of Gross Domestic Product, shows a 5.6% increase over the 1991-92 figure.

Despite the Government's austerity drive, public spending is steadily climbing. TheDespite the Government's austerity drive, public spending is steadily climbing. TheDespite the Government's austerity drive, public spending is steadily climbing. TheDespite the Government's austerity drive, public spending is steadily climbing. The

discrepancy between the growth rates in public expenditure and GDP should give causediscrepancy between the growth rates in public expenditure and GDP should give causediscrepancy between the growth rates in public expenditure and GDP should give causediscrepancy between the growth rates in public expenditure and GDP should give cause

for concern.for concern.for concern.for concern.

Secondly:Secondly:Secondly:Secondly:

The reservesThe reservesThe reservesThe reserves

After deducting all the PADS expenditure, the Financial Secretary now forecastsAfter deducting all the PADS expenditure, the Financial Secretary now forecastsAfter deducting all the PADS expenditure, the Financial Secretary now forecastsAfter deducting all the PADS expenditure, the Financial Secretary now forecasts

the revenue reserves to be $71.6 billion by 1996-97 which is way higher than the levelthe revenue reserves to be $71.6 billion by 1996-97 which is way higher than the levelthe revenue reserves to be $71.6 billion by 1996-97 which is way higher than the levelthe revenue reserves to be $71.6 billion by 1996-97 which is way higher than the level

presented to the Chinese during the airport negotiations. The Land Fund plus thepresented to the Chinese during the airport negotiations. The Land Fund plus thepresented to the Chinese during the airport negotiations. The Land Fund plus thepresented to the Chinese during the airport negotiations. The Land Fund plus the

inscrutable but certainly sizable Exchange Fund should give the SAR Government ainscrutable but certainly sizable Exchange Fund should give the SAR Government ainscrutable but certainly sizable Exchange Fund should give the SAR Government ainscrutable but certainly sizable Exchange Fund should give the SAR Government a

handsome dowry of probably $200 billion by 1997. This monumental amount of reserves,handsome dowry of probably $200 billion by 1997. This monumental amount of reserves,handsome dowry of probably $200 billion by 1997. This monumental amount of reserves,handsome dowry of probably $200 billion by 1997. This monumental amount of reserves,

according to the Financial Secretary, is set at "a level adequate both to meet knownaccording to the Financial Secretary, is set at "a level adequate both to meet knownaccording to the Financial Secretary, is set at "a level adequate both to meet knownaccording to the Financial Secretary, is set at "a level adequate both to meet known

commitments and to provide a cushion to help meet any unforeseen adverse developments".commitments and to provide a cushion to help meet any unforeseen adverse developments".commitments and to provide a cushion to help meet any unforeseen adverse developments".commitments and to provide a cushion to help meet any unforeseen adverse developments".

Apart from the civil service pensions, it is difficult to decipher future developmentsApart from the civil service pensions, it is difficult to decipher future developmentsApart from the civil service pensions, it is difficult to decipher future developmentsApart from the civil service pensions, it is difficult to decipher future developments

that would justify this amount of stuffing in the cushion.that would justify this amount of stuffing in the cushion.that would justify this amount of stuffing in the cushion.that would justify this amount of stuffing in the cushion.

The only rational explanation is that we are heading for a massive overrun inThe only rational explanation is that we are heading for a massive overrun inThe only rational explanation is that we are heading for a massive overrun inThe only rational explanation is that we are heading for a massive overrun in

the cost of PADS. When the Governor mentioned $127 billion for the whole of PADS,the cost of PADS. When the Governor mentioned $127 billion for the whole of PADS,the cost of PADS. When the Governor mentioned $127 billion for the whole of PADS,the cost of PADS. When the Governor mentioned $127 billion for the whole of PADS,

I ventured that in the money of the day, this would come to $300 billion. Is thisI ventured that in the money of the day, this would come to $300 billion. Is thisI ventured that in the money of the day, this would come to $300 billion. Is thisI ventured that in the money of the day, this would come to $300 billion. Is this

the hidden agenda?the hidden agenda?the hidden agenda?the hidden agenda?

We have seen clear evidence of economic revival in Hong Kong's markets in theWe have seen clear evidence of economic revival in Hong Kong's markets in theWe have seen clear evidence of economic revival in Hong Kong's markets in theWe have seen clear evidence of economic revival in Hong Kong's markets in the

Asian region and strong growth in China; total exports are expected to increase byAsian region and strong growth in China; total exports are expected to increase byAsian region and strong growth in China; total exports are expected to increase byAsian region and strong growth in China; total exports are expected to increase by

14% and re-exports by 20% this year; and inflation should gradually abate as14% and re-exports by 20% this year; and inflation should gradually abate as14% and re-exports by 20% this year; and inflation should gradually abate as14% and re-exports by 20% this year; and inflation should gradually abate as

structural transformation progresses. Under these vibrant economic conditions, anystructural transformation progresses. Under these vibrant economic conditions, anystructural transformation progresses. Under these vibrant economic conditions, anystructural transformation progresses. Under these vibrant economic conditions, any

attempt to boost the reserves must be looked upon with scepticism. Indeed, publicattempt to boost the reserves must be looked upon with scepticism. Indeed, publicattempt to boost the reserves must be looked upon with scepticism. Indeed, publicattempt to boost the reserves must be looked upon with scepticism. Indeed, public

accountability for the accumulating reserves is called for.accountability for the accumulating reserves is called for.accountability for the accumulating reserves is called for.accountability for the accumulating reserves is called for.

Thirdly:Thirdly:Thirdly:Thirdly:

Profits taxProfits taxProfits taxProfits tax

The continued growth in government expenditure in excess of stated financialThe continued growth in government expenditure in excess of stated financialThe continued growth in government expenditure in excess of stated financialThe continued growth in government expenditure in excess of stated financial

policy, coupled with continuing accumulation of reserves nearly three times the sumpolicy, coupled with continuing accumulation of reserves nearly three times the sumpolicy, coupled with continuing accumulation of reserves nearly three times the sumpolicy, coupled with continuing accumulation of reserves nearly three times the sum

promised to China, have made it difficult for the Government to maintain thepromised to China, have made it difficult for the Government to maintain thepromised to China, have made it difficult for the Government to maintain thepromised to China, have made it difficult for the Government to maintain the

credibility of its commitment to low taxation. The 1% profits tax increase, estimatedcredibility of its commitment to low taxation. The 1% profits tax increase, estimatedcredibility of its commitment to low taxation. The 1% profits tax increase, estimatedcredibility of its commitment to low taxation. The 1% profits tax increase, estimated

to raise $1.6 billion, is a contradiction in terms of the 1991-92 and 1992-93to raise $1.6 billion, is a contradiction in terms of the 1991-92 and 1992-93to raise $1.6 billion, is a contradiction in terms of the 1991-92 and 1992-93to raise $1.6 billion, is a contradiction in terms of the 1991-92 and 1992-93

surpluses, and runs counter to the stated Budget objective of raising revenue to coversurpluses, and runs counter to the stated Budget objective of raising revenue to coversurpluses, and runs counter to the stated Budget objective of raising revenue to coversurpluses, and runs counter to the stated Budget objective of raising revenue to cover

recurrent expenditure. From the viewpoint of sound financial management, the hugerecurrent expenditure. From the viewpoint of sound financial management, the hugerecurrent expenditure. From the viewpoint of sound financial management, the hugerecurrent expenditure. From the viewpoint of sound financial management, the huge

surplus of $14.1 billion threatens to put any tax increase proposal out of context.surplus of $14.1 billion threatens to put any tax increase proposal out of context.surplus of $14.1 billion threatens to put any tax increase proposal out of context.surplus of $14.1 billion threatens to put any tax increase proposal out of context.

From the point of view of the business sector, the profits tax increase sent out aFrom the point of view of the business sector, the profits tax increase sent out aFrom the point of view of the business sector, the profits tax increase sent out aFrom the point of view of the business sector, the profits tax increase sent out a

wrong signal indicating a growing trend to all investors, and the differential withwrong signal indicating a growing trend to all investors, and the differential withwrong signal indicating a growing trend to all investors, and the differential withwrong signal indicating a growing trend to all investors, and the differential with

salaries tax will surely provide incentive to tax minimization to achieve the lowersalaries tax will surely provide incentive to tax minimization to achieve the lowersalaries tax will surely provide incentive to tax minimization to achieve the lowersalaries tax will surely provide incentive to tax minimization to achieve the lower

rate. At a time when competitive taxation measures are adopted by our neighbouringrate. At a time when competitive taxation measures are adopted by our neighbouringrate. At a time when competitive taxation measures are adopted by our neighbouringrate. At a time when competitive taxation measures are adopted by our neighbouring

countries, any profits tax increase will only give negative indications to thecountries, any profits tax increase will only give negative indications to thecountries, any profits tax increase will only give negative indications to thecountries, any profits tax increase will only give negative indications to the

business sector upon which the government revenues increasingly depend.business sector upon which the government revenues increasingly depend.business sector upon which the government revenues increasingly depend.business sector upon which the government revenues increasingly depend.

Fourthly:Fourthly:Fourthly:Fourthly:

Sandwich classSandwich classSandwich classSandwich class

It would seem that the Financial Secretary's revenue proposals are substantiallyIt would seem that the Financial Secretary's revenue proposals are substantiallyIt would seem that the Financial Secretary's revenue proposals are substantiallyIt would seem that the Financial Secretary's revenue proposals are substantially

dictated by political reality and equity to restore tax benefits for the middle anddictated by political reality and equity to restore tax benefits for the middle anddictated by political reality and equity to restore tax benefits for the middle anddictated by political reality and equity to restore tax benefits for the middle and

lower income groups. However, the additional revenue from profits tax has not beenlower income groups. However, the additional revenue from profits tax has not beenlower income groups. However, the additional revenue from profits tax has not beenlower income groups. However, the additional revenue from profits tax has not been

directed to benefit the sandwich class which has been hard hit by high inflation,directed to benefit the sandwich class which has been hard hit by high inflation,directed to benefit the sandwich class which has been hard hit by high inflation,directed to benefit the sandwich class which has been hard hit by high inflation,

especially housing costs. Compared with 1988-89, the personal allowance forespecially housing costs. Compared with 1988-89, the personal allowance forespecially housing costs. Compared with 1988-89, the personal allowance forespecially housing costs. Compared with 1988-89, the personal allowance for

salaries tax for a single person has increased by 27.8% while Consumer Price Indexsalaries tax for a single person has increased by 27.8% while Consumer Price Indexsalaries tax for a single person has increased by 27.8% while Consumer Price Indexsalaries tax for a single person has increased by 27.8% while Consumer Price Index

(A) has risen by 48.3%. Further the half percent increase in rates and the ending(A) has risen by 48.3%. Further the half percent increase in rates and the ending(A) has risen by 48.3%. Further the half percent increase in rates and the ending(A) has risen by 48.3%. Further the half percent increase in rates and the ending

of the cap hit the average householders and hardest at the sandwich class who tendof the cap hit the average householders and hardest at the sandwich class who tendof the cap hit the average householders and hardest at the sandwich class who tendof the cap hit the average householders and hardest at the sandwich class who tend

to own their own apartments. They are facing an increase over last year's payableto own their own apartments. They are facing an increase over last year's payableto own their own apartments. They are facing an increase over last year's payableto own their own apartments. They are facing an increase over last year's payable

rates ranging from 9.1% to 20.3%. The larger corporations may have to absorb a 34%rates ranging from 9.1% to 20.3%. The larger corporations may have to absorb a 34%rates ranging from 9.1% to 20.3%. The larger corporations may have to absorb a 34%rates ranging from 9.1% to 20.3%. The larger corporations may have to absorb a 34%

or even higher increases.or even higher increases.or even higher increases.or even higher increases.

Thus, insteThus, insteThus, insteThus, instead of upholding the formula of keeping less reserves in difficult timesad of upholding the formula of keeping less reserves in difficult timesad of upholding the formula of keeping less reserves in difficult timesad of upholding the formula of keeping less reserves in difficult times

and reducing taxes in good times, the 1992 Budget sends out contradictory messagesand reducing taxes in good times, the 1992 Budget sends out contradictory messagesand reducing taxes in good times, the 1992 Budget sends out contradictory messagesand reducing taxes in good times, the 1992 Budget sends out contradictory messages

to both the business sector and the working population.to both the business sector and the working population.to both the business sector and the working population.to both the business sector and the working population.

Fifthly:Fifthly:Fifthly:Fifthly:

Tax base/inflationTax base/inflationTax base/inflationTax base/inflation

The 1992 BudgThe 1992 BudgThe 1992 BudgThe 1992 Budget has not really addressed the long-standing questions ofet has not really addressed the long-standing questions ofet has not really addressed the long-standing questions ofet has not really addressed the long-standing questions of

broadening Hong Kong's tax base and containing public enemy number one -- inflation.broadening Hong Kong's tax base and containing public enemy number one -- inflation.broadening Hong Kong's tax base and containing public enemy number one -- inflation.broadening Hong Kong's tax base and containing public enemy number one -- inflation.

While the Financial Secretary's decision not to introduce capital gains tax is welcome,While the Financial Secretary's decision not to introduce capital gains tax is welcome,While the Financial Secretary's decision not to introduce capital gains tax is welcome,While the Financial Secretary's decision not to introduce capital gains tax is welcome,

few measures other than the promised tightening of tax loopholes have been adoptedfew measures other than the promised tightening of tax loopholes have been adoptedfew measures other than the promised tightening of tax loopholes have been adoptedfew measures other than the promised tightening of tax loopholes have been adopted

to increase the revenue yield. The increase in profits tax rates would necessitateto increase the revenue yield. The increase in profits tax rates would necessitateto increase the revenue yield. The increase in profits tax rates would necessitateto increase the revenue yield. The increase in profits tax rates would necessitate

a review of other tax rates so that all taxpayers, including the self-employed, area review of other tax rates so that all taxpayers, including the self-employed, area review of other tax rates so that all taxpayers, including the self-employed, area review of other tax rates so that all taxpayers, including the self-employed, are

put on an equal footing. The balance between direct and indirect taxation -- at 60/40put on an equal footing. The balance between direct and indirect taxation -- at 60/40put on an equal footing. The balance between direct and indirect taxation -- at 60/40put on an equal footing. The balance between direct and indirect taxation -- at 60/40

-- which has been omitted from this year's Budget for reasons unknown ought to be-- which has been omitted from this year's Budget for reasons unknown ought to be-- which has been omitted from this year's Budget for reasons unknown ought to be-- which has been omitted from this year's Budget for reasons unknown ought to be

put on record and examined.put on record and examined.put on record and examined.put on record and examined.

Mr Deputy President, while I appreciate the limited options open to theMr Deputy President, while I appreciate the limited options open to theMr Deputy President, while I appreciate the limited options open to theMr Deputy President, while I appreciate the limited options open to the

Administration in finding tangible solutions for combating inflation, I am somewhatAdministration in finding tangible solutions for combating inflation, I am somewhatAdministration in finding tangible solutions for combating inflation, I am somewhatAdministration in finding tangible solutions for combating inflation, I am somewhat

irritated by the almost inadvertent attitude with which the Financial Secretaryirritated by the almost inadvertent attitude with which the Financial Secretaryirritated by the almost inadvertent attitude with which the Financial Secretaryirritated by the almost inadvertent attitude with which the Financial Secretary

addressed this significant issue. Apart from temporarily abandoning the idea of aaddressed this significant issue. Apart from temporarily abandoning the idea of aaddressed this significant issue. Apart from temporarily abandoning the idea of aaddressed this significant issue. Apart from temporarily abandoning the idea of a

sales tax and postponing adjustments of fees and charges until later in the Session,sales tax and postponing adjustments of fees and charges until later in the Session,sales tax and postponing adjustments of fees and charges until later in the Session,sales tax and postponing adjustments of fees and charges until later in the Session,

fiscal measures have not been used as a tool to fight inflation forecast still atfiscal measures have not been used as a tool to fight inflation forecast still atfiscal measures have not been used as a tool to fight inflation forecast still atfiscal measures have not been used as a tool to fight inflation forecast still at

10% to 11% by 1994-95. Surely more could have been done to curb property speculation.10% to 11% by 1994-95. Surely more could have been done to curb property speculation.10% to 11% by 1994-95. Surely more could have been done to curb property speculation.10% to 11% by 1994-95. Surely more could have been done to curb property speculation.

To sum up, these are my mTo sum up, these are my mTo sum up, these are my mTo sum up, these are my main points again:ain points again:ain points again:ain points again:

(1)(1)(1)(1) Public expenditure should rise by no more than the growth rate in GDP.Public expenditure should rise by no more than the growth rate in GDP.Public expenditure should rise by no more than the growth rate in GDP.Public expenditure should rise by no more than the growth rate in GDP.

(2)(2)(2)(2) The budgetted 1992-93 surplus appears unduly large in view of the currentThe budgetted 1992-93 surplus appears unduly large in view of the currentThe budgetted 1992-93 surplus appears unduly large in view of the currentThe budgetted 1992-93 surplus appears unduly large in view of the current

economic prospects.economic prospects.economic prospects.economic prospects.

(3)(3)(3)(3) The differential of 2.5% between profits tax and salariThe differential of 2.5% between profits tax and salariThe differential of 2.5% between profits tax and salariThe differential of 2.5% between profits tax and salaries tax is undesirable.es tax is undesirable.es tax is undesirable.es tax is undesirable.

(4)(4)(4)(4) More should be done to help the sandwich class.More should be done to help the sandwich class.More should be done to help the sandwich class.More should be done to help the sandwich class.

(5)(5)(5)(5) More should be done to broaden the tax base and increase the proportion ofMore should be done to broaden the tax base and increase the proportion ofMore should be done to broaden the tax base and increase the proportion ofMore should be done to broaden the tax base and increase the proportion of

revenue which is collected from indirect taxation.revenue which is collected from indirect taxation.revenue which is collected from indirect taxation.revenue which is collected from indirect taxation.

Forward visionForward visionForward visionForward vision

Here, I wish to emphasize the Here, I wish to emphasize the Here, I wish to emphasize the Here, I wish to emphasize the need for the Government to formulate long-termneed for the Government to formulate long-termneed for the Government to formulate long-termneed for the Government to formulate long-term

fiscal policies. The five-year medium term forecast is no more than a rolling forecastfiscal policies. The five-year medium term forecast is no more than a rolling forecastfiscal policies. The five-year medium term forecast is no more than a rolling forecastfiscal policies. The five-year medium term forecast is no more than a rolling forecast

of what is in the works. We have a government which should be leading us and, clearly,of what is in the works. We have a government which should be leading us and, clearly,of what is in the works. We have a government which should be leading us and, clearly,of what is in the works. We have a government which should be leading us and, clearly,

that government must have a long-term vision of what Hong Kong will be like and howthat government must have a long-term vision of what Hong Kong will be like and howthat government must have a long-term vision of what Hong Kong will be like and howthat government must have a long-term vision of what Hong Kong will be like and how

it earns its living in 10 or 20 years' time. Only by formulating and sharing suchit earns its living in 10 or 20 years' time. Only by formulating and sharing suchit earns its living in 10 or 20 years' time. Only by formulating and sharing suchit earns its living in 10 or 20 years' time. Only by formulating and sharing such

a vision with Hong Kong people can we begin to formulate short and medium-term plansa vision with Hong Kong people can we begin to formulate short and medium-term plansa vision with Hong Kong people can we begin to formulate short and medium-term plansa vision with Hong Kong people can we begin to formulate short and medium-term plans

and strategies which are really responsive to current situations and challenges.and strategies which are really responsive to current situations and challenges.and strategies which are really responsive to current situations and challenges.and strategies which are really responsive to current situations and challenges.

Final actionFinal actionFinal actionFinal action

For me, this Budget has offered more disappointments than inspirations. I haveFor me, this Budget has offered more disappointments than inspirations. I haveFor me, this Budget has offered more disappointments than inspirations. I haveFor me, this Budget has offered more disappointments than inspirations. I have

gone on record to say that I will not vote the Appropriation Bill down. I may havegone on record to say that I will not vote the Appropriation Bill down. I may havegone on record to say that I will not vote the Appropriation Bill down. I may havegone on record to say that I will not vote the Appropriation Bill down. I may have

little option but to support the rates amendment in order to drive home the need forlittle option but to support the rates amendment in order to drive home the need forlittle option but to support the rates amendment in order to drive home the need forlittle option but to support the rates amendment in order to drive home the need for

the Financial Secretary to deliver the right economic message to Hong Kong and tothe Financial Secretary to deliver the right economic message to Hong Kong and tothe Financial Secretary to deliver the right economic message to Hong Kong and tothe Financial Secretary to deliver the right economic message to Hong Kong and to

the world. My final decision on the course of action to take will be governed bythe world. My final decision on the course of action to take will be governed bythe world. My final decision on the course of action to take will be governed bythe world. My final decision on the course of action to take will be governed by

the Administration's response next Wednesday.the Administration's response next Wednesday.the Administration's response next Wednesday.the Administration's response next Wednesday.

I will now turn to other matters:I will now turn to other matters:I will now turn to other matters:I will now turn to other matters:

The environmentThe environmentThe environmentThe environment

It is not too much to ask that we spare a thought for our precious and endangeredIt is not too much to ask that we spare a thought for our precious and endangeredIt is not too much to ask that we spare a thought for our precious and endangeredIt is not too much to ask that we spare a thought for our precious and endangered

environment. There is growing awareness the world over of the destruction of rainenvironment. There is growing awareness the world over of the destruction of rainenvironment. There is growing awareness the world over of the destruction of rainenvironment. There is growing awareness the world over of the destruction of rain

forests in our surrounding countries. The northern ozone layer has also been depletedforests in our surrounding countries. The northern ozone layer has also been depletedforests in our surrounding countries. The northern ozone layer has also been depletedforests in our surrounding countries. The northern ozone layer has also been depleted

by the usage of CFC's. Nearer home, water quality is very high priority.by the usage of CFC's. Nearer home, water quality is very high priority.by the usage of CFC's. Nearer home, water quality is very high priority.by the usage of CFC's. Nearer home, water quality is very high priority.

In the White Paper: Pollution -- A time to act, the Environmental ProtectionIn the White Paper: Pollution -- A time to act, the Environmental ProtectionIn the White Paper: Pollution -- A time to act, the Environmental ProtectionIn the White Paper: Pollution -- A time to act, the Environmental Protection

Department has very carefully laid out a programme of environmental initiatives thatDepartment has very carefully laid out a programme of environmental initiatives thatDepartment has very carefully laid out a programme of environmental initiatives thatDepartment has very carefully laid out a programme of environmental initiatives that

must be taken to prevent further environmental disasters. Regrettably there aremust be taken to prevent further environmental disasters. Regrettably there aremust be taken to prevent further environmental disasters. Regrettably there aremust be taken to prevent further environmental disasters. Regrettably there are

already slippages and more delays are likely in the face of financial contingencies.already slippages and more delays are likely in the face of financial contingencies.already slippages and more delays are likely in the face of financial contingencies.already slippages and more delays are likely in the face of financial contingencies.

Unless we take firm action according to the timetable set out in the White Paper,Unless we take firm action according to the timetable set out in the White Paper,Unless we take firm action according to the timetable set out in the White Paper,Unless we take firm action according to the timetable set out in the White Paper,

we stand to be marked by history as being the contributing cause of irreversiblewe stand to be marked by history as being the contributing cause of irreversiblewe stand to be marked by history as being the contributing cause of irreversiblewe stand to be marked by history as being the contributing cause of irreversible

pollution with catastrophic consequences.pollution with catastrophic consequences.pollution with catastrophic consequences.pollution with catastrophic consequences.

OLI financeOLI financeOLI financeOLI finance

I wish also to address the situation of the Open Learning Institute of which II wish also to address the situation of the Open Learning Institute of which II wish also to address the situation of the Open Learning Institute of which II wish also to address the situation of the Open Learning Institute of which I

am the Deputy Chairman. Contrary to misinformation and misguided opinion, I wouldam the Deputy Chairman. Contrary to misinformation and misguided opinion, I wouldam the Deputy Chairman. Contrary to misinformation and misguided opinion, I wouldam the Deputy Chairman. Contrary to misinformation and misguided opinion, I would

like to stress that its academic degrees will be just as meaningful as those of alike to stress that its academic degrees will be just as meaningful as those of alike to stress that its academic degrees will be just as meaningful as those of alike to stress that its academic degrees will be just as meaningful as those of a

conventional tertiary institution. Just because entry is open, the OLI must controlconventional tertiary institution. Just because entry is open, the OLI must controlconventional tertiary institution. Just because entry is open, the OLI must controlconventional tertiary institution. Just because entry is open, the OLI must control

its output vigorously through very stringent quality control over assignments andits output vigorously through very stringent quality control over assignments andits output vigorously through very stringent quality control over assignments andits output vigorously through very stringent quality control over assignments and

examinations, and dropouts are not unexpected. Moreover, the Institute is subjectexaminations, and dropouts are not unexpected. Moreover, the Institute is subjectexaminations, and dropouts are not unexpected. Moreover, the Institute is subjectexaminations, and dropouts are not unexpected. Moreover, the Institute is subject

to the full scrutiny of the Hong Kong Council for Academic Accreditation.to the full scrutiny of the Hong Kong Council for Academic Accreditation.to the full scrutiny of the Hong Kong Council for Academic Accreditation.to the full scrutiny of the Hong Kong Council for Academic Accreditation.

I would also urge the GovernmI would also urge the GovernmI would also urge the GovernmI would also urge the Government to review its existing policy regarding the Localent to review its existing policy regarding the Localent to review its existing policy regarding the Localent to review its existing policy regarding the Local

Student Finance Scheme which only provides support to UPGC courses, thus denyingStudent Finance Scheme which only provides support to UPGC courses, thus denyingStudent Finance Scheme which only provides support to UPGC courses, thus denyingStudent Finance Scheme which only provides support to UPGC courses, thus denying

deserving OLI students who are in need of financial support for their learning. Ideserving OLI students who are in need of financial support for their learning. Ideserving OLI students who are in need of financial support for their learning. Ideserving OLI students who are in need of financial support for their learning. I

would also like to know whether OLI students will be able to benefit from thewould also like to know whether OLI students will be able to benefit from thewould also like to know whether OLI students will be able to benefit from thewould also like to know whether OLI students will be able to benefit from the

retraining allowances being worked out by the Provisional Retraining Fund Board sinceretraining allowances being worked out by the Provisional Retraining Fund Board sinceretraining allowances being worked out by the Provisional Retraining Fund Board sinceretraining allowances being worked out by the Provisional Retraining Fund Board since

some of them are taking full-time OLI courses to acquire new vocational skills.some of them are taking full-time OLI courses to acquire new vocational skills.some of them are taking full-time OLI courses to acquire new vocational skills.some of them are taking full-time OLI courses to acquire new vocational skills.

It has also been nearly three years since its coIt has also been nearly three years since its coIt has also been nearly three years since its coIt has also been nearly three years since its commencement and the OLI will soonmmencement and the OLI will soonmmencement and the OLI will soonmmencement and the OLI will soon

have to become financially self-sufficient. Everywhere else, the colleges of openhave to become financially self-sufficient. Everywhere else, the colleges of openhave to become financially self-sufficient. Everywhere else, the colleges of openhave to become financially self-sufficient. Everywhere else, the colleges of open

learning get some form of financial assistance from their governments. Why then islearning get some form of financial assistance from their governments. Why then islearning get some form of financial assistance from their governments. Why then islearning get some form of financial assistance from their governments. Why then is

our Institute an exception?our Institute an exception?our Institute an exception?our Institute an exception?

While charging our studentWhile charging our studentWhile charging our studentWhile charging our students the recurrent cost of running the courses is fullys the recurrent cost of running the courses is fullys the recurrent cost of running the courses is fullys the recurrent cost of running the courses is fully

justifiable, I do not feel that we should make a profit out of our students in orderjustifiable, I do not feel that we should make a profit out of our students in orderjustifiable, I do not feel that we should make a profit out of our students in orderjustifiable, I do not feel that we should make a profit out of our students in order

to expand the scope of our services. It is also wrong that the OLI has to pay toto expand the scope of our services. It is also wrong that the OLI has to pay toto expand the scope of our services. It is also wrong that the OLI has to pay toto expand the scope of our services. It is also wrong that the OLI has to pay to

the Government a commercial rent which has to be recovered from our students. Unlikethe Government a commercial rent which has to be recovered from our students. Unlikethe Government a commercial rent which has to be recovered from our students. Unlikethe Government a commercial rent which has to be recovered from our students. Unlike

the other tertiary institutions which have found the safe haven of the UPGC, the OLIthe other tertiary institutions which have found the safe haven of the UPGC, the OLIthe other tertiary institutions which have found the safe haven of the UPGC, the OLIthe other tertiary institutions which have found the safe haven of the UPGC, the OLI

will be left on its own to struggle for survival. Surely, it is not too much to askwill be left on its own to struggle for survival. Surely, it is not too much to askwill be left on its own to struggle for survival. Surely, it is not too much to askwill be left on its own to struggle for survival. Surely, it is not too much to ask

for the Institute's own roof under which it operates.for the Institute's own roof under which it operates.for the Institute's own roof under which it operates.for the Institute's own roof under which it operates.

The Hospital AuthorityThe Hospital AuthorityThe Hospital AuthorityThe Hospital Authority

As a member of the Hospital Authority, I really feel that the text under HeadAs a member of the Hospital Authority, I really feel that the text under HeadAs a member of the Hospital Authority, I really feel that the text under HeadAs a member of the Hospital Authority, I really feel that the text under Head

177 seeking a subvention of over $10 billion is grossly inadequate to justify the177 seeking a subvention of over $10 billion is grossly inadequate to justify the177 seeking a subvention of over $10 billion is grossly inadequate to justify the177 seeking a subvention of over $10 billion is grossly inadequate to justify the

expenditure. I propose that for future years, an ad hoc group similar to the oneexpenditure. I propose that for future years, an ad hoc group similar to the oneexpenditure. I propose that for future years, an ad hoc group similar to the oneexpenditure. I propose that for future years, an ad hoc group similar to the one

that scrutinizes the budget of the Securities and Futures Commission be formed.that scrutinizes the budget of the Securities and Futures Commission be formed.that scrutinizes the budget of the Securities and Futures Commission be formed.that scrutinizes the budget of the Securities and Futures Commission be formed.

While recognizing the degree of autonomy accorded to the Authority, the group shouldWhile recognizing the degree of autonomy accorded to the Authority, the group shouldWhile recognizing the degree of autonomy accorded to the Authority, the group shouldWhile recognizing the degree of autonomy accorded to the Authority, the group should

review in broad detail the Authority's recent performance, its plans for the yearsreview in broad detail the Authority's recent performance, its plans for the yearsreview in broad detail the Authority's recent performance, its plans for the yearsreview in broad detail the Authority's recent performance, its plans for the years

ahead and the general recommendation of the Administration as to the level ofahead and the general recommendation of the Administration as to the level ofahead and the general recommendation of the Administration as to the level ofahead and the general recommendation of the Administration as to the level of

subvention. This group will offer an additional safeguard designed to increase thesubvention. This group will offer an additional safeguard designed to increase thesubvention. This group will offer an additional safeguard designed to increase thesubvention. This group will offer an additional safeguard designed to increase the

transparency and accountability of the Hospital Authority. Once funding proposalstransparency and accountability of the Hospital Authority. Once funding proposalstransparency and accountability of the Hospital Authority. Once funding proposalstransparency and accountability of the Hospital Authority. Once funding proposals

are approved, the Authority should be left to get on with its work.are approved, the Authority should be left to get on with its work.are approved, the Authority should be left to get on with its work.are approved, the Authority should be left to get on with its work.

Mr Deputy President, with these words, I support the Appropriation Bill.Mr Deputy President, with these words, I support the Appropriation Bill.Mr Deputy President, with these words, I support the Appropriation Bill.Mr Deputy President, with these words, I support the Appropriation Bill.

PROF EDWARD CHEN: Mr Deputy President, the Budget for 1992-93 is conventional, prudent,PROF EDWARD CHEN: Mr Deputy President, the Budget for 1992-93 is conventional, prudent,PROF EDWARD CHEN: Mr Deputy President, the Budget for 1992-93 is conventional, prudent,PROF EDWARD CHEN: Mr Deputy President, the Budget for 1992-93 is conventional, prudent,

and mild. It is also a balanced Budget, not only in that it incurs no deficits, butand mild. It is also a balanced Budget, not only in that it incurs no deficits, butand mild. It is also a balanced Budget, not only in that it incurs no deficits, butand mild. It is also a balanced Budget, not only in that it incurs no deficits, but

also in the sense that it gives and takes a little from different sectors of thealso in the sense that it gives and takes a little from different sectors of thealso in the sense that it gives and takes a little from different sectors of thealso in the sense that it gives and takes a little from different sectors of the

community. As such, it is inevitable that the Budget proposals will not be applaudedcommunity. As such, it is inevitable that the Budget proposals will not be applaudedcommunity. As such, it is inevitable that the Budget proposals will not be applaudedcommunity. As such, it is inevitable that the Budget proposals will not be applauded

or severely criticized. Following the conventional economic approach, I shallor severely criticized. Following the conventional economic approach, I shallor severely criticized. Following the conventional economic approach, I shallor severely criticized. Following the conventional economic approach, I shall

comment on the Budget proposals under three major headings, namely (a) growth, (b)comment on the Budget proposals under three major headings, namely (a) growth, (b)comment on the Budget proposals under three major headings, namely (a) growth, (b)comment on the Budget proposals under three major headings, namely (a) growth, (b)

stability, and (c) equity.stability, and (c) equity.stability, and (c) equity.stability, and (c) equity.

First, with regard to growth and resources allocation, the major weakness of theFirst, with regard to growth and resources allocation, the major weakness of theFirst, with regard to growth and resources allocation, the major weakness of theFirst, with regard to growth and resources allocation, the major weakness of the

revenue and expenditure proposals is the single-minded focus on building physicalrevenue and expenditure proposals is the single-minded focus on building physicalrevenue and expenditure proposals is the single-minded focus on building physicalrevenue and expenditure proposals is the single-minded focus on building physical

infrastructure for the purpose of promoting Hong Kong's long-term economic growthinfrastructure for the purpose of promoting Hong Kong's long-term economic growthinfrastructure for the purpose of promoting Hong Kong's long-term economic growthinfrastructure for the purpose of promoting Hong Kong's long-term economic growth

with particular reference to the port and airport projects. In doing so, thewith particular reference to the port and airport projects. In doing so, thewith particular reference to the port and airport projects. In doing so, thewith particular reference to the port and airport projects. In doing so, the

importance of manpower and technological infrastructure has largely been neglected.importance of manpower and technological infrastructure has largely been neglected.importance of manpower and technological infrastructure has largely been neglected.importance of manpower and technological infrastructure has largely been neglected.

It is distressing to note that the share of education in total government expenditureIt is distressing to note that the share of education in total government expenditureIt is distressing to note that the share of education in total government expenditureIt is distressing to note that the share of education in total government expenditure

deceases in 1992-93 compared to previous years. As a matter of fact, modern economicdeceases in 1992-93 compared to previous years. As a matter of fact, modern economicdeceases in 1992-93 compared to previous years. As a matter of fact, modern economicdeceases in 1992-93 compared to previous years. As a matter of fact, modern economic

development theory identifies investment in human capital as the single mostdevelopment theory identifies investment in human capital as the single mostdevelopment theory identifies investment in human capital as the single mostdevelopment theory identifies investment in human capital as the single most

important factor affecting long-term growth and structural change. While technologyimportant factor affecting long-term growth and structural change. While technologyimportant factor affecting long-term growth and structural change. While technologyimportant factor affecting long-term growth and structural change. While technology

and capital can quite easily be acquired in the open market, human resources are lessand capital can quite easily be acquired in the open market, human resources are lessand capital can quite easily be acquired in the open market, human resources are lessand capital can quite easily be acquired in the open market, human resources are less

mobile and it takes a long time to build up the manpower infrastructure of an economy.mobile and it takes a long time to build up the manpower infrastructure of an economy.mobile and it takes a long time to build up the manpower infrastructure of an economy.mobile and it takes a long time to build up the manpower infrastructure of an economy.

Relative to many countries, our percentage of education expenditure in GDP is low.Relative to many countries, our percentage of education expenditure in GDP is low.Relative to many countries, our percentage of education expenditure in GDP is low.Relative to many countries, our percentage of education expenditure in GDP is low.

The low figure for Hong Kong, in my view, cannot simply be justified by Hong Kong'sThe low figure for Hong Kong, in my view, cannot simply be justified by Hong Kong'sThe low figure for Hong Kong, in my view, cannot simply be justified by Hong Kong'sThe low figure for Hong Kong, in my view, cannot simply be justified by Hong Kong's

relatively small public sector. Education expenditure should be sufficient torelatively small public sector. Education expenditure should be sufficient torelatively small public sector. Education expenditure should be sufficient torelatively small public sector. Education expenditure should be sufficient to

promote the long-term growth capacity of the economy irrespective of the size of thepromote the long-term growth capacity of the economy irrespective of the size of thepromote the long-term growth capacity of the economy irrespective of the size of thepromote the long-term growth capacity of the economy irrespective of the size of the

public sector. At present, we are only spending about 3% of our GDP on education.public sector. At present, we are only spending about 3% of our GDP on education.public sector. At present, we are only spending about 3% of our GDP on education.public sector. At present, we are only spending about 3% of our GDP on education.

It is 6.6% in the United States; 6.4% in Singapore; 5.5% in Korea; 4.8% in Japan.It is 6.6% in the United States; 6.4% in Singapore; 5.5% in Korea; 4.8% in Japan.It is 6.6% in the United States; 6.4% in Singapore; 5.5% in Korea; 4.8% in Japan.It is 6.6% in the United States; 6.4% in Singapore; 5.5% in Korea; 4.8% in Japan.

Even in Thailand and Malaysia, where the level of economic development is lower thanEven in Thailand and Malaysia, where the level of economic development is lower thanEven in Thailand and Malaysia, where the level of economic development is lower thanEven in Thailand and Malaysia, where the level of economic development is lower than

Hong Kong, their percentage of expenditure on education in GDP is higher than ours.Hong Kong, their percentage of expenditure on education in GDP is higher than ours.Hong Kong, their percentage of expenditure on education in GDP is higher than ours.Hong Kong, their percentage of expenditure on education in GDP is higher than ours.

It is most disturbing to note that expenditure on primary and secondary educationIt is most disturbing to note that expenditure on primary and secondary educationIt is most disturbing to note that expenditure on primary and secondary educationIt is most disturbing to note that expenditure on primary and secondary education

has been squeezed. Most of the studies indicate that the rate of return for primaryhas been squeezed. Most of the studies indicate that the rate of return for primaryhas been squeezed. Most of the studies indicate that the rate of return for primaryhas been squeezed. Most of the studies indicate that the rate of return for primary

and secondary education is high and usually higher than that for tertiary education.and secondary education is high and usually higher than that for tertiary education.and secondary education is high and usually higher than that for tertiary education.and secondary education is high and usually higher than that for tertiary education.

The Budget proposals have also paid very little attention to the importance ofThe Budget proposals have also paid very little attention to the importance ofThe Budget proposals have also paid very little attention to the importance ofThe Budget proposals have also paid very little attention to the importance of

enhancing the technological capability of our economy. Certainly, the Governmentenhancing the technological capability of our economy. Certainly, the Governmentenhancing the technological capability of our economy. Certainly, the Governmentenhancing the technological capability of our economy. Certainly, the Government

has done more in this respect than in the past, for example, the introduction of ahas done more in this respect than in the past, for example, the introduction of ahas done more in this respect than in the past, for example, the introduction of ahas done more in this respect than in the past, for example, the introduction of a

matching grant scheme for industrial research and development, and the setting upmatching grant scheme for industrial research and development, and the setting upmatching grant scheme for industrial research and development, and the setting upmatching grant scheme for industrial research and development, and the setting up

of an Industrial Technology Development Council. However, fiscal measures cannotof an Industrial Technology Development Council. However, fiscal measures cannotof an Industrial Technology Development Council. However, fiscal measures cannotof an Industrial Technology Development Council. However, fiscal measures cannot

be underestimated as effective means to promote the research and developmentbe underestimated as effective means to promote the research and developmentbe underestimated as effective means to promote the research and developmentbe underestimated as effective means to promote the research and development

activities of the private sector. There are very good reasons for the Governmentactivities of the private sector. There are very good reasons for the Governmentactivities of the private sector. There are very good reasons for the Governmentactivities of the private sector. There are very good reasons for the Government

to adopt an active research and development strategy. As the private rate of returnto adopt an active research and development strategy. As the private rate of returnto adopt an active research and development strategy. As the private rate of returnto adopt an active research and development strategy. As the private rate of return

on research and development is much lower than the social rate of return, there ison research and development is much lower than the social rate of return, there ison research and development is much lower than the social rate of return, there ison research and development is much lower than the social rate of return, there is

a tendency for expenditure on R&D to be much lower than the optimal level when thea tendency for expenditure on R&D to be much lower than the optimal level when thea tendency for expenditure on R&D to be much lower than the optimal level when thea tendency for expenditure on R&D to be much lower than the optimal level when the

private sector is left to do it all by itself. Tax incentives or concessions, ifprivate sector is left to do it all by itself. Tax incentives or concessions, ifprivate sector is left to do it all by itself. Tax incentives or concessions, ifprivate sector is left to do it all by itself. Tax incentives or concessions, if

properly designed, should be more effective than Hong Kong's traditional emphasisproperly designed, should be more effective than Hong Kong's traditional emphasisproperly designed, should be more effective than Hong Kong's traditional emphasisproperly designed, should be more effective than Hong Kong's traditional emphasis

on low profits tax in inducing long-term investment. For example, tax concessionson low profits tax in inducing long-term investment. For example, tax concessionson low profits tax in inducing long-term investment. For example, tax concessionson low profits tax in inducing long-term investment. For example, tax concessions

for expenditure on training and research and development, and an immediate write-offfor expenditure on training and research and development, and an immediate write-offfor expenditure on training and research and development, and an immediate write-offfor expenditure on training and research and development, and an immediate write-off

of capital expenditure could be introduced. In a recent study, spending by companiesof capital expenditure could be introduced. In a recent study, spending by companiesof capital expenditure could be introduced. In a recent study, spending by companiesof capital expenditure could be introduced. In a recent study, spending by companies

on research and development was found to be more sensitive to small changes in taxeson research and development was found to be more sensitive to small changes in taxeson research and development was found to be more sensitive to small changes in taxeson research and development was found to be more sensitive to small changes in taxes

than economists had assumed. Changes in the 1986 tax law reduced America's researchthan economists had assumed. Changes in the 1986 tax law reduced America's researchthan economists had assumed. Changes in the 1986 tax law reduced America's researchthan economists had assumed. Changes in the 1986 tax law reduced America's research

and development spending by as much as US$2.2 billion a year, in return for only US$1.2and development spending by as much as US$2.2 billion a year, in return for only US$1.2and development spending by as much as US$2.2 billion a year, in return for only US$1.2and development spending by as much as US$2.2 billion a year, in return for only US$1.2

billion in added tax revenue. In the present stage of Hong Kong's rapid economicbillion in added tax revenue. In the present stage of Hong Kong's rapid economicbillion in added tax revenue. In the present stage of Hong Kong's rapid economicbillion in added tax revenue. In the present stage of Hong Kong's rapid economic

transformation, the Government should adopt a more flexible stance with regard totransformation, the Government should adopt a more flexible stance with regard totransformation, the Government should adopt a more flexible stance with regard totransformation, the Government should adopt a more flexible stance with regard to

its traditional fiscal objective of maintaining neutrality in resources allocation.its traditional fiscal objective of maintaining neutrality in resources allocation.its traditional fiscal objective of maintaining neutrality in resources allocation.its traditional fiscal objective of maintaining neutrality in resources allocation.

Secondly, the Budget for 1992-93 has, to a large extent, fulfilled the objectiveSecondly, the Budget for 1992-93 has, to a large extent, fulfilled the objectiveSecondly, the Budget for 1992-93 has, to a large extent, fulfilled the objectiveSecondly, the Budget for 1992-93 has, to a large extent, fulfilled the objective

of generating economic stability. At the macroeconomic level, although the Budgetof generating economic stability. At the macroeconomic level, although the Budgetof generating economic stability. At the macroeconomic level, although the Budgetof generating economic stability. At the macroeconomic level, although the Budget

has a surplus, government expenditure will increase by 7.7% in real terms comparedhas a surplus, government expenditure will increase by 7.7% in real terms comparedhas a surplus, government expenditure will increase by 7.7% in real terms comparedhas a surplus, government expenditure will increase by 7.7% in real terms compared

to 1991-92. This should produce a moderate expansionary effect on the economy into 1991-92. This should produce a moderate expansionary effect on the economy into 1991-92. This should produce a moderate expansionary effect on the economy into 1991-92. This should produce a moderate expansionary effect on the economy in

the short run. In view of the fact that we have to increase our spending for carryingthe short run. In view of the fact that we have to increase our spending for carryingthe short run. In view of the fact that we have to increase our spending for carryingthe short run. In view of the fact that we have to increase our spending for carrying

out infrastructural projects and, at the same time, we face some supply constraints,out infrastructural projects and, at the same time, we face some supply constraints,out infrastructural projects and, at the same time, we face some supply constraints,out infrastructural projects and, at the same time, we face some supply constraints,

especially in the supply of labour, this surplus Budget with a modest increase ofespecially in the supply of labour, this surplus Budget with a modest increase ofespecially in the supply of labour, this surplus Budget with a modest increase ofespecially in the supply of labour, this surplus Budget with a modest increase of

expenditure should be appropriate for present economic circumstances in Hong Kongexpenditure should be appropriate for present economic circumstances in Hong Kongexpenditure should be appropriate for present economic circumstances in Hong Kongexpenditure should be appropriate for present economic circumstances in Hong Kong

which is at the beginning of an upswing in the business cycle. In fact, financingwhich is at the beginning of an upswing in the business cycle. In fact, financingwhich is at the beginning of an upswing in the business cycle. In fact, financingwhich is at the beginning of an upswing in the business cycle. In fact, financing

the port and airport projects substantially by domestic and foreign borrowing is athe port and airport projects substantially by domestic and foreign borrowing is athe port and airport projects substantially by domestic and foreign borrowing is athe port and airport projects substantially by domestic and foreign borrowing is a

fairer policy which is also less inflationary. It is just fair to ask the futurefairer policy which is also less inflationary. It is just fair to ask the futurefairer policy which is also less inflationary. It is just fair to ask the futurefairer policy which is also less inflationary. It is just fair to ask the future

generation to pay for benefits to be realized in the future. Unfortunately, thegeneration to pay for benefits to be realized in the future. Unfortunately, thegeneration to pay for benefits to be realized in the future. Unfortunately, thegeneration to pay for benefits to be realized in the future. Unfortunately, the

Chinese Government has unwisely imposed restrictions on how much we can borrow.Chinese Government has unwisely imposed restrictions on how much we can borrow.Chinese Government has unwisely imposed restrictions on how much we can borrow.Chinese Government has unwisely imposed restrictions on how much we can borrow.

A major macroeconomic objective oA major macroeconomic objective oA major macroeconomic objective oA major macroeconomic objective of any budgetary policy is to maintain af any budgetary policy is to maintain af any budgetary policy is to maintain af any budgetary policy is to maintain a

reasonably high level of economic growth with price stability. The proposed Budgetreasonably high level of economic growth with price stability. The proposed Budgetreasonably high level of economic growth with price stability. The proposed Budgetreasonably high level of economic growth with price stability. The proposed Budget

will sustain a 5% to 6% growth of GDP this year. But it is unlikely that the ratewill sustain a 5% to 6% growth of GDP this year. But it is unlikely that the ratewill sustain a 5% to 6% growth of GDP this year. But it is unlikely that the ratewill sustain a 5% to 6% growth of GDP this year. But it is unlikely that the rate

of inflation will come down significantly in the near future. But, inasmuch asof inflation will come down significantly in the near future. But, inasmuch asof inflation will come down significantly in the near future. But, inasmuch asof inflation will come down significantly in the near future. But, inasmuch as

current inflation in Hong Kong is structural and related to the economiccurrent inflation in Hong Kong is structural and related to the economiccurrent inflation in Hong Kong is structural and related to the economiccurrent inflation in Hong Kong is structural and related to the economic

transformation in Hong Kong, short-term budgetary policy can do very little to combattransformation in Hong Kong, short-term budgetary policy can do very little to combattransformation in Hong Kong, short-term budgetary policy can do very little to combattransformation in Hong Kong, short-term budgetary policy can do very little to combat

inflation. Structural inflation requires long-term structural policies toinflation. Structural inflation requires long-term structural policies toinflation. Structural inflation requires long-term structural policies toinflation. Structural inflation requires long-term structural policies to

facilitate the transformation of the economy. It is unfair to criticize thefacilitate the transformation of the economy. It is unfair to criticize thefacilitate the transformation of the economy. It is unfair to criticize thefacilitate the transformation of the economy. It is unfair to criticize the

Financial Secretary for not doing enough to combat inflation in his Budget. Overall,Financial Secretary for not doing enough to combat inflation in his Budget. Overall,Financial Secretary for not doing enough to combat inflation in his Budget. Overall,Financial Secretary for not doing enough to combat inflation in his Budget. Overall,

the Budget for 1992-93 should be more or less neutral on changes in the price level.the Budget for 1992-93 should be more or less neutral on changes in the price level.the Budget for 1992-93 should be more or less neutral on changes in the price level.the Budget for 1992-93 should be more or less neutral on changes in the price level.

On the one hand, the Financial Secretary has removed indirect taxes on some non-On the one hand, the Financial Secretary has removed indirect taxes on some non-On the one hand, the Financial Secretary has removed indirect taxes on some non-On the one hand, the Financial Secretary has removed indirect taxes on some non-

luxury goods and increased profits tax by one percentage point; these measures shouldluxury goods and increased profits tax by one percentage point; these measures shouldluxury goods and increased profits tax by one percentage point; these measures shouldluxury goods and increased profits tax by one percentage point; these measures should

produce a short-term dampening effect on price increases. But on the other hand,produce a short-term dampening effect on price increases. But on the other hand,produce a short-term dampening effect on price increases. But on the other hand,produce a short-term dampening effect on price increases. But on the other hand,

the Financial Secretary has also increased property rates and tax on some commodities.the Financial Secretary has also increased property rates and tax on some commodities.the Financial Secretary has also increased property rates and tax on some commodities.the Financial Secretary has also increased property rates and tax on some commodities.

Perhaps, the Financial Secretary has underestimated the inflationary impact ofPerhaps, the Financial Secretary has underestimated the inflationary impact ofPerhaps, the Financial Secretary has underestimated the inflationary impact ofPerhaps, the Financial Secretary has underestimated the inflationary impact of

increases in rates. His estimate of adding only 0.14% to inflation has not takenincreases in rates. His estimate of adding only 0.14% to inflation has not takenincreases in rates. His estimate of adding only 0.14% to inflation has not takenincreases in rates. His estimate of adding only 0.14% to inflation has not taken

into consideration the secondary effects of rate increases on prices. For example,into consideration the secondary effects of rate increases on prices. For example,into consideration the secondary effects of rate increases on prices. For example,into consideration the secondary effects of rate increases on prices. For example,

the increase in rates for commercial and industrial premises will have secondarythe increase in rates for commercial and industrial premises will have secondarythe increase in rates for commercial and industrial premises will have secondarythe increase in rates for commercial and industrial premises will have secondary

effects on the price of final goods. However, taking everything together, the impacteffects on the price of final goods. However, taking everything together, the impacteffects on the price of final goods. However, taking everything together, the impacteffects on the price of final goods. However, taking everything together, the impact

of the Budget on price changes should be very small.of the Budget on price changes should be very small.of the Budget on price changes should be very small.of the Budget on price changes should be very small.

Thirdly, like his predecessors, the Financial Secretary has not paid very muchThirdly, like his predecessors, the Financial Secretary has not paid very muchThirdly, like his predecessors, the Financial Secretary has not paid very muchThirdly, like his predecessors, the Financial Secretary has not paid very much

attention to the equity issue. Nonetheless, the Financial Secretary has made a firstattention to the equity issue. Nonetheless, the Financial Secretary has made a firstattention to the equity issue. Nonetheless, the Financial Secretary has made a firstattention to the equity issue. Nonetheless, the Financial Secretary has made a first

step towards bringing about greater equity in terms of salaries taxpayers versusstep towards bringing about greater equity in terms of salaries taxpayers versusstep towards bringing about greater equity in terms of salaries taxpayers versusstep towards bringing about greater equity in terms of salaries taxpayers versus

profits taxpayers. In this year's Budget, a 1% increase in profits tax will bringprofits taxpayers. In this year's Budget, a 1% increase in profits tax will bringprofits taxpayers. In this year's Budget, a 1% increase in profits tax will bringprofits taxpayers. In this year's Budget, a 1% increase in profits tax will bring

the Government an additional revenue which is exactly the revenue loss resulting fromthe Government an additional revenue which is exactly the revenue loss resulting fromthe Government an additional revenue which is exactly the revenue loss resulting fromthe Government an additional revenue which is exactly the revenue loss resulting from

the increased personal allowances granted to salaries taxpayers. The Government hadthe increased personal allowances granted to salaries taxpayers. The Government hadthe increased personal allowances granted to salaries taxpayers. The Government hadthe increased personal allowances granted to salaries taxpayers. The Government had

ignored the most inequitable increase in the past ten years in the percentage ofignored the most inequitable increase in the past ten years in the percentage ofignored the most inequitable increase in the past ten years in the percentage ofignored the most inequitable increase in the past ten years in the percentage of

salaries tax in total direct tax. In the year 1980-81, profits tax accounted forsalaries tax in total direct tax. In the year 1980-81, profits tax accounted forsalaries tax in total direct tax. In the year 1980-81, profits tax accounted forsalaries tax in total direct tax. In the year 1980-81, profits tax accounted for

69% and salaries tax for 16% of total direct tax; ten years later, in 1990-91, the69% and salaries tax for 16% of total direct tax; ten years later, in 1990-91, the69% and salaries tax for 16% of total direct tax; ten years later, in 1990-91, the69% and salaries tax for 16% of total direct tax; ten years later, in 1990-91, the

percentage of profits tax in total direct tax decreased to 58% and that of salariespercentage of profits tax in total direct tax decreased to 58% and that of salariespercentage of profits tax in total direct tax decreased to 58% and that of salariespercentage of profits tax in total direct tax decreased to 58% and that of salaries

tax increased to 36%. This sharply increased tax burden of salary earners istax increased to 36%. This sharply increased tax burden of salary earners istax increased to 36%. This sharply increased tax burden of salary earners istax increased to 36%. This sharply increased tax burden of salary earners is

unfortunately not the result of any significant increase in the share of labour incomeunfortunately not the result of any significant increase in the share of labour incomeunfortunately not the result of any significant increase in the share of labour incomeunfortunately not the result of any significant increase in the share of labour income

in GDP. In fact, in the past ten years, the percentage of compensation to employeesin GDP. In fact, in the past ten years, the percentage of compensation to employeesin GDP. In fact, in the past ten years, the percentage of compensation to employeesin GDP. In fact, in the past ten years, the percentage of compensation to employees

in total value added increased only marginally from 49% to 50%. Our percentage sharein total value added increased only marginally from 49% to 50%. Our percentage sharein total value added increased only marginally from 49% to 50%. Our percentage sharein total value added increased only marginally from 49% to 50%. Our percentage share

of compensation to employees is much lower than that in developed countries and inof compensation to employees is much lower than that in developed countries and inof compensation to employees is much lower than that in developed countries and inof compensation to employees is much lower than that in developed countries and in

many developing countries. This is another indication of lack of improvement in Hongmany developing countries. This is another indication of lack of improvement in Hongmany developing countries. This is another indication of lack of improvement in Hongmany developing countries. This is another indication of lack of improvement in Hong

Kong's income distribution over the past ten years. The major reason for the rapidlyKong's income distribution over the past ten years. The major reason for the rapidlyKong's income distribution over the past ten years. The major reason for the rapidlyKong's income distribution over the past ten years. The major reason for the rapidly

increased burden of salaries taxpayers is that under a high rate of inflation, salaryincreased burden of salaries taxpayers is that under a high rate of inflation, salaryincreased burden of salaries taxpayers is that under a high rate of inflation, salaryincreased burden of salaries taxpayers is that under a high rate of inflation, salary

earners are continuously being pushed into a higher tax band and as a result payingearners are continuously being pushed into a higher tax band and as a result payingearners are continuously being pushed into a higher tax band and as a result payingearners are continuously being pushed into a higher tax band and as a result paying

higher effective tax rates. For example, a single taxpayer earning $60,000 a yearhigher effective tax rates. For example, a single taxpayer earning $60,000 a yearhigher effective tax rates. For example, a single taxpayer earning $60,000 a yearhigher effective tax rates. For example, a single taxpayer earning $60,000 a year

in 1981-82 had to pay an effective tax rate of 5.7%. In 1992-93, he will have toin 1981-82 had to pay an effective tax rate of 5.7%. In 1992-93, he will have toin 1981-82 had to pay an effective tax rate of 5.7%. In 1992-93, he will have toin 1981-82 had to pay an effective tax rate of 5.7%. In 1992-93, he will have to

pay 12.9%, assuming that he has been getting a pay rise indexed to inflation.pay 12.9%, assuming that he has been getting a pay rise indexed to inflation.pay 12.9%, assuming that he has been getting a pay rise indexed to inflation.pay 12.9%, assuming that he has been getting a pay rise indexed to inflation.

Similarly, a single person earning $80,000 a year in 1981-82 paid an effective taxSimilarly, a single person earning $80,000 a year in 1981-82 paid an effective taxSimilarly, a single person earning $80,000 a year in 1981-82 paid an effective taxSimilarly, a single person earning $80,000 a year in 1981-82 paid an effective tax

rate of 10%, but he will have to pay an effective tax rate of 14.4% in 1992-93. Inrate of 10%, but he will have to pay an effective tax rate of 14.4% in 1992-93. Inrate of 10%, but he will have to pay an effective tax rate of 14.4% in 1992-93. Inrate of 10%, but he will have to pay an effective tax rate of 14.4% in 1992-93. In

general, the changes in tax allowances and tax bands have been able to offset thegeneral, the changes in tax allowances and tax bands have been able to offset thegeneral, the changes in tax allowances and tax bands have been able to offset thegeneral, the changes in tax allowances and tax bands have been able to offset the

effects of inflation for salaries taxpayers after 1986-87, but salaries taxpayerseffects of inflation for salaries taxpayers after 1986-87, but salaries taxpayerseffects of inflation for salaries taxpayers after 1986-87, but salaries taxpayerseffects of inflation for salaries taxpayers after 1986-87, but salaries taxpayers

lost out tremendously for the period 1981-82 to 1986-87 for which they have neverlost out tremendously for the period 1981-82 to 1986-87 for which they have neverlost out tremendously for the period 1981-82 to 1986-87 for which they have neverlost out tremendously for the period 1981-82 to 1986-87 for which they have never

been compensated. On the other hand, over all the years, irrespective of inflation,been compensated. On the other hand, over all the years, irrespective of inflation,been compensated. On the other hand, over all the years, irrespective of inflation,been compensated. On the other hand, over all the years, irrespective of inflation,

profit makers have been paying the prevailing proportional tax rate without any worryprofit makers have been paying the prevailing proportional tax rate without any worryprofit makers have been paying the prevailing proportional tax rate without any worryprofit makers have been paying the prevailing proportional tax rate without any worry

of being pushed into a higher tax band resulting in paying a higher effective taxof being pushed into a higher tax band resulting in paying a higher effective taxof being pushed into a higher tax band resulting in paying a higher effective taxof being pushed into a higher tax band resulting in paying a higher effective tax

rate. This is most inequitable and this explains why salary earners have beenrate. This is most inequitable and this explains why salary earners have beenrate. This is most inequitable and this explains why salary earners have beenrate. This is most inequitable and this explains why salary earners have been

contributing an increasing share of direct taxes relative to the profit makers. Itcontributing an increasing share of direct taxes relative to the profit makers. Itcontributing an increasing share of direct taxes relative to the profit makers. Itcontributing an increasing share of direct taxes relative to the profit makers. It

is therefore totally in line with the economic criteria of both vertical andis therefore totally in line with the economic criteria of both vertical andis therefore totally in line with the economic criteria of both vertical andis therefore totally in line with the economic criteria of both vertical and

horizontal equity for the Government to impose a 1% increase in profits tax this year.horizontal equity for the Government to impose a 1% increase in profits tax this year.horizontal equity for the Government to impose a 1% increase in profits tax this year.horizontal equity for the Government to impose a 1% increase in profits tax this year.

I cannot understand why businesses should complain. Many criticize the 1% increaseI cannot understand why businesses should complain. Many criticize the 1% increaseI cannot understand why businesses should complain. Many criticize the 1% increaseI cannot understand why businesses should complain. Many criticize the 1% increase

in profits tax and complain that this might indicate a trend of rising profits taxin profits tax and complain that this might indicate a trend of rising profits taxin profits tax and complain that this might indicate a trend of rising profits taxin profits tax and complain that this might indicate a trend of rising profits tax

rates. But, do they realize that salaries taxpayers have been suffering from a trendrates. But, do they realize that salaries taxpayers have been suffering from a trendrates. But, do they realize that salaries taxpayers have been suffering from a trendrates. But, do they realize that salaries taxpayers have been suffering from a trend

of sharply rising effective tax rates in the past ten years even without publicof sharply rising effective tax rates in the past ten years even without publicof sharply rising effective tax rates in the past ten years even without publicof sharply rising effective tax rates in the past ten years even without public

recognition? If there is a demand for an increase in government expenditure for arecognition? If there is a demand for an increase in government expenditure for arecognition? If there is a demand for an increase in government expenditure for arecognition? If there is a demand for an increase in government expenditure for a

good cause, why should the salary earners alone bear the burden?good cause, why should the salary earners alone bear the burden?good cause, why should the salary earners alone bear the burden?good cause, why should the salary earners alone bear the burden?

Speaking of equity, the Financial Secretary's proposal to increase rates is notSpeaking of equity, the Financial Secretary's proposal to increase rates is notSpeaking of equity, the Financial Secretary's proposal to increase rates is notSpeaking of equity, the Financial Secretary's proposal to increase rates is not

a wise move. Despite the fact that this is a proportional not a regressive tax ona wise move. Despite the fact that this is a proportional not a regressive tax ona wise move. Despite the fact that this is a proportional not a regressive tax ona wise move. Despite the fact that this is a proportional not a regressive tax on

all households, the impact on the livelihood of the general public is certainlyall households, the impact on the livelihood of the general public is certainlyall households, the impact on the livelihood of the general public is certainlyall households, the impact on the livelihood of the general public is certainly

tremendous. It is unfair to argue that rates in Hong Kong are low by internationaltremendous. It is unfair to argue that rates in Hong Kong are low by internationaltremendous. It is unfair to argue that rates in Hong Kong are low by internationaltremendous. It is unfair to argue that rates in Hong Kong are low by international

standards. The rentals paid by people in Hong Kong account for a higher percentagestandards. The rentals paid by people in Hong Kong account for a higher percentagestandards. The rentals paid by people in Hong Kong account for a higher percentagestandards. The rentals paid by people in Hong Kong account for a higher percentage

of total household expenditure than those in most other cities and countries. Also,of total household expenditure than those in most other cities and countries. Also,of total household expenditure than those in most other cities and countries. Also,of total household expenditure than those in most other cities and countries. Also,

the impact of rate increases on prices is perhaps not negligible if we also take intothe impact of rate increases on prices is perhaps not negligible if we also take intothe impact of rate increases on prices is perhaps not negligible if we also take intothe impact of rate increases on prices is perhaps not negligible if we also take into

consideration the secondary effects.consideration the secondary effects.consideration the secondary effects.consideration the secondary effects.

Mr Deputy President, like almost everybody else I have so far been commentingMr Deputy President, like almost everybody else I have so far been commentingMr Deputy President, like almost everybody else I have so far been commentingMr Deputy President, like almost everybody else I have so far been commenting

on the various aspects of the Budget in isolation. It is in fact important to viewon the various aspects of the Budget in isolation. It is in fact important to viewon the various aspects of the Budget in isolation. It is in fact important to viewon the various aspects of the Budget in isolation. It is in fact important to view

the Budget as a whole and as a package and, above all, as part of a long-term financialthe Budget as a whole and as a package and, above all, as part of a long-term financialthe Budget as a whole and as a package and, above all, as part of a long-term financialthe Budget as a whole and as a package and, above all, as part of a long-term financial

management strategy for Hong Kong's run-up to 1997 and beyond. If we ask themanagement strategy for Hong Kong's run-up to 1997 and beyond. If we ask themanagement strategy for Hong Kong's run-up to 1997 and beyond. If we ask themanagement strategy for Hong Kong's run-up to 1997 and beyond. If we ask the

Financial Secretary to make changes in bits and pieces, the underlying objectivesFinancial Secretary to make changes in bits and pieces, the underlying objectivesFinancial Secretary to make changes in bits and pieces, the underlying objectivesFinancial Secretary to make changes in bits and pieces, the underlying objectives

can no longer be upheld. For example, if the personal allowances are furthercan no longer be upheld. For example, if the personal allowances are furthercan no longer be upheld. For example, if the personal allowances are furthercan no longer be upheld. For example, if the personal allowances are further

increased and tax bands widened, the implications for revenue loss will go beyondincreased and tax bands widened, the implications for revenue loss will go beyondincreased and tax bands widened, the implications for revenue loss will go beyondincreased and tax bands widened, the implications for revenue loss will go beyond

a reduction in this year's surplus and will be extended to our entire financiala reduction in this year's surplus and will be extended to our entire financiala reduction in this year's surplus and will be extended to our entire financiala reduction in this year's surplus and will be extended to our entire financial

position in the run-up to 1997. We most note that our reserve balance as a percentageposition in the run-up to 1997. We most note that our reserve balance as a percentageposition in the run-up to 1997. We most note that our reserve balance as a percentageposition in the run-up to 1997. We most note that our reserve balance as a percentage

of government expenditure will decrease from 80% in 1992-93 to 38% in 1996-97. Theof government expenditure will decrease from 80% in 1992-93 to 38% in 1996-97. Theof government expenditure will decrease from 80% in 1992-93 to 38% in 1996-97. Theof government expenditure will decrease from 80% in 1992-93 to 38% in 1996-97. The

revenue loss due to further concessions must be compensated for by other fiscalrevenue loss due to further concessions must be compensated for by other fiscalrevenue loss due to further concessions must be compensated for by other fiscalrevenue loss due to further concessions must be compensated for by other fiscal

measures. It would not be possible for the Financial Secretary to do all these atmeasures. It would not be possible for the Financial Secretary to do all these atmeasures. It would not be possible for the Financial Secretary to do all these atmeasures. It would not be possible for the Financial Secretary to do all these at

this late stage for this fiscal year. Moreover, we must bear in mind that our economicthis late stage for this fiscal year. Moreover, we must bear in mind that our economicthis late stage for this fiscal year. Moreover, we must bear in mind that our economicthis late stage for this fiscal year. Moreover, we must bear in mind that our economic

growth has just begun to pick up. There are many uncertainties facing us, such asgrowth has just begun to pick up. There are many uncertainties facing us, such asgrowth has just begun to pick up. There are many uncertainties facing us, such asgrowth has just begun to pick up. There are many uncertainties facing us, such as

economic recovery in the English-speaking countries and China's MFN status. It seemseconomic recovery in the English-speaking countries and China's MFN status. It seemseconomic recovery in the English-speaking countries and China's MFN status. It seemseconomic recovery in the English-speaking countries and China's MFN status. It seems

reasonable for us to observe our economic changes for another year before we urgereasonable for us to observe our economic changes for another year before we urgereasonable for us to observe our economic changes for another year before we urgereasonable for us to observe our economic changes for another year before we urge

the Government to make significant changes to our fiscal system.the Government to make significant changes to our fiscal system.the Government to make significant changes to our fiscal system.the Government to make significant changes to our fiscal system.

Despite the commentsDespite the commentsDespite the commentsDespite the comments earlier in my speech and my view that not enough has been earlier in my speech and my view that not enough has been earlier in my speech and my view that not enough has been earlier in my speech and my view that not enough has been

done by the Financial Secretary to reduce the tax burden of the lower middle incomedone by the Financial Secretary to reduce the tax burden of the lower middle incomedone by the Financial Secretary to reduce the tax burden of the lower middle incomedone by the Financial Secretary to reduce the tax burden of the lower middle income

class, I think the Budget for this year can serve the purpose of bringing about someclass, I think the Budget for this year can serve the purpose of bringing about someclass, I think the Budget for this year can serve the purpose of bringing about someclass, I think the Budget for this year can serve the purpose of bringing about some

degree of macroeconomic stability to our economy and has taken a first step to reversedegree of macroeconomic stability to our economy and has taken a first step to reversedegree of macroeconomic stability to our economy and has taken a first step to reversedegree of macroeconomic stability to our economy and has taken a first step to reverse

the trend of an increasing tax burden on salary earners relative to profit makers.the trend of an increasing tax burden on salary earners relative to profit makers.the trend of an increasing tax burden on salary earners relative to profit makers.the trend of an increasing tax burden on salary earners relative to profit makers.

Most importantly, the Budget strategy fulfills the need of a sound financialMost importantly, the Budget strategy fulfills the need of a sound financialMost importantly, the Budget strategy fulfills the need of a sound financialMost importantly, the Budget strategy fulfills the need of a sound financial

management for Hong Kong towards the year 1997. On these bases, I support the motionmanagement for Hong Kong towards the year 1997. On these bases, I support the motionmanagement for Hong Kong towards the year 1997. On these bases, I support the motionmanagement for Hong Kong towards the year 1997. On these bases, I support the motion

and hope that the Financial Secretary will duly give more consideration to ourand hope that the Financial Secretary will duly give more consideration to ourand hope that the Financial Secretary will duly give more consideration to ourand hope that the Financial Secretary will duly give more consideration to our

long-term economic growth capacity and the question of equity in our taxation systemlong-term economic growth capacity and the question of equity in our taxation systemlong-term economic growth capacity and the question of equity in our taxation systemlong-term economic growth capacity and the question of equity in our taxation system

in his next Budget when our economy is in orbit for another period of sustained growth.in his next Budget when our economy is in orbit for another period of sustained growth.in his next Budget when our economy is in orbit for another period of sustained growth.in his next Budget when our economy is in orbit for another period of sustained growth.

MR MOSES CHENG: Mr Deputy President, in addressing this year's Budget, I want to goMR MOSES CHENG: Mr Deputy President, in addressing this year's Budget, I want to goMR MOSES CHENG: Mr Deputy President, in addressing this year's Budget, I want to goMR MOSES CHENG: Mr Deputy President, in addressing this year's Budget, I want to go

beyond the numeric calculations and statistics and address the underlying principlebeyond the numeric calculations and statistics and address the underlying principlebeyond the numeric calculations and statistics and address the underlying principlebeyond the numeric calculations and statistics and address the underlying principle

of commonsense that should act as parameters to the territory's budget process now,of commonsense that should act as parameters to the territory's budget process now,of commonsense that should act as parameters to the territory's budget process now,of commonsense that should act as parameters to the territory's budget process now,

and into the future. The ethical standard of good representative government thatand into the future. The ethical standard of good representative government thatand into the future. The ethical standard of good representative government thatand into the future. The ethical standard of good representative government that

I contend should be paramount is: That officials should manage public funds in a mannerI contend should be paramount is: That officials should manage public funds in a mannerI contend should be paramount is: That officials should manage public funds in a mannerI contend should be paramount is: That officials should manage public funds in a manner

consistent with the trust bestowed upon them by the public. This means that theconsistent with the trust bestowed upon them by the public. This means that theconsistent with the trust bestowed upon them by the public. This means that theconsistent with the trust bestowed upon them by the public. This means that the

Government should budget with responsibility and accountability and seek to maximizeGovernment should budget with responsibility and accountability and seek to maximizeGovernment should budget with responsibility and accountability and seek to maximizeGovernment should budget with responsibility and accountability and seek to maximize

public funds to offer benefits in the interests of long-term planning.public funds to offer benefits in the interests of long-term planning.public funds to offer benefits in the interests of long-term planning.public funds to offer benefits in the interests of long-term planning.

The Administration is to be congratulated to the extent it The Administration is to be congratulated to the extent it The Administration is to be congratulated to the extent it The Administration is to be congratulated to the extent it progresses towardsprogresses towardsprogresses towardsprogresses towards

these principles and refrains from unnecessary fee and tax increases that wouldthese principles and refrains from unnecessary fee and tax increases that wouldthese principles and refrains from unnecessary fee and tax increases that wouldthese principles and refrains from unnecessary fee and tax increases that would

further burden the territory citizens. Equally significant is whilst itsfurther burden the territory citizens. Equally significant is whilst itsfurther burden the territory citizens. Equally significant is whilst itsfurther burden the territory citizens. Equally significant is whilst its

counterparts in other parts of world have to work on deficit budgetting thecounterparts in other parts of world have to work on deficit budgetting thecounterparts in other parts of world have to work on deficit budgetting thecounterparts in other parts of world have to work on deficit budgetting the

Administration can start with a surplus of $14.1 billion for the last fiscal yearAdministration can start with a surplus of $14.1 billion for the last fiscal yearAdministration can start with a surplus of $14.1 billion for the last fiscal yearAdministration can start with a surplus of $14.1 billion for the last fiscal year

and plan for what the Financial Secretary described as a "comfortable cushion".and plan for what the Financial Secretary described as a "comfortable cushion".and plan for what the Financial Secretary described as a "comfortable cushion".and plan for what the Financial Secretary described as a "comfortable cushion".

Although the setting up of the Efficiency Unit within the Government clearlyAlthough the setting up of the Efficiency Unit within the Government clearlyAlthough the setting up of the Efficiency Unit within the Government clearlyAlthough the setting up of the Efficiency Unit within the Government clearly

indicates the intention of the Administration to improve productivity thus achievingindicates the intention of the Administration to improve productivity thus achievingindicates the intention of the Administration to improve productivity thus achievingindicates the intention of the Administration to improve productivity thus achieving

cost-saving, yet I must express my concern that this year's efforts to increasecost-saving, yet I must express my concern that this year's efforts to increasecost-saving, yet I must express my concern that this year's efforts to increasecost-saving, yet I must express my concern that this year's efforts to increase

efficiency are not fully consistent with long-range, comprehensive planning in someefficiency are not fully consistent with long-range, comprehensive planning in someefficiency are not fully consistent with long-range, comprehensive planning in someefficiency are not fully consistent with long-range, comprehensive planning in some

areas, while not going far enough in others. An especially glaring example is theareas, while not going far enough in others. An especially glaring example is theareas, while not going far enough in others. An especially glaring example is theareas, while not going far enough in others. An especially glaring example is the

Budget's approach to cutbacks in education which has the effect of raising the staffBudget's approach to cutbacks in education which has the effect of raising the staffBudget's approach to cutbacks in education which has the effect of raising the staffBudget's approach to cutbacks in education which has the effect of raising the staff

to student ratios in our schools. What price tag do we arbitrarily assign to ourto student ratios in our schools. What price tag do we arbitrarily assign to ourto student ratios in our schools. What price tag do we arbitrarily assign to ourto student ratios in our schools. What price tag do we arbitrarily assign to our

children's learning? Are we to begin a slide down the road where this ratio increaseschildren's learning? Are we to begin a slide down the road where this ratio increaseschildren's learning? Are we to begin a slide down the road where this ratio increaseschildren's learning? Are we to begin a slide down the road where this ratio increases

until classes are bulging and personal attention in educating our children is alluntil classes are bulging and personal attention in educating our children is alluntil classes are bulging and personal attention in educating our children is alluntil classes are bulging and personal attention in educating our children is all

but a memory. That we have begun to toy with fundamental foundation of our socialbut a memory. That we have begun to toy with fundamental foundation of our socialbut a memory. That we have begun to toy with fundamental foundation of our socialbut a memory. That we have begun to toy with fundamental foundation of our social

structure, rather than grappling with the root problems of bureaucratic modernization,structure, rather than grappling with the root problems of bureaucratic modernization,structure, rather than grappling with the root problems of bureaucratic modernization,structure, rather than grappling with the root problems of bureaucratic modernization,

seems to me a disturbing precedent.seems to me a disturbing precedent.seems to me a disturbing precedent.seems to me a disturbing precedent.

Instead of prescribing "band-aid" remedies from year to year, I urge theInstead of prescribing "band-aid" remedies from year to year, I urge theInstead of prescribing "band-aid" remedies from year to year, I urge theInstead of prescribing "band-aid" remedies from year to year, I urge the

Government to learn "preventative care" to keep Hong Kong finances healthy over theGovernment to learn "preventative care" to keep Hong Kong finances healthy over theGovernment to learn "preventative care" to keep Hong Kong finances healthy over theGovernment to learn "preventative care" to keep Hong Kong finances healthy over the

long term. Above all, this means that the Government as a whole must implement modernlong term. Above all, this means that the Government as a whole must implement modernlong term. Above all, this means that the Government as a whole must implement modernlong term. Above all, this means that the Government as a whole must implement modern

management techniques for increased efficiency and productivity of the Civil Servicemanagement techniques for increased efficiency and productivity of the Civil Servicemanagement techniques for increased efficiency and productivity of the Civil Servicemanagement techniques for increased efficiency and productivity of the Civil Service

and public institutions alike. Hong Kong is simply too modern in its technology andand public institutions alike. Hong Kong is simply too modern in its technology andand public institutions alike. Hong Kong is simply too modern in its technology andand public institutions alike. Hong Kong is simply too modern in its technology and

techniques to accept lesser standards for the public sector; and we are small enoughtechniques to accept lesser standards for the public sector; and we are small enoughtechniques to accept lesser standards for the public sector; and we are small enoughtechniques to accept lesser standards for the public sector; and we are small enough

to reject a lethargic or entrenched, cumbersome bureaucracy outright. We, therefore,to reject a lethargic or entrenched, cumbersome bureaucracy outright. We, therefore,to reject a lethargic or entrenched, cumbersome bureaucracy outright. We, therefore,to reject a lethargic or entrenched, cumbersome bureaucracy outright. We, therefore,

have the good fortune of being able to attack inefficiency and waste as unacceptablehave the good fortune of being able to attack inefficiency and waste as unacceptablehave the good fortune of being able to attack inefficiency and waste as unacceptablehave the good fortune of being able to attack inefficiency and waste as unacceptable

by-products of public expenditure -- we need only demonstrate the will to do so andby-products of public expenditure -- we need only demonstrate the will to do so andby-products of public expenditure -- we need only demonstrate the will to do so andby-products of public expenditure -- we need only demonstrate the will to do so and

act on it. This means that a new commitment to curb excess and contain spending shouldact on it. This means that a new commitment to curb excess and contain spending shouldact on it. This means that a new commitment to curb excess and contain spending shouldact on it. This means that a new commitment to curb excess and contain spending should

be pledged and enforced through all layers of management -- not only the upper echelons.be pledged and enforced through all layers of management -- not only the upper echelons.be pledged and enforced through all layers of management -- not only the upper echelons.be pledged and enforced through all layers of management -- not only the upper echelons.

A criterion of merit in public service should be the responsible and efficientA criterion of merit in public service should be the responsible and efficientA criterion of merit in public service should be the responsible and efficientA criterion of merit in public service should be the responsible and efficient

management of public funds, and training should emphasize dedication to themanagement of public funds, and training should emphasize dedication to themanagement of public funds, and training should emphasize dedication to themanagement of public funds, and training should emphasize dedication to the

principles of running a tight ship.principles of running a tight ship.principles of running a tight ship.principles of running a tight ship.

In the Judiciary, there is a woeful inadequacy of basic tools of modern In the Judiciary, there is a woeful inadequacy of basic tools of modern In the Judiciary, there is a woeful inadequacy of basic tools of modern In the Judiciary, there is a woeful inadequacy of basic tools of modern management,management,management,management,

and consequently, a lack of professional drive towards streamlined operation. I haveand consequently, a lack of professional drive towards streamlined operation. I haveand consequently, a lack of professional drive towards streamlined operation. I haveand consequently, a lack of professional drive towards streamlined operation. I have

the least intention to question the hard work of our judges for whom I have the greatestthe least intention to question the hard work of our judges for whom I have the greatestthe least intention to question the hard work of our judges for whom I have the greatestthe least intention to question the hard work of our judges for whom I have the greatest

respect. But my deep concern is the adequacy or the inadequacy to the administrativerespect. But my deep concern is the adequacy or the inadequacy to the administrativerespect. But my deep concern is the adequacy or the inadequacy to the administrativerespect. But my deep concern is the adequacy or the inadequacy to the administrative

system within the Judiciary which inevitably would hamper the work of our judges andsystem within the Judiciary which inevitably would hamper the work of our judges andsystem within the Judiciary which inevitably would hamper the work of our judges andsystem within the Judiciary which inevitably would hamper the work of our judges and

the efficient performance of our court system. Even as management consultants arethe efficient performance of our court system. Even as management consultants arethe efficient performance of our court system. Even as management consultants arethe efficient performance of our court system. Even as management consultants are

being paid handsome fees to perform a study on the system, there exists a virtualbeing paid handsome fees to perform a study on the system, there exists a virtualbeing paid handsome fees to perform a study on the system, there exists a virtualbeing paid handsome fees to perform a study on the system, there exists a virtual

vacuum of data and statistics to gauge the Judiciary's performance. We must be ablevacuum of data and statistics to gauge the Judiciary's performance. We must be ablevacuum of data and statistics to gauge the Judiciary's performance. We must be ablevacuum of data and statistics to gauge the Judiciary's performance. We must be able

to measure and monitor the public sector's work in order to know where and how toto measure and monitor the public sector's work in order to know where and how toto measure and monitor the public sector's work in order to know where and how toto measure and monitor the public sector's work in order to know where and how to

improve. It is our duty to the taxpayer of today, and future generations, to be ableimprove. It is our duty to the taxpayer of today, and future generations, to be ableimprove. It is our duty to the taxpayer of today, and future generations, to be ableimprove. It is our duty to the taxpayer of today, and future generations, to be able

to claim "your hard-earned dollar is being maximized to the best of the Government'sto claim "your hard-earned dollar is being maximized to the best of the Government'sto claim "your hard-earned dollar is being maximized to the best of the Government'sto claim "your hard-earned dollar is being maximized to the best of the Government's

ability". I am fearful that such a claim today could not be made in complete honesty.ability". I am fearful that such a claim today could not be made in complete honesty.ability". I am fearful that such a claim today could not be made in complete honesty.ability". I am fearful that such a claim today could not be made in complete honesty.

The issue of localization in the Administration, especially the Judiciary anThe issue of localization in the Administration, especially the Judiciary anThe issue of localization in the Administration, especially the Judiciary anThe issue of localization in the Administration, especially the Judiciary andddd

the Legal Department, is another area which warrants our concern as we draw closerthe Legal Department, is another area which warrants our concern as we draw closerthe Legal Department, is another area which warrants our concern as we draw closerthe Legal Department, is another area which warrants our concern as we draw closer

to 1997. I question the Administration's dedication in addressing the real andto 1997. I question the Administration's dedication in addressing the real andto 1997. I question the Administration's dedication in addressing the real andto 1997. I question the Administration's dedication in addressing the real and

fundamental factors affecting the effectiveness of its localization programme. Onefundamental factors affecting the effectiveness of its localization programme. Onefundamental factors affecting the effectiveness of its localization programme. Onefundamental factors affecting the effectiveness of its localization programme. One

obvious example is the failure to deploy reasonable resources for the establishmentobvious example is the failure to deploy reasonable resources for the establishmentobvious example is the failure to deploy reasonable resources for the establishmentobvious example is the failure to deploy reasonable resources for the establishment

of training posts within the Legal Department for the professional staff; lawof training posts within the Legal Department for the professional staff; lawof training posts within the Legal Department for the professional staff; lawof training posts within the Legal Department for the professional staff; law

graduates cannot qualify as lawyers without completing the required on-the-jobgraduates cannot qualify as lawyers without completing the required on-the-jobgraduates cannot qualify as lawyers without completing the required on-the-jobgraduates cannot qualify as lawyers without completing the required on-the-job

training known as articleship or pupilage. Past experience clearly indicates thattraining known as articleship or pupilage. Past experience clearly indicates thattraining known as articleship or pupilage. Past experience clearly indicates thattraining known as articleship or pupilage. Past experience clearly indicates that

candidates trained in the private sector would unlikely be considering joining thecandidates trained in the private sector would unlikely be considering joining thecandidates trained in the private sector would unlikely be considering joining thecandidates trained in the private sector would unlikely be considering joining the

Civil Service after admission.Civil Service after admission.Civil Service after admission.Civil Service after admission.

In advocating a more stringent dedication to modernized management and increaseIn advocating a more stringent dedication to modernized management and increaseIn advocating a more stringent dedication to modernized management and increaseIn advocating a more stringent dedication to modernized management and increasedddd

efficiency, allow me to say explicitly what is implicit in that objective. I do notefficiency, allow me to say explicitly what is implicit in that objective. I do notefficiency, allow me to say explicitly what is implicit in that objective. I do notefficiency, allow me to say explicitly what is implicit in that objective. I do not

believe in "the quick fix" or short-sighted visions of temporary solutions. In thisbelieve in "the quick fix" or short-sighted visions of temporary solutions. In thisbelieve in "the quick fix" or short-sighted visions of temporary solutions. In thisbelieve in "the quick fix" or short-sighted visions of temporary solutions. In this

vein, I must voice opposition to the fashionable and all-too-easy inclination towardsvein, I must voice opposition to the fashionable and all-too-easy inclination towardsvein, I must voice opposition to the fashionable and all-too-easy inclination towardsvein, I must voice opposition to the fashionable and all-too-easy inclination towards

fee increases. The last time the Government sought to "patch" the traffic problemfee increases. The last time the Government sought to "patch" the traffic problemfee increases. The last time the Government sought to "patch" the traffic problemfee increases. The last time the Government sought to "patch" the traffic problem

in the Cross Harbour Tunnel with a fee increase, the impact only lasted for aboutin the Cross Harbour Tunnel with a fee increase, the impact only lasted for aboutin the Cross Harbour Tunnel with a fee increase, the impact only lasted for aboutin the Cross Harbour Tunnel with a fee increase, the impact only lasted for about

one year when the problem resurfaced again. The only net change to the situationone year when the problem resurfaced again. The only net change to the situationone year when the problem resurfaced again. The only net change to the situationone year when the problem resurfaced again. The only net change to the situation

at all was a probable negative effect on inflation and cost of living. As we nowat all was a probable negative effect on inflation and cost of living. As we nowat all was a probable negative effect on inflation and cost of living. As we nowat all was a probable negative effect on inflation and cost of living. As we now

approach this unresolved problem again, and others alike, let us strive to beapproach this unresolved problem again, and others alike, let us strive to beapproach this unresolved problem again, and others alike, let us strive to beapproach this unresolved problem again, and others alike, let us strive to be

innovative and generate solutions that solve problems for the long term. If we mustinnovative and generate solutions that solve problems for the long term. If we mustinnovative and generate solutions that solve problems for the long term. If we mustinnovative and generate solutions that solve problems for the long term. If we must

work against fee schedules, we must target specific goals, such as reducing the amountwork against fee schedules, we must target specific goals, such as reducing the amountwork against fee schedules, we must target specific goals, such as reducing the amountwork against fee schedules, we must target specific goals, such as reducing the amount

of single passenger and non-commercial automobiles clogging certain routes. We shouldof single passenger and non-commercial automobiles clogging certain routes. We shouldof single passenger and non-commercial automobiles clogging certain routes. We shouldof single passenger and non-commercial automobiles clogging certain routes. We should

strive to offer citizens incentives for innovative alternatives like people in thestrive to offer citizens incentives for innovative alternatives like people in thestrive to offer citizens incentives for innovative alternatives like people in thestrive to offer citizens incentives for innovative alternatives like people in the

same office going to work in shared facility, and adequate deterrents to thosesame office going to work in shared facility, and adequate deterrents to thosesame office going to work in shared facility, and adequate deterrents to thosesame office going to work in shared facility, and adequate deterrents to those

contributing to this problem further. Anyone can attempt solutions by throwing moneycontributing to this problem further. Anyone can attempt solutions by throwing moneycontributing to this problem further. Anyone can attempt solutions by throwing moneycontributing to this problem further. Anyone can attempt solutions by throwing money

at problems; it takes leadership to innovate and implement responsible, comprehensiveat problems; it takes leadership to innovate and implement responsible, comprehensiveat problems; it takes leadership to innovate and implement responsible, comprehensiveat problems; it takes leadership to innovate and implement responsible, comprehensive

solutions, and that is the hallmark by which I want this Legislative Council and oursolutions, and that is the hallmark by which I want this Legislative Council and oursolutions, and that is the hallmark by which I want this Legislative Council and oursolutions, and that is the hallmark by which I want this Legislative Council and our

Government to be known.Government to be known.Government to be known.Government to be known.

My concern is that this Budget does not express that concept to its fullestMy concern is that this Budget does not express that concept to its fullestMy concern is that this Budget does not express that concept to its fullestMy concern is that this Budget does not express that concept to its fullest

potential, and while some of its prudence is pleasing, I cannot find satisfactionpotential, and while some of its prudence is pleasing, I cannot find satisfactionpotential, and while some of its prudence is pleasing, I cannot find satisfactionpotential, and while some of its prudence is pleasing, I cannot find satisfaction

with its suggestive solutions. The morale of our young men and women in policewith its suggestive solutions. The morale of our young men and women in policewith its suggestive solutions. The morale of our young men and women in policewith its suggestive solutions. The morale of our young men and women in police

uniform is alarmingly low. Are we asserting leadership worthy of inspiring them?uniform is alarmingly low. Are we asserting leadership worthy of inspiring them?uniform is alarmingly low. Are we asserting leadership worthy of inspiring them?uniform is alarmingly low. Are we asserting leadership worthy of inspiring them?

They must have a government that they believe is dedicated to modernizing the force,They must have a government that they believe is dedicated to modernizing the force,They must have a government that they believe is dedicated to modernizing the force,They must have a government that they believe is dedicated to modernizing the force,

improving their equipment, and supporting them fully with strategic planning andimproving their equipment, and supporting them fully with strategic planning andimproving their equipment, and supporting them fully with strategic planning andimproving their equipment, and supporting them fully with strategic planning and

objectives. Could they be indicative of our teachers with increased burdens? Orobjectives. Could they be indicative of our teachers with increased burdens? Orobjectives. Could they be indicative of our teachers with increased burdens? Orobjectives. Could they be indicative of our teachers with increased burdens? Or

is the Civil Service under top-heavy bureaucracy? Let us instill pride in the heartsis the Civil Service under top-heavy bureaucracy? Let us instill pride in the heartsis the Civil Service under top-heavy bureaucracy? Let us instill pride in the heartsis the Civil Service under top-heavy bureaucracy? Let us instill pride in the hearts

of those who dedicate themselves to serving the public that the institutions theyof those who dedicate themselves to serving the public that the institutions theyof those who dedicate themselves to serving the public that the institutions theyof those who dedicate themselves to serving the public that the institutions they

serve are measured against the highest standards. In doing so we will be betterserve are measured against the highest standards. In doing so we will be betterserve are measured against the highest standards. In doing so we will be betterserve are measured against the highest standards. In doing so we will be better

fulfilling our duty as responsible legislators.fulfilling our duty as responsible legislators.fulfilling our duty as responsible legislators.fulfilling our duty as responsible legislators.

Finally, let me reaffirm what many of my colleagues of the Co-operativeFinally, let me reaffirm what many of my colleagues of the Co-operativeFinally, let me reaffirm what many of my colleagues of the Co-operativeFinally, let me reaffirm what many of my colleagues of the Co-operative Resources Resources Resources Resources

Centre have already stated so eloquently. I am committed to tax relief for the middleCentre have already stated so eloquently. I am committed to tax relief for the middleCentre have already stated so eloquently. I am committed to tax relief for the middleCentre have already stated so eloquently. I am committed to tax relief for the middle

income group through a greater personal allowance, widening the tax band from $20,000income group through a greater personal allowance, widening the tax band from $20,000income group through a greater personal allowance, widening the tax band from $20,000income group through a greater personal allowance, widening the tax band from $20,000

to $30,000 and a new moratorium on rate increases. The Financial Secretary predictedto $30,000 and a new moratorium on rate increases. The Financial Secretary predictedto $30,000 and a new moratorium on rate increases. The Financial Secretary predictedto $30,000 and a new moratorium on rate increases. The Financial Secretary predicted

the inevitability of continued high inflation but does not wholly account forthe inevitability of continued high inflation but does not wholly account forthe inevitability of continued high inflation but does not wholly account forthe inevitability of continued high inflation but does not wholly account for

inflation's regressive effects on middle class income earners. As a result, peopleinflation's regressive effects on middle class income earners. As a result, peopleinflation's regressive effects on middle class income earners. As a result, peopleinflation's regressive effects on middle class income earners. As a result, people

are being crunched between a rock and a hard place -- the Government's increases andare being crunched between a rock and a hard place -- the Government's increases andare being crunched between a rock and a hard place -- the Government's increases andare being crunched between a rock and a hard place -- the Government's increases and

inflationary pressure. This considerable segment of the population deserves the sameinflationary pressure. This considerable segment of the population deserves the sameinflationary pressure. This considerable segment of the population deserves the sameinflationary pressure. This considerable segment of the population deserves the same

fair treatment as others, and I believe that we should not abandon their disposition.fair treatment as others, and I believe that we should not abandon their disposition.fair treatment as others, and I believe that we should not abandon their disposition.fair treatment as others, and I believe that we should not abandon their disposition.

While we press the case for no rate increase, it should be evident that increasesWhile we press the case for no rate increase, it should be evident that increasesWhile we press the case for no rate increase, it should be evident that increasesWhile we press the case for no rate increase, it should be evident that increases

of more than 25% cannot be justified in light of the people's present burdens.of more than 25% cannot be justified in light of the people's present burdens.of more than 25% cannot be justified in light of the people's present burdens.of more than 25% cannot be justified in light of the people's present burdens.

In illustrating my concerns over the present Budget, I hope I have made clearIn illustrating my concerns over the present Budget, I hope I have made clearIn illustrating my concerns over the present Budget, I hope I have made clearIn illustrating my concerns over the present Budget, I hope I have made clear

my standards for this and future Budgets. As individuals we are responsible andmy standards for this and future Budgets. As individuals we are responsible andmy standards for this and future Budgets. As individuals we are responsible andmy standards for this and future Budgets. As individuals we are responsible and

accountable to those that finance us; as a government we should hold the same, ifaccountable to those that finance us; as a government we should hold the same, ifaccountable to those that finance us; as a government we should hold the same, ifaccountable to those that finance us; as a government we should hold the same, if

not more strict, allegiance to those that finance our existence -- the citizens ofnot more strict, allegiance to those that finance our existence -- the citizens ofnot more strict, allegiance to those that finance our existence -- the citizens ofnot more strict, allegiance to those that finance our existence -- the citizens of

Hong Kong. We must utilize the tools of modern management that work to eliminateHong Kong. We must utilize the tools of modern management that work to eliminateHong Kong. We must utilize the tools of modern management that work to eliminateHong Kong. We must utilize the tools of modern management that work to eliminate

waste and excess, while preserving merit and morale to the benefit of our society.waste and excess, while preserving merit and morale to the benefit of our society.waste and excess, while preserving merit and morale to the benefit of our society.waste and excess, while preserving merit and morale to the benefit of our society.

I urge the Government to act on those principles of commonsense, and with theI urge the Government to act on those principles of commonsense, and with theI urge the Government to act on those principles of commonsense, and with theI urge the Government to act on those principles of commonsense, and with the

co-operation of this Council, provide the energy and innovation of active leadershipco-operation of this Council, provide the energy and innovation of active leadershipco-operation of this Council, provide the energy and innovation of active leadershipco-operation of this Council, provide the energy and innovation of active leadership

to inspire confidence in long-term solutions.to inspire confidence in long-term solutions.to inspire confidence in long-term solutions.to inspire confidence in long-term solutions.

Thank you.Thank you.Thank you.Thank you.

MR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy President, two of the much-resentedMR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy President, two of the much-resentedMR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy President, two of the much-resentedMR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy President, two of the much-resented

aspects of this year's Budget, namely, the proposed cuts in basic education spendingaspects of this year's Budget, namely, the proposed cuts in basic education spendingaspects of this year's Budget, namely, the proposed cuts in basic education spendingaspects of this year's Budget, namely, the proposed cuts in basic education spending

and the tax and living burden on the sandwich class, have something to do with theand the tax and living burden on the sandwich class, have something to do with theand the tax and living burden on the sandwich class, have something to do with theand the tax and living burden on the sandwich class, have something to do with the

education constituency which I represent. Therefore, my speech will reflect theeducation constituency which I represent. Therefore, my speech will reflect theeducation constituency which I represent. Therefore, my speech will reflect theeducation constituency which I represent. Therefore, my speech will reflect the

views of educational workers at the grassroots level as well as those of the sandwichviews of educational workers at the grassroots level as well as those of the sandwichviews of educational workers at the grassroots level as well as those of the sandwichviews of educational workers at the grassroots level as well as those of the sandwich

class they represent.class they represent.class they represent.class they represent.

In this year's Budget, the Government has obIn this year's Budget, the Government has obIn this year's Budget, the Government has obIn this year's Budget, the Government has obviously ignored basic education, thatviously ignored basic education, thatviously ignored basic education, thatviously ignored basic education, that

is, primary and secondary education, kindergarten and teacher education. In hisis, primary and secondary education, kindergarten and teacher education. In hisis, primary and secondary education, kindergarten and teacher education. In hisis, primary and secondary education, kindergarten and teacher education. In his

speech, the Financial Secretary has been complacent over the rapid expansion inspeech, the Financial Secretary has been complacent over the rapid expansion inspeech, the Financial Secretary has been complacent over the rapid expansion inspeech, the Financial Secretary has been complacent over the rapid expansion in

tertiary education, but has only made a bare mention of basic education. He simplytertiary education, but has only made a bare mention of basic education. He simplytertiary education, but has only made a bare mention of basic education. He simplytertiary education, but has only made a bare mention of basic education. He simply

indicates that further improvement is needed. He has made no concrete pledges orindicates that further improvement is needed. He has made no concrete pledges orindicates that further improvement is needed. He has made no concrete pledges orindicates that further improvement is needed. He has made no concrete pledges or

indications that he is genuinely concerned and attaches importance to the issue.indications that he is genuinely concerned and attaches importance to the issue.indications that he is genuinely concerned and attaches importance to the issue.indications that he is genuinely concerned and attaches importance to the issue.

This trend is most evident in this year's expenditure proposals.This trend is most evident in this year's expenditure proposals.This trend is most evident in this year's expenditure proposals.This trend is most evident in this year's expenditure proposals.

While the growth in expenditure for the tertiary education sector is 18.5%,While the growth in expenditure for the tertiary education sector is 18.5%,While the growth in expenditure for the tertiary education sector is 18.5%,While the growth in expenditure for the tertiary education sector is 18.5%,

kindergarten, primary and teacher education are experiencing negative growth, whichkindergarten, primary and teacher education are experiencing negative growth, whichkindergarten, primary and teacher education are experiencing negative growth, whichkindergarten, primary and teacher education are experiencing negative growth, which

means our students and our education will have lean times ahead. Even in themeans our students and our education will have lean times ahead. Even in themeans our students and our education will have lean times ahead. Even in themeans our students and our education will have lean times ahead. Even in the

secondary schooling sector, the 3.1% growth cannot keep up with the rate of inflationsecondary schooling sector, the 3.1% growth cannot keep up with the rate of inflationsecondary schooling sector, the 3.1% growth cannot keep up with the rate of inflationsecondary schooling sector, the 3.1% growth cannot keep up with the rate of inflation

and economic growth. Worse still, a large part of this meagre increase will be putand economic growth. Worse still, a large part of this meagre increase will be putand economic growth. Worse still, a large part of this meagre increase will be putand economic growth. Worse still, a large part of this meagre increase will be put

aside for the expansion of matriculation courses and for the supply of moreaside for the expansion of matriculation courses and for the supply of moreaside for the expansion of matriculation courses and for the supply of moreaside for the expansion of matriculation courses and for the supply of more

matriculants in order to solve the problem of under-enrolment in local universities.matriculants in order to solve the problem of under-enrolment in local universities.matriculants in order to solve the problem of under-enrolment in local universities.matriculants in order to solve the problem of under-enrolment in local universities.

In this year's budgetary proposals, basic education has been neglected, slashed andIn this year's budgetary proposals, basic education has been neglected, slashed andIn this year's budgetary proposals, basic education has been neglected, slashed andIn this year's budgetary proposals, basic education has been neglected, slashed and

allowed to be trampled upon. This has aroused the strong indignation of all theallowed to be trampled upon. This has aroused the strong indignation of all theallowed to be trampled upon. This has aroused the strong indignation of all theallowed to be trampled upon. This has aroused the strong indignation of all the

already bitterly disappointed educational workers at the basic level.already bitterly disappointed educational workers at the basic level.already bitterly disappointed educational workers at the basic level.already bitterly disappointed educational workers at the basic level.

What is more infuriating is that the Government has proposed to cut back on basicWhat is more infuriating is that the Government has proposed to cut back on basicWhat is more infuriating is that the Government has proposed to cut back on basicWhat is more infuriating is that the Government has proposed to cut back on basic

education spending in the face of huge surpluses and reserves. With this year'seducation spending in the face of huge surpluses and reserves. With this year'seducation spending in the face of huge surpluses and reserves. With this year'seducation spending in the face of huge surpluses and reserves. With this year's

Budget surplus and reserves standing at $14.1 billion and $92 billion respectively,Budget surplus and reserves standing at $14.1 billion and $92 billion respectively,Budget surplus and reserves standing at $14.1 billion and $92 billion respectively,Budget surplus and reserves standing at $14.1 billion and $92 billion respectively,

the stable and healthy state of our economy does not justify any attempt to make socialthe stable and healthy state of our economy does not justify any attempt to make socialthe stable and healthy state of our economy does not justify any attempt to make socialthe stable and healthy state of our economy does not justify any attempt to make social

welfare and basic education which are the most essential community services the firstwelfare and basic education which are the most essential community services the firstwelfare and basic education which are the most essential community services the firstwelfare and basic education which are the most essential community services the first

target of a cutback even if the Government needs to make provisions for the new airporttarget of a cutback even if the Government needs to make provisions for the new airporttarget of a cutback even if the Government needs to make provisions for the new airporttarget of a cutback even if the Government needs to make provisions for the new airport

project and reserve balances for the SAR Government. The Government's recentproject and reserve balances for the SAR Government. The Government's recentproject and reserve balances for the SAR Government. The Government's recentproject and reserve balances for the SAR Government. The Government's recent

mandatory move to reduce the number of classes and expand class sizes in primary andmandatory move to reduce the number of classes and expand class sizes in primary andmandatory move to reduce the number of classes and expand class sizes in primary andmandatory move to reduce the number of classes and expand class sizes in primary and

secondary schools in an attempt to curtail basic education spending has aroused thesecondary schools in an attempt to curtail basic education spending has aroused thesecondary schools in an attempt to curtail basic education spending has aroused thesecondary schools in an attempt to curtail basic education spending has aroused the

indignation and resistance of the education sector. As the proposed cutbackindignation and resistance of the education sector. As the proposed cutbackindignation and resistance of the education sector. As the proposed cutbackindignation and resistance of the education sector. As the proposed cutback

represents no more than $54 million, it is most stupid and lacking in foresight torepresents no more than $54 million, it is most stupid and lacking in foresight torepresents no more than $54 million, it is most stupid and lacking in foresight torepresents no more than $54 million, it is most stupid and lacking in foresight to

cause damage to the students, teachers and our education and to arouse unnecessarycause damage to the students, teachers and our education and to arouse unnecessarycause damage to the students, teachers and our education and to arouse unnecessarycause damage to the students, teachers and our education and to arouse unnecessary

social antagonism just for the sake of such a trivial amount. Here, may I requestsocial antagonism just for the sake of such a trivial amount. Here, may I requestsocial antagonism just for the sake of such a trivial amount. Here, may I requestsocial antagonism just for the sake of such a trivial amount. Here, may I request

the Government to withdraw its proposal to curtail basic education so as not to turnthe Government to withdraw its proposal to curtail basic education so as not to turnthe Government to withdraw its proposal to curtail basic education so as not to turnthe Government to withdraw its proposal to curtail basic education so as not to turn

confrontation into a crisis, and may I also urge the Executive Council to reconsiderconfrontation into a crisis, and may I also urge the Executive Council to reconsiderconfrontation into a crisis, and may I also urge the Executive Council to reconsiderconfrontation into a crisis, and may I also urge the Executive Council to reconsider

the matter.the matter.the matter.the matter.

The Government yesterday announced that the measure to reduce the number ofThe Government yesterday announced that the measure to reduce the number ofThe Government yesterday announced that the measure to reduce the number ofThe Government yesterday announced that the measure to reduce the number of

classes and increase class sizes would not be applied to Form IV classes. While noclasses and increase class sizes would not be applied to Form IV classes. While noclasses and increase class sizes would not be applied to Form IV classes. While noclasses and increase class sizes would not be applied to Form IV classes. While no

concrete proposals were made, it nevertheless promised to seek extra funds to improveconcrete proposals were made, it nevertheless promised to seek extra funds to improveconcrete proposals were made, it nevertheless promised to seek extra funds to improveconcrete proposals were made, it nevertheless promised to seek extra funds to improve

the quality of basic education. This has been looked upon by some, especially thosethe quality of basic education. This has been looked upon by some, especially thosethe quality of basic education. This has been looked upon by some, especially thosethe quality of basic education. This has been looked upon by some, especially those

from outside the education circles, as a victory. Yet I do not see this as a victory,from outside the education circles, as a victory. Yet I do not see this as a victory,from outside the education circles, as a victory. Yet I do not see this as a victory,from outside the education circles, as a victory. Yet I do not see this as a victory,

but just the beginning of our cause. This is because while Form IV classes will bebut just the beginning of our cause. This is because while Form IV classes will bebut just the beginning of our cause. This is because while Form IV classes will bebut just the beginning of our cause. This is because while Form IV classes will be

exempted, the scheme will still apply to Primary I and Form I classes where ourexempted, the scheme will still apply to Primary I and Form I classes where ourexempted, the scheme will still apply to Primary I and Form I classes where ourexempted, the scheme will still apply to Primary I and Form I classes where our

students are still very young and do not know how to safeguard their own rights. Beingstudents are still very young and do not know how to safeguard their own rights. Beingstudents are still very young and do not know how to safeguard their own rights. Beingstudents are still very young and do not know how to safeguard their own rights. Being

educational workers, we have a duty to improve the quality of their education.educational workers, we have a duty to improve the quality of their education.educational workers, we have a duty to improve the quality of their education.educational workers, we have a duty to improve the quality of their education.

Honourable colleagues, please listen to my views. There are indeed many areas inHonourable colleagues, please listen to my views. There are indeed many areas inHonourable colleagues, please listen to my views. There are indeed many areas inHonourable colleagues, please listen to my views. There are indeed many areas in

our basic education where improvements are needed. For example, kindergartenour basic education where improvements are needed. For example, kindergartenour basic education where improvements are needed. For example, kindergartenour basic education where improvements are needed. For example, kindergarten

teachers' remuneration should be directly subsidized as over 60% of them are stillteachers' remuneration should be directly subsidized as over 60% of them are stillteachers' remuneration should be directly subsidized as over 60% of them are stillteachers' remuneration should be directly subsidized as over 60% of them are still

receiving lower pay than that stipulated by the Government; there should be more staffreceiving lower pay than that stipulated by the Government; there should be more staffreceiving lower pay than that stipulated by the Government; there should be more staffreceiving lower pay than that stipulated by the Government; there should be more staff

for primary schools so that whole-day schooling can be achieved; floating classesfor primary schools so that whole-day schooling can be achieved; floating classesfor primary schools so that whole-day schooling can be achieved; floating classesfor primary schools so that whole-day schooling can be achieved; floating classes

in secondary schools should be abolished so that students can have their ownin secondary schools should be abolished so that students can have their ownin secondary schools should be abolished so that students can have their ownin secondary schools should be abolished so that students can have their own

classrooms; more resources should be allocated to colleges of education so that theyclassrooms; more resources should be allocated to colleges of education so that theyclassrooms; more resources should be allocated to colleges of education so that theyclassrooms; more resources should be allocated to colleges of education so that they

will no longer look like old-fashioned middle schools. These improvement measureswill no longer look like old-fashioned middle schools. These improvement measureswill no longer look like old-fashioned middle schools. These improvement measureswill no longer look like old-fashioned middle schools. These improvement measures

and expectations are all for the good of the students. The campaign now beingand expectations are all for the good of the students. The campaign now beingand expectations are all for the good of the students. The campaign now beingand expectations are all for the good of the students. The campaign now being

launched for improving the quality of basic education should not and will not comelaunched for improving the quality of basic education should not and will not comelaunched for improving the quality of basic education should not and will not comelaunched for improving the quality of basic education should not and will not come

to a halt just because the Government has promised to make a partial improvement.to a halt just because the Government has promised to make a partial improvement.to a halt just because the Government has promised to make a partial improvement.to a halt just because the Government has promised to make a partial improvement.

Otherwise, we will let our students down and have an uneasy conscience over education.Otherwise, we will let our students down and have an uneasy conscience over education.Otherwise, we will let our students down and have an uneasy conscience over education.Otherwise, we will let our students down and have an uneasy conscience over education.

Here, I hope honourable colleagues in this Council, and those who are also ExecutiveHere, I hope honourable colleagues in this Council, and those who are also ExecutiveHere, I hope honourable colleagues in this Council, and those who are also ExecutiveHere, I hope honourable colleagues in this Council, and those who are also Executive

Councillors in particular, to give their support to the education sector and makeCouncillors in particular, to give their support to the education sector and makeCouncillors in particular, to give their support to the education sector and makeCouncillors in particular, to give their support to the education sector and make

unremitting efforts in fighting for improvements in the interests of students. Theyunremitting efforts in fighting for improvements in the interests of students. Theyunremitting efforts in fighting for improvements in the interests of students. Theyunremitting efforts in fighting for improvements in the interests of students. They

should make no concessions simply because some success has been achieved.should make no concessions simply because some success has been achieved.should make no concessions simply because some success has been achieved.should make no concessions simply because some success has been achieved.

Mr Deputy President, the salaries tax is one item in this year's Budget that isMr Deputy President, the salaries tax is one item in this year's Budget that isMr Deputy President, the salaries tax is one item in this year's Budget that isMr Deputy President, the salaries tax is one item in this year's Budget that is

closely bound up with the broad ranks of wage-earners. Under the existing salariesclosely bound up with the broad ranks of wage-earners. Under the existing salariesclosely bound up with the broad ranks of wage-earners. Under the existing salariesclosely bound up with the broad ranks of wage-earners. Under the existing salaries

tax system, those who suffer most are the middle-income groups, that is, the so-tax system, those who suffer most are the middle-income groups, that is, the so-tax system, those who suffer most are the middle-income groups, that is, the so-tax system, those who suffer most are the middle-income groups, that is, the so-

called sandwich class. They pay tax at the 25% marginal rate, which is much highercalled sandwich class. They pay tax at the 25% marginal rate, which is much highercalled sandwich class. They pay tax at the 25% marginal rate, which is much highercalled sandwich class. They pay tax at the 25% marginal rate, which is much higher

than the 15% standard rate charged on high-income groups. This gives rise to thethan the 15% standard rate charged on high-income groups. This gives rise to thethan the 15% standard rate charged on high-income groups. This gives rise to thethan the 15% standard rate charged on high-income groups. This gives rise to the

following ridiculous situation: A person earning $9,000 a month will be taxed $250following ridiculous situation: A person earning $9,000 a month will be taxed $250following ridiculous situation: A person earning $9,000 a month will be taxed $250following ridiculous situation: A person earning $9,000 a month will be taxed $250

for every extra $1,000 earned whereas someone earning $20,000 a month will be taxedfor every extra $1,000 earned whereas someone earning $20,000 a month will be taxedfor every extra $1,000 earned whereas someone earning $20,000 a month will be taxedfor every extra $1,000 earned whereas someone earning $20,000 a month will be taxed

only $150 for every extra $1,000 earned. Such unfair and unreasonable phenomenononly $150 for every extra $1,000 earned. Such unfair and unreasonable phenomenononly $150 for every extra $1,000 earned. Such unfair and unreasonable phenomenononly $150 for every extra $1,000 earned. Such unfair and unreasonable phenomenon

must be changed.must be changed.must be changed.must be changed.

The United Democrats have proposed to reThe United Democrats have proposed to reThe United Democrats have proposed to reThe United Democrats have proposed to remove the maximum 25% marginal rate andmove the maximum 25% marginal rate andmove the maximum 25% marginal rate andmove the maximum 25% marginal rate and

the 15% standard rate and to maintain the maximum marginal rate at 17%. This willthe 15% standard rate and to maintain the maximum marginal rate at 17%. This willthe 15% standard rate and to maintain the maximum marginal rate at 17%. This willthe 15% standard rate and to maintain the maximum marginal rate at 17%. This will

benefit the vast majority of the sandwich class and make the salaries tax system morebenefit the vast majority of the sandwich class and make the salaries tax system morebenefit the vast majority of the sandwich class and make the salaries tax system morebenefit the vast majority of the sandwich class and make the salaries tax system more

equitable and reasonable.equitable and reasonable.equitable and reasonable.equitable and reasonable.

In the meantime, theIn the meantime, theIn the meantime, theIn the meantime, the Government should also note that the living burden of the Government should also note that the living burden of the Government should also note that the living burden of the Government should also note that the living burden of the

sandwich class not just comes from their tax burden, but more importantly from theirsandwich class not just comes from their tax burden, but more importantly from theirsandwich class not just comes from their tax burden, but more importantly from theirsandwich class not just comes from their tax burden, but more importantly from their

need for housing. At present, a four-member family with a monthly household incomeneed for housing. At present, a four-member family with a monthly household incomeneed for housing. At present, a four-member family with a monthly household incomeneed for housing. At present, a four-member family with a monthly household income

of up to $9,700 can apply for public housing flats while households earning not moreof up to $9,700 can apply for public housing flats while households earning not moreof up to $9,700 can apply for public housing flats while households earning not moreof up to $9,700 can apply for public housing flats while households earning not more

than $18,000 per month are eligible for Home Ownership Scheme flats. Families withthan $18,000 per month are eligible for Home Ownership Scheme flats. Families withthan $18,000 per month are eligible for Home Ownership Scheme flats. Families withthan $18,000 per month are eligible for Home Ownership Scheme flats. Families with

a monthly income of barely over $18,000 are barred from applying for HOS flats anda monthly income of barely over $18,000 are barred from applying for HOS flats anda monthly income of barely over $18,000 are barred from applying for HOS flats anda monthly income of barely over $18,000 are barred from applying for HOS flats and

also have to pay heavy taxes. So they simply do not have the means to buy flats inalso have to pay heavy taxes. So they simply do not have the means to buy flats inalso have to pay heavy taxes. So they simply do not have the means to buy flats inalso have to pay heavy taxes. So they simply do not have the means to buy flats in

the private sector in the face of skyrocketing property prices. Today, the only waythe private sector in the face of skyrocketing property prices. Today, the only waythe private sector in the face of skyrocketing property prices. Today, the only waythe private sector in the face of skyrocketing property prices. Today, the only way

for the sandwich class to purchase their own flats is to join the ranks of propertyfor the sandwich class to purchase their own flats is to join the ranks of propertyfor the sandwich class to purchase their own flats is to join the ranks of propertyfor the sandwich class to purchase their own flats is to join the ranks of property

speculators and earn enough money to settle the downpayment before paying the fullspeculators and earn enough money to settle the downpayment before paying the fullspeculators and earn enough money to settle the downpayment before paying the fullspeculators and earn enough money to settle the downpayment before paying the full

price by instalments. Another option is to do part-time jobs. Mr Deputy President,price by instalments. Another option is to do part-time jobs. Mr Deputy President,price by instalments. Another option is to do part-time jobs. Mr Deputy President,price by instalments. Another option is to do part-time jobs. Mr Deputy President,

I know of a young couple from the teacher profession whose family income is just overI know of a young couple from the teacher profession whose family income is just overI know of a young couple from the teacher profession whose family income is just overI know of a young couple from the teacher profession whose family income is just over

$20,000 a month. Every night, they each have to give three private tuitions after$20,000 a month. Every night, they each have to give three private tuitions after$20,000 a month. Every night, they each have to give three private tuitions after$20,000 a month. Every night, they each have to give three private tuitions after

school. Mr Deputy President, it is indeed a sorry state of affairs when the coupleschool. Mr Deputy President, it is indeed a sorry state of affairs when the coupleschool. Mr Deputy President, it is indeed a sorry state of affairs when the coupleschool. Mr Deputy President, it is indeed a sorry state of affairs when the couple

have to struggle so hard just to keep a tiny dwelling place of 400 sq ft. There arehave to struggle so hard just to keep a tiny dwelling place of 400 sq ft. There arehave to struggle so hard just to keep a tiny dwelling place of 400 sq ft. There arehave to struggle so hard just to keep a tiny dwelling place of 400 sq ft. There are

only two choices left to them, that is, to resign themselves to fate or to resist.only two choices left to them, that is, to resign themselves to fate or to resist.only two choices left to them, that is, to resign themselves to fate or to resist.only two choices left to them, that is, to resign themselves to fate or to resist.

What exactly do we want them to choose from?What exactly do we want them to choose from?What exactly do we want them to choose from?What exactly do we want them to choose from?

Mr Deputy President, the Financial Secretary has recently proposed to solve theMr Deputy President, the Financial Secretary has recently proposed to solve theMr Deputy President, the Financial Secretary has recently proposed to solve theMr Deputy President, the Financial Secretary has recently proposed to solve the

housing problem of the sandwich class. Albeit belated, this is encouraging news tohousing problem of the sandwich class. Albeit belated, this is encouraging news tohousing problem of the sandwich class. Albeit belated, this is encouraging news tohousing problem of the sandwich class. Albeit belated, this is encouraging news to

the sandwich class. Here, I would like to ask the Government to allocate, apart fromthe sandwich class. Here, I would like to ask the Government to allocate, apart fromthe sandwich class. Here, I would like to ask the Government to allocate, apart fromthe sandwich class. Here, I would like to ask the Government to allocate, apart from

the existing quotas for public housing and HOS flats, additional land for sandwichthe existing quotas for public housing and HOS flats, additional land for sandwichthe existing quotas for public housing and HOS flats, additional land for sandwichthe existing quotas for public housing and HOS flats, additional land for sandwich

class housing for families earning between $18,000 and $36,000 a month. Sandwichclass housing for families earning between $18,000 and $36,000 a month. Sandwichclass housing for families earning between $18,000 and $36,000 a month. Sandwichclass housing for families earning between $18,000 and $36,000 a month. Sandwich

class housing will not only bring profits to the Housing Department, but will alsoclass housing will not only bring profits to the Housing Department, but will alsoclass housing will not only bring profits to the Housing Department, but will alsoclass housing will not only bring profits to the Housing Department, but will also

curb property speculation. More importantly, this will help solve the housing needscurb property speculation. More importantly, this will help solve the housing needscurb property speculation. More importantly, this will help solve the housing needscurb property speculation. More importantly, this will help solve the housing needs

of the sandwich class and restore smiles on their faces.of the sandwich class and restore smiles on their faces.of the sandwich class and restore smiles on their faces.of the sandwich class and restore smiles on their faces.

Mr Deputy President, for the remaindMr Deputy President, for the remaindMr Deputy President, for the remaindMr Deputy President, for the remainder of my speech, I would like to make someer of my speech, I would like to make someer of my speech, I would like to make someer of my speech, I would like to make some

candid comments on the Financial Secretary Mr MacLEOD's handling of this year's Budget.candid comments on the Financial Secretary Mr MacLEOD's handling of this year's Budget.candid comments on the Financial Secretary Mr MacLEOD's handling of this year's Budget.candid comments on the Financial Secretary Mr MacLEOD's handling of this year's Budget.

After delivering his Budget speech, Mr MacLEOD has all along emphasized that theAfter delivering his Budget speech, Mr MacLEOD has all along emphasized that theAfter delivering his Budget speech, Mr MacLEOD has all along emphasized that theAfter delivering his Budget speech, Mr MacLEOD has all along emphasized that the

Budget can only be accepted in its entirety and no changes whatsoever can be made.Budget can only be accepted in its entirety and no changes whatsoever can be made.Budget can only be accepted in its entirety and no changes whatsoever can be made.Budget can only be accepted in its entirety and no changes whatsoever can be made.

It is said that there is no intention to turn Legislative Councillors into "rubberIt is said that there is no intention to turn Legislative Councillors into "rubberIt is said that there is no intention to turn Legislative Councillors into "rubberIt is said that there is no intention to turn Legislative Councillors into "rubber

stamps" as there are many ways for them to exert an influence on the Budget.stamps" as there are many ways for them to exert an influence on the Budget.stamps" as there are many ways for them to exert an influence on the Budget.stamps" as there are many ways for them to exert an influence on the Budget.

Mr MacLEOD, as a Legislative Councillor, I and many UMr MacLEOD, as a Legislative Councillor, I and many UMr MacLEOD, as a Legislative Councillor, I and many UMr MacLEOD, as a Legislative Councillor, I and many United Democrats Councillorsnited Democrats Councillorsnited Democrats Councillorsnited Democrats Councillors

honestly do not see what other ways are open to us for influencing the Budget. Takehonestly do not see what other ways are open to us for influencing the Budget. Takehonestly do not see what other ways are open to us for influencing the Budget. Takehonestly do not see what other ways are open to us for influencing the Budget. Take

as an example the education sector which I represent. Several months before theas an example the education sector which I represent. Several months before theas an example the education sector which I represent. Several months before theas an example the education sector which I represent. Several months before the

release of the Budget, the education circles have on numerous occasions, includingrelease of the Budget, the education circles have on numerous occasions, includingrelease of the Budget, the education circles have on numerous occasions, includingrelease of the Budget, the education circles have on numerous occasions, including

at meetings of the OMELCO Panel on Education, voiced their objections to slashingat meetings of the OMELCO Panel on Education, voiced their objections to slashingat meetings of the OMELCO Panel on Education, voiced their objections to slashingat meetings of the OMELCO Panel on Education, voiced their objections to slashing

education spending. On the question of taxation, United Democrats members and othereducation spending. On the question of taxation, United Democrats members and othereducation spending. On the question of taxation, United Democrats members and othereducation spending. On the question of taxation, United Democrats members and other

Members of this Council have also made known their views on various occasions. AsMembers of this Council have also made known their views on various occasions. AsMembers of this Council have also made known their views on various occasions. AsMembers of this Council have also made known their views on various occasions. As

I can recall, when this Council held a debate on taxation system, Mr MacLEOD had beenI can recall, when this Council held a debate on taxation system, Mr MacLEOD had beenI can recall, when this Council held a debate on taxation system, Mr MacLEOD had beenI can recall, when this Council held a debate on taxation system, Mr MacLEOD had been

away from his seat for long periods of time. To be frank, when Members of this Councilaway from his seat for long periods of time. To be frank, when Members of this Councilaway from his seat for long periods of time. To be frank, when Members of this Councilaway from his seat for long periods of time. To be frank, when Members of this Council

were putting forward their views on that occasion, they were more or less like speakingwere putting forward their views on that occasion, they were more or less like speakingwere putting forward their views on that occasion, they were more or less like speakingwere putting forward their views on that occasion, they were more or less like speaking

to the air. If Mr MacLEOD claims there are many ways for Legislative Councillorsto the air. If Mr MacLEOD claims there are many ways for Legislative Councillorsto the air. If Mr MacLEOD claims there are many ways for Legislative Councillorsto the air. If Mr MacLEOD claims there are many ways for Legislative Councillors

to exert an influence on the Budget, I reckon that he may either be joking or simplyto exert an influence on the Budget, I reckon that he may either be joking or simplyto exert an influence on the Budget, I reckon that he may either be joking or simplyto exert an influence on the Budget, I reckon that he may either be joking or simply

thinking too highly of us.thinking too highly of us.thinking too highly of us.thinking too highly of us.

Mr MacLEOD, if a Legislative CouncillorMr MacLEOD, if a Legislative CouncillorMr MacLEOD, if a Legislative CouncillorMr MacLEOD, if a Legislative Councillor was unwilling to become a "rubber stamp" was unwilling to become a "rubber stamp" was unwilling to become a "rubber stamp" was unwilling to become a "rubber stamp"

as you had already said and had no choice but to endorse the Budget, the only optionas you had already said and had no choice but to endorse the Budget, the only optionas you had already said and had no choice but to endorse the Budget, the only optionas you had already said and had no choice but to endorse the Budget, the only option

left to him would be to become a "talking rubber stamp" and to give his endorsementleft to him would be to become a "talking rubber stamp" and to give his endorsementleft to him would be to become a "talking rubber stamp" and to give his endorsementleft to him would be to become a "talking rubber stamp" and to give his endorsement

as before after the talking.as before after the talking.as before after the talking.as before after the talking.

Mr MacLEOD, yoMr MacLEOD, yoMr MacLEOD, yoMr MacLEOD, you have obviously miscalculated the situation. Once again, I mustu have obviously miscalculated the situation. Once again, I mustu have obviously miscalculated the situation. Once again, I mustu have obviously miscalculated the situation. Once again, I must

reiterate that times have changed. Under the democratic system of government,reiterate that times have changed. Under the democratic system of government,reiterate that times have changed. Under the democratic system of government,reiterate that times have changed. Under the democratic system of government,

changes can be made to all proposals made by the Government, including this year'schanges can be made to all proposals made by the Government, including this year'schanges can be made to all proposals made by the Government, including this year'schanges can be made to all proposals made by the Government, including this year's

Budget. To defer to public opinion is what a democratic society is obliged to do.Budget. To defer to public opinion is what a democratic society is obliged to do.Budget. To defer to public opinion is what a democratic society is obliged to do.Budget. To defer to public opinion is what a democratic society is obliged to do.

It should neither take this as a loss of authority nor a loss of face. Today, whatIt should neither take this as a loss of authority nor a loss of face. Today, whatIt should neither take this as a loss of authority nor a loss of face. Today, whatIt should neither take this as a loss of authority nor a loss of face. Today, what

we are after is not an infallible government, but a government that is always readywe are after is not an infallible government, but a government that is always readywe are after is not an infallible government, but a government that is always readywe are after is not an infallible government, but a government that is always ready

to correct its mistakes. It is by no means sensible to adopt an inflexible attitudeto correct its mistakes. It is by no means sensible to adopt an inflexible attitudeto correct its mistakes. It is by no means sensible to adopt an inflexible attitudeto correct its mistakes. It is by no means sensible to adopt an inflexible attitude

towards the Budget.towards the Budget.towards the Budget.towards the Budget.

Moreover, Mr MacLEOD, I fully support your plans to improve personal allowanceMoreover, Mr MacLEOD, I fully support your plans to improve personal allowanceMoreover, Mr MacLEOD, I fully support your plans to improve personal allowanceMoreover, Mr MacLEOD, I fully support your plans to improve personal allowance

and tax band for salaries tax and to look into the housing problem of the sandwichand tax band for salaries tax and to look into the housing problem of the sandwichand tax band for salaries tax and to look into the housing problem of the sandwichand tax band for salaries tax and to look into the housing problem of the sandwich

class. But when I was working on this speech, it came to my knowledge that you hadclass. But when I was working on this speech, it came to my knowledge that you hadclass. But when I was working on this speech, it came to my knowledge that you hadclass. But when I was working on this speech, it came to my knowledge that you had

come up with a new idea by proposing to reconsider these plans in case this Councilcome up with a new idea by proposing to reconsider these plans in case this Councilcome up with a new idea by proposing to reconsider these plans in case this Councilcome up with a new idea by proposing to reconsider these plans in case this Council

should make changes to the Budget.should make changes to the Budget.should make changes to the Budget.should make changes to the Budget.

Mr MacLEOD, I am greatly disappointed by what you have said. If you fMr MacLEOD, I am greatly disappointed by what you have said. If you fMr MacLEOD, I am greatly disappointed by what you have said. If you fMr MacLEOD, I am greatly disappointed by what you have said. If you firmlyirmlyirmlyirmly

believe that the two major plans above can bring benefit to the public, you shouldbelieve that the two major plans above can bring benefit to the public, you shouldbelieve that the two major plans above can bring benefit to the public, you shouldbelieve that the two major plans above can bring benefit to the public, you should

not have used them as political bargaining counters to compel this Council to votenot have used them as political bargaining counters to compel this Council to votenot have used them as political bargaining counters to compel this Council to votenot have used them as political bargaining counters to compel this Council to vote

in favour of the Budget so as to have these plans implemented. To Legislativein favour of the Budget so as to have these plans implemented. To Legislativein favour of the Budget so as to have these plans implemented. To Legislativein favour of the Budget so as to have these plans implemented. To Legislative

Councillors, this move is intimidation; to the public, this is something givenCouncillors, this move is intimidation; to the public, this is something givenCouncillors, this move is intimidation; to the public, this is something givenCouncillors, this move is intimidation; to the public, this is something given

pitiably in charity. Intimidation will make one feel indignant whereas givingpitiably in charity. Intimidation will make one feel indignant whereas givingpitiably in charity. Intimidation will make one feel indignant whereas givingpitiably in charity. Intimidation will make one feel indignant whereas giving

something pitiably in charity will dent one's dignity. It is only right and propersomething pitiably in charity will dent one's dignity. It is only right and propersomething pitiably in charity will dent one's dignity. It is only right and propersomething pitiably in charity will dent one's dignity. It is only right and proper

for the people to seek a happy life and acquire dwelling places of their own. Itfor the people to seek a happy life and acquire dwelling places of their own. Itfor the people to seek a happy life and acquire dwelling places of their own. Itfor the people to seek a happy life and acquire dwelling places of their own. It

is the Government's responsibility to satisfy these minimum aspirations of the people.is the Government's responsibility to satisfy these minimum aspirations of the people.is the Government's responsibility to satisfy these minimum aspirations of the people.is the Government's responsibility to satisfy these minimum aspirations of the people.

This should not be looked upon as a favour to be granted or to be taken away at anotherThis should not be looked upon as a favour to be granted or to be taken away at anotherThis should not be looked upon as a favour to be granted or to be taken away at anotherThis should not be looked upon as a favour to be granted or to be taken away at another

time.time.time.time.

Mr DeputyMr DeputyMr DeputyMr Deputy President, in view of the fact that basic education has been neglected President, in view of the fact that basic education has been neglected President, in view of the fact that basic education has been neglected President, in view of the fact that basic education has been neglected

and the interests of the lower middle classes have not been looked after in this year'sand the interests of the lower middle classes have not been looked after in this year'sand the interests of the lower middle classes have not been looked after in this year'sand the interests of the lower middle classes have not been looked after in this year's

Budget, and also considering that the Government has yet to respond positively toBudget, and also considering that the Government has yet to respond positively toBudget, and also considering that the Government has yet to respond positively toBudget, and also considering that the Government has yet to respond positively to

the United Democrats' four major requests, namely increasing personal allowance,the United Democrats' four major requests, namely increasing personal allowance,the United Democrats' four major requests, namely increasing personal allowance,the United Democrats' four major requests, namely increasing personal allowance,

widening the tax band, suspending the rates increase and increasing spending onwidening the tax band, suspending the rates increase and increasing spending onwidening the tax band, suspending the rates increase and increasing spending onwidening the tax band, suspending the rates increase and increasing spending on

essential social services, I shall consider voting against the Budget.essential social services, I shall consider voting against the Budget.essential social services, I shall consider voting against the Budget.essential social services, I shall consider voting against the Budget.

Mr Deputy President, these are my Mr Deputy President, these are my Mr Deputy President, these are my Mr Deputy President, these are my remarks.remarks.remarks.remarks.

MR TIMOTHY HA (in Cantonese): Mr Deputy President, preparation work for the "RoseMR TIMOTHY HA (in Cantonese): Mr Deputy President, preparation work for the "RoseMR TIMOTHY HA (in Cantonese): Mr Deputy President, preparation work for the "RoseMR TIMOTHY HA (in Cantonese): Mr Deputy President, preparation work for the "Rose

Garden" project is now underway and in full swing. The airport at Chek Lap Kok isGarden" project is now underway and in full swing. The airport at Chek Lap Kok isGarden" project is now underway and in full swing. The airport at Chek Lap Kok isGarden" project is now underway and in full swing. The airport at Chek Lap Kok is

expected to be ready for operation by 1997. This, together with its various coreexpected to be ready for operation by 1997. This, together with its various coreexpected to be ready for operation by 1997. This, together with its various coreexpected to be ready for operation by 1997. This, together with its various core

projects, will be able to make Hong Kong more prosperous by bringing about anotherprojects, will be able to make Hong Kong more prosperous by bringing about anotherprojects, will be able to make Hong Kong more prosperous by bringing about anotherprojects, will be able to make Hong Kong more prosperous by bringing about another

economic boom. But, except for this magnificent rose garden, what else will be passedeconomic boom. But, except for this magnificent rose garden, what else will be passedeconomic boom. But, except for this magnificent rose garden, what else will be passedeconomic boom. But, except for this magnificent rose garden, what else will be passed

over to the future Hong Kong Special Administrative Region?over to the future Hong Kong Special Administrative Region?over to the future Hong Kong Special Administrative Region?over to the future Hong Kong Special Administrative Region?

Hong Kong is not rich Hong Kong is not rich Hong Kong is not rich Hong Kong is not rich in any natural resources. Quite on the contrary, it lacksin any natural resources. Quite on the contrary, it lacksin any natural resources. Quite on the contrary, it lacksin any natural resources. Quite on the contrary, it lacks

almost all kinds of resources but manpower. However, this year's Budget hardlyalmost all kinds of resources but manpower. However, this year's Budget hardlyalmost all kinds of resources but manpower. However, this year's Budget hardlyalmost all kinds of resources but manpower. However, this year's Budget hardly

suggests any special concerns on the part of the Government for the development andsuggests any special concerns on the part of the Government for the development andsuggests any special concerns on the part of the Government for the development andsuggests any special concerns on the part of the Government for the development and

training of the local workforce. It is really very disappointing to see that thetraining of the local workforce. It is really very disappointing to see that thetraining of the local workforce. It is really very disappointing to see that thetraining of the local workforce. It is really very disappointing to see that the

proposed allocation for the Education Department only shows a meagre growth of 1.5%.proposed allocation for the Education Department only shows a meagre growth of 1.5%.proposed allocation for the Education Department only shows a meagre growth of 1.5%.proposed allocation for the Education Department only shows a meagre growth of 1.5%.

At a time when new problems and challenges are encountered in the area of basicAt a time when new problems and challenges are encountered in the area of basicAt a time when new problems and challenges are encountered in the area of basicAt a time when new problems and challenges are encountered in the area of basic

education, how are the actual needs in basic education in the 1990s to be met witheducation, how are the actual needs in basic education in the 1990s to be met witheducation, how are the actual needs in basic education in the 1990s to be met witheducation, how are the actual needs in basic education in the 1990s to be met with

this close to zero growth rate of education funds? In the face of a mere 1.5% growththis close to zero growth rate of education funds? In the face of a mere 1.5% growththis close to zero growth rate of education funds? In the face of a mere 1.5% growththis close to zero growth rate of education funds? In the face of a mere 1.5% growth

in education funds, kindergartens, primary and secondary schools, special educationin education funds, kindergartens, primary and secondary schools, special educationin education funds, kindergartens, primary and secondary schools, special educationin education funds, kindergartens, primary and secondary schools, special education

institutions and colleges of education will need to compete for the "small crumbs"institutions and colleges of education will need to compete for the "small crumbs"institutions and colleges of education will need to compete for the "small crumbs"institutions and colleges of education will need to compete for the "small crumbs"

of the "budget cake". Can this, in all its possible senses, be reckoned as aof the "budget cake". Can this, in all its possible senses, be reckoned as aof the "budget cake". Can this, in all its possible senses, be reckoned as aof the "budget cake". Can this, in all its possible senses, be reckoned as a

favourable reflection of the Government's sincerity in improving the quality of basicfavourable reflection of the Government's sincerity in improving the quality of basicfavourable reflection of the Government's sincerity in improving the quality of basicfavourable reflection of the Government's sincerity in improving the quality of basic

education? We still remember how the Governor of Hong Kong promised in his latesteducation? We still remember how the Governor of Hong Kong promised in his latesteducation? We still remember how the Governor of Hong Kong promised in his latesteducation? We still remember how the Governor of Hong Kong promised in his latest

policy address that improved quality of education would be made one of the majorpolicy address that improved quality of education would be made one of the majorpolicy address that improved quality of education would be made one of the majorpolicy address that improved quality of education would be made one of the major

objectives to be achieved. Yet, judging from this year's Budget, we have reasonsobjectives to be achieved. Yet, judging from this year's Budget, we have reasonsobjectives to be achieved. Yet, judging from this year's Budget, we have reasonsobjectives to be achieved. Yet, judging from this year's Budget, we have reasons

to conclude that this promise is nothing better than a dishonoured cheque.to conclude that this promise is nothing better than a dishonoured cheque.to conclude that this promise is nothing better than a dishonoured cheque.to conclude that this promise is nothing better than a dishonoured cheque.

What frustrates me is that instead of giving people in the education sector anyWhat frustrates me is that instead of giving people in the education sector anyWhat frustrates me is that instead of giving people in the education sector anyWhat frustrates me is that instead of giving people in the education sector any

hope of getting what they have striven for all these years, the recent Budget leaveshope of getting what they have striven for all these years, the recent Budget leaveshope of getting what they have striven for all these years, the recent Budget leaveshope of getting what they have striven for all these years, the recent Budget leaves

them with the feeling of their requests being thrown into the big blue sea. Thethem with the feeling of their requests being thrown into the big blue sea. Thethem with the feeling of their requests being thrown into the big blue sea. Thethem with the feeling of their requests being thrown into the big blue sea. The

commitments that the Government pledged to make in the past seem to be totallycommitments that the Government pledged to make in the past seem to be totallycommitments that the Government pledged to make in the past seem to be totallycommitments that the Government pledged to make in the past seem to be totally

forgotten in this year's Budget. Let me cite a few examples to illustrate this.forgotten in this year's Budget. Let me cite a few examples to illustrate this.forgotten in this year's Budget. Let me cite a few examples to illustrate this.forgotten in this year's Budget. Let me cite a few examples to illustrate this.

Firstly, on the subject of whole-day schooling in primary schools, the EducationFirstly, on the subject of whole-day schooling in primary schools, the EducationFirstly, on the subject of whole-day schooling in primary schools, the EducationFirstly, on the subject of whole-day schooling in primary schools, the Education

Commission Report No.4 is quoted as stating, "To meet the enormous increase in theCommission Report No.4 is quoted as stating, "To meet the enormous increase in theCommission Report No.4 is quoted as stating, "To meet the enormous increase in theCommission Report No.4 is quoted as stating, "To meet the enormous increase in the

primary school population during the post war years with limited space and capitalprimary school population during the post war years with limited space and capitalprimary school population during the post war years with limited space and capitalprimary school population during the post war years with limited space and capital

resources, the Government decided in 1954 to adopt, as a temporary measure, a systemresources, the Government decided in 1954 to adopt, as a temporary measure, a systemresources, the Government decided in 1954 to adopt, as a temporary measure, a systemresources, the Government decided in 1954 to adopt, as a temporary measure, a system

of half-day operation in primary schools. However, the ultimate target of primaryof half-day operation in primary schools. However, the ultimate target of primaryof half-day operation in primary schools. However, the ultimate target of primaryof half-day operation in primary schools. However, the ultimate target of primary

education remains the provision of whole-day schooling for all." Oddly enough, thiseducation remains the provision of whole-day schooling for all." Oddly enough, thiseducation remains the provision of whole-day schooling for all." Oddly enough, thiseducation remains the provision of whole-day schooling for all." Oddly enough, this

system of bi-sessional school operation at primary level, which was introduced assystem of bi-sessional school operation at primary level, which was introduced assystem of bi-sessional school operation at primary level, which was introduced assystem of bi-sessional school operation at primary level, which was introduced as

an allegedly expedient measure, should have been allowed to remain in force for asan allegedly expedient measure, should have been allowed to remain in force for asan allegedly expedient measure, should have been allowed to remain in force for asan allegedly expedient measure, should have been allowed to remain in force for as

long as 40 years. How long shall we have to wait before we can see any sign oflong as 40 years. How long shall we have to wait before we can see any sign oflong as 40 years. How long shall we have to wait before we can see any sign oflong as 40 years. How long shall we have to wait before we can see any sign of

whole-day schooling in primary schools?whole-day schooling in primary schools?whole-day schooling in primary schools?whole-day schooling in primary schools?

Secondly, it is about the introduction of floating classes to secondary Secondly, it is about the introduction of floating classes to secondary Secondly, it is about the introduction of floating classes to secondary Secondly, it is about the introduction of floating classes to secondary schools.schools.schools.schools.

The White Paper on Hong Kong's secondary education released in 1974 proposed toThe White Paper on Hong Kong's secondary education released in 1974 proposed toThe White Paper on Hong Kong's secondary education released in 1974 proposed toThe White Paper on Hong Kong's secondary education released in 1974 proposed to

introduce floating classes to all secondary schools as one of the temporary measuresintroduce floating classes to all secondary schools as one of the temporary measuresintroduce floating classes to all secondary schools as one of the temporary measuresintroduce floating classes to all secondary schools as one of the temporary measures

to achieve the objective of providing education for all. To everybody's surprise,to achieve the objective of providing education for all. To everybody's surprise,to achieve the objective of providing education for all. To everybody's surprise,to achieve the objective of providing education for all. To everybody's surprise,

the White Paper issued in 1978 on the development of senior secondary and tertiarythe White Paper issued in 1978 on the development of senior secondary and tertiarythe White Paper issued in 1978 on the development of senior secondary and tertiarythe White Paper issued in 1978 on the development of senior secondary and tertiary

education proposed to turn it into a permanent measure for implementation in all kindseducation proposed to turn it into a permanent measure for implementation in all kindseducation proposed to turn it into a permanent measure for implementation in all kindseducation proposed to turn it into a permanent measure for implementation in all kinds

of schools. That explains why the education sector finds it hard to give credenceof schools. That explains why the education sector finds it hard to give credenceof schools. That explains why the education sector finds it hard to give credenceof schools. That explains why the education sector finds it hard to give credence

to any Government's assurance.to any Government's assurance.to any Government's assurance.to any Government's assurance.

Thirdly, many recommendations in the Education Commission Report No.4 areThirdly, many recommendations in the Education Commission Report No.4 areThirdly, many recommendations in the Education Commission Report No.4 areThirdly, many recommendations in the Education Commission Report No.4 are

directed at upgrading the quality of basic education in various aspects such asdirected at upgrading the quality of basic education in various aspects such asdirected at upgrading the quality of basic education in various aspects such asdirected at upgrading the quality of basic education in various aspects such as

curriculum development, attainment assessments, and special education. Theycurriculum development, attainment assessments, and special education. Theycurriculum development, attainment assessments, and special education. Theycurriculum development, attainment assessments, and special education. They

include respectively the establishment of the Curriculum Development Institute, theinclude respectively the establishment of the Curriculum Development Institute, theinclude respectively the establishment of the Curriculum Development Institute, theinclude respectively the establishment of the Curriculum Development Institute, the

development of a new framework of targets-related assessments and the adoption ofdevelopment of a new framework of targets-related assessments and the adoption ofdevelopment of a new framework of targets-related assessments and the adoption ofdevelopment of a new framework of targets-related assessments and the adoption of

"whole-day approach" in guidance and counselling work and the setting up of practical"whole-day approach" in guidance and counselling work and the setting up of practical"whole-day approach" in guidance and counselling work and the setting up of practical"whole-day approach" in guidance and counselling work and the setting up of practical

schools. It is, however, an exercise of "much cry and little wool". Some of theseschools. It is, however, an exercise of "much cry and little wool". Some of theseschools. It is, however, an exercise of "much cry and little wool". Some of theseschools. It is, however, an exercise of "much cry and little wool". Some of these

recommendations, which have long gained acceptance as part of the educational policy,recommendations, which have long gained acceptance as part of the educational policy,recommendations, which have long gained acceptance as part of the educational policy,recommendations, which have long gained acceptance as part of the educational policy,

are still waiting to be put into practice. It is therefore doubtful whether theare still waiting to be put into practice. It is therefore doubtful whether theare still waiting to be put into practice. It is therefore doubtful whether theare still waiting to be put into practice. It is therefore doubtful whether the

Government is really sincere in promoting the quality of education in Hong Kong.Government is really sincere in promoting the quality of education in Hong Kong.Government is really sincere in promoting the quality of education in Hong Kong.Government is really sincere in promoting the quality of education in Hong Kong.

Fourthly, on the issue of fringe benefits for teachers, I am going to quote threeFourthly, on the issue of fringe benefits for teachers, I am going to quote threeFourthly, on the issue of fringe benefits for teachers, I am going to quote threeFourthly, on the issue of fringe benefits for teachers, I am going to quote three

recruitment advertisements for your information. The first one was put up by therecruitment advertisements for your information. The first one was put up by therecruitment advertisements for your information. The first one was put up by therecruitment advertisements for your information. The first one was put up by the

Vocational Training Council for recruitment of Instructor/food preparation --Vocational Training Council for recruitment of Instructor/food preparation --Vocational Training Council for recruitment of Instructor/food preparation --Vocational Training Council for recruitment of Instructor/food preparation --

Chinese style, or chef, (published in Ming Pao on 2 March). It was stated that "forChinese style, or chef, (published in Ming Pao on 2 March). It was stated that "forChinese style, or chef, (published in Ming Pao on 2 March). It was stated that "forChinese style, or chef, (published in Ming Pao on 2 March). It was stated that "for

appointment to the above post ..... fringe benefits would include leave, medical andappointment to the above post ..... fringe benefits would include leave, medical andappointment to the above post ..... fringe benefits would include leave, medical andappointment to the above post ..... fringe benefits would include leave, medical and

dental services, children's education allowance."dental services, children's education allowance."dental services, children's education allowance."dental services, children's education allowance."

The second advertisement was put up by Lingnan College to recruit Driver -- IThe second advertisement was put up by Lingnan College to recruit Driver -- IThe second advertisement was put up by Lingnan College to recruit Driver -- IThe second advertisement was put up by Lingnan College to recruit Driver -- I

suppose this is a vacancy for the President's driver -- (published in Ming Pao onsuppose this is a vacancy for the President's driver -- (published in Ming Pao onsuppose this is a vacancy for the President's driver -- (published in Ming Pao onsuppose this is a vacancy for the President's driver -- (published in Ming Pao on

21 March). It mentioned that "fringe benefits included gratuity ..... medical21 March). It mentioned that "fringe benefits included gratuity ..... medical21 March). It mentioned that "fringe benefits included gratuity ..... medical21 March). It mentioned that "fringe benefits included gratuity ..... medical

allowance and paid leave."allowance and paid leave."allowance and paid leave."allowance and paid leave."

The third advertisement was about the recruitment of staff by the HospitalThe third advertisement was about the recruitment of staff by the HospitalThe third advertisement was about the recruitment of staff by the HospitalThe third advertisement was about the recruitment of staff by the Hospital

Authority (published in the South China Morning Post on 7 March). It stated thatAuthority (published in the South China Morning Post on 7 March). It stated thatAuthority (published in the South China Morning Post on 7 March). It stated thatAuthority (published in the South China Morning Post on 7 March). It stated that

there would be "excellent benefits including annual leave, medical and dentalthere would be "excellent benefits including annual leave, medical and dentalthere would be "excellent benefits including annual leave, medical and dentalthere would be "excellent benefits including annual leave, medical and dental

coverages and housing loan interest subsidy scheme."coverages and housing loan interest subsidy scheme."coverages and housing loan interest subsidy scheme."coverages and housing loan interest subsidy scheme."

I remember that the Government, when considering the fringe benefit package forI remember that the Government, when considering the fringe benefit package forI remember that the Government, when considering the fringe benefit package forI remember that the Government, when considering the fringe benefit package for

staff of the Hospital Authority, was thinking of extending such benefits to teachers.staff of the Hospital Authority, was thinking of extending such benefits to teachers.staff of the Hospital Authority, was thinking of extending such benefits to teachers.staff of the Hospital Authority, was thinking of extending such benefits to teachers.

Now that the various fringe benefits for the Hospital Authority staff were announcedNow that the various fringe benefits for the Hospital Authority staff were announcedNow that the various fringe benefits for the Hospital Authority staff were announcedNow that the various fringe benefits for the Hospital Authority staff were announced

in 1990 for implementation, what about those for the teachers? Why is there suchin 1990 for implementation, what about those for the teachers? Why is there suchin 1990 for implementation, what about those for the teachers? Why is there suchin 1990 for implementation, what about those for the teachers? Why is there such

a great disparity between the fringe benefits offered to teachers and those to thea great disparity between the fringe benefits offered to teachers and those to thea great disparity between the fringe benefits offered to teachers and those to thea great disparity between the fringe benefits offered to teachers and those to the

staff of the Vocational Training Council, the Lingnan College and the Hospitalstaff of the Vocational Training Council, the Lingnan College and the Hospitalstaff of the Vocational Training Council, the Lingnan College and the Hospitalstaff of the Vocational Training Council, the Lingnan College and the Hospital

Authority as mentioned in the above quoted recruitment advertisements,Authority as mentioned in the above quoted recruitment advertisements,Authority as mentioned in the above quoted recruitment advertisements,Authority as mentioned in the above quoted recruitment advertisements,

notwithstanding they are all in the employ of subvented organizations? Does it meannotwithstanding they are all in the employ of subvented organizations? Does it meannotwithstanding they are all in the employ of subvented organizations? Does it meannotwithstanding they are all in the employ of subvented organizations? Does it mean

that teachers are less respected by the Government or that their actions in strivingthat teachers are less respected by the Government or that their actions in strivingthat teachers are less respected by the Government or that their actions in strivingthat teachers are less respected by the Government or that their actions in striving

for their better fringe benefits are not strong enough? Has the Government forgottenfor their better fringe benefits are not strong enough? Has the Government forgottenfor their better fringe benefits are not strong enough? Has the Government forgottenfor their better fringe benefits are not strong enough? Has the Government forgotten

that one major cause of the large-scale industrial actions taken by teachers in 1973that one major cause of the large-scale industrial actions taken by teachers in 1973that one major cause of the large-scale industrial actions taken by teachers in 1973that one major cause of the large-scale industrial actions taken by teachers in 1973

was the insufferable disparity in the conditions of service between the nursing staffwas the insufferable disparity in the conditions of service between the nursing staffwas the insufferable disparity in the conditions of service between the nursing staffwas the insufferable disparity in the conditions of service between the nursing staff

and the teachers?and the teachers?and the teachers?and the teachers?

As regards the above four points, they are long-standing issues which theAs regards the above four points, they are long-standing issues which theAs regards the above four points, they are long-standing issues which theAs regards the above four points, they are long-standing issues which the

education sector has been looking anxiously to the Government for their solutions.education sector has been looking anxiously to the Government for their solutions.education sector has been looking anxiously to the Government for their solutions.education sector has been looking anxiously to the Government for their solutions.

However, judging from this year's Budget, it seems that the Government still has noHowever, judging from this year's Budget, it seems that the Government still has noHowever, judging from this year's Budget, it seems that the Government still has noHowever, judging from this year's Budget, it seems that the Government still has no

intention of committing itself to settling these matters.intention of committing itself to settling these matters.intention of committing itself to settling these matters.intention of committing itself to settling these matters.

In recent years, the need to finance some large-scale infrastructural projectsIn recent years, the need to finance some large-scale infrastructural projectsIn recent years, the need to finance some large-scale infrastructural projectsIn recent years, the need to finance some large-scale infrastructural projects

has put the Hong Kong Government under greater financial constraint. However, thishas put the Hong Kong Government under greater financial constraint. However, thishas put the Hong Kong Government under greater financial constraint. However, thishas put the Hong Kong Government under greater financial constraint. However, this

has only been the case in the past few years and will be no more than a temporaryhas only been the case in the past few years and will be no more than a temporaryhas only been the case in the past few years and will be no more than a temporaryhas only been the case in the past few years and will be no more than a temporary

situation. It can be expected that the completion of all these projects willsituation. It can be expected that the completion of all these projects willsituation. It can be expected that the completion of all these projects willsituation. It can be expected that the completion of all these projects will

eventually bring about a more prosperous Hong Kong with increased surpluses andeventually bring about a more prosperous Hong Kong with increased surpluses andeventually bring about a more prosperous Hong Kong with increased surpluses andeventually bring about a more prosperous Hong Kong with increased surpluses and

reserve.reserve.reserve.reserve.

At present, education has, unfortunately, also become one of the areas whereAt present, education has, unfortunately, also become one of the areas whereAt present, education has, unfortunately, also become one of the areas whereAt present, education has, unfortunately, also become one of the areas where

provisions are to be cut down in order to meet the expenditure on the large-scaleprovisions are to be cut down in order to meet the expenditure on the large-scaleprovisions are to be cut down in order to meet the expenditure on the large-scaleprovisions are to be cut down in order to meet the expenditure on the large-scale

infrastructural works. However, birth rate in Hong Kong is falling. Statisticsinfrastructural works. However, birth rate in Hong Kong is falling. Statisticsinfrastructural works. However, birth rate in Hong Kong is falling. Statisticsinfrastructural works. However, birth rate in Hong Kong is falling. Statistics

show that the student population of primary and secondary schools is expected to dropshow that the student population of primary and secondary schools is expected to dropshow that the student population of primary and secondary schools is expected to dropshow that the student population of primary and secondary schools is expected to drop

by about 10% in the coming five years. By that time, the financial situation in theby about 10% in the coming five years. By that time, the financial situation in theby about 10% in the coming five years. By that time, the financial situation in theby about 10% in the coming five years. By that time, the financial situation in the

education sector will be less tight than it is now. The troubles being encounterededucation sector will be less tight than it is now. The troubles being encounterededucation sector will be less tight than it is now. The troubles being encounterededucation sector will be less tight than it is now. The troubles being encountered

with regard to education provisions are comparable to a short-term cash flow problemwith regard to education provisions are comparable to a short-term cash flow problemwith regard to education provisions are comparable to a short-term cash flow problemwith regard to education provisions are comparable to a short-term cash flow problem

experienced by a company. Therefore, while Hong Kong is having a huge surplus, Iexperienced by a company. Therefore, while Hong Kong is having a huge surplus, Iexperienced by a company. Therefore, while Hong Kong is having a huge surplus, Iexperienced by a company. Therefore, while Hong Kong is having a huge surplus, I

hope the Government will agree to allocate more fund for the education sector byhope the Government will agree to allocate more fund for the education sector byhope the Government will agree to allocate more fund for the education sector byhope the Government will agree to allocate more fund for the education sector by

borrowing the required sum from the reserve fund so as to help it tide over its presentborrowing the required sum from the reserve fund so as to help it tide over its presentborrowing the required sum from the reserve fund so as to help it tide over its presentborrowing the required sum from the reserve fund so as to help it tide over its present

difficulties.difficulties.difficulties.difficulties.

Investment in education can hardly admit any further delay, otherwise, itsInvestment in education can hardly admit any further delay, otherwise, itsInvestment in education can hardly admit any further delay, otherwise, itsInvestment in education can hardly admit any further delay, otherwise, its

adverse after-effects will gradually surface in the coming years. By then, evenadverse after-effects will gradually surface in the coming years. By then, evenadverse after-effects will gradually surface in the coming years. By then, evenadverse after-effects will gradually surface in the coming years. By then, even

though Hong Kong may have impressive infrastructural facilities, yet what good willthough Hong Kong may have impressive infrastructural facilities, yet what good willthough Hong Kong may have impressive infrastructural facilities, yet what good willthough Hong Kong may have impressive infrastructural facilities, yet what good will

it do to the whole of the local economy if nothing is achieved in the developmentit do to the whole of the local economy if nothing is achieved in the developmentit do to the whole of the local economy if nothing is achieved in the developmentit do to the whole of the local economy if nothing is achieved in the development

of our human resources?of our human resources?of our human resources?of our human resources?

As far as educational planning is concerned, attention should be gAs far as educational planning is concerned, attention should be gAs far as educational planning is concerned, attention should be gAs far as educational planning is concerned, attention should be given to twoiven to twoiven to twoiven to two

specific points. First of all, education development is an on-going exercise inspecific points. First of all, education development is an on-going exercise inspecific points. First of all, education development is an on-going exercise inspecific points. First of all, education development is an on-going exercise in

which continuity is essential. In other words, it means that education as a wholewhich continuity is essential. In other words, it means that education as a wholewhich continuity is essential. In other words, it means that education as a wholewhich continuity is essential. In other words, it means that education as a whole

from basic to tertiary levels is an inseparable entity which cannot be dealt withfrom basic to tertiary levels is an inseparable entity which cannot be dealt withfrom basic to tertiary levels is an inseparable entity which cannot be dealt withfrom basic to tertiary levels is an inseparable entity which cannot be dealt with

on a "piecemeal" basis by placing emphasis just on one level at a time without givingon a "piecemeal" basis by placing emphasis just on one level at a time without givingon a "piecemeal" basis by placing emphasis just on one level at a time without givingon a "piecemeal" basis by placing emphasis just on one level at a time without giving

attention to all the other levels. It is very much like the Budget which, as theattention to all the other levels. It is very much like the Budget which, as theattention to all the other levels. It is very much like the Budget which, as theattention to all the other levels. It is very much like the Budget which, as the

Financial Secretary said, is an inseparable whole. Secondly, education is aFinancial Secretary said, is an inseparable whole. Secondly, education is aFinancial Secretary said, is an inseparable whole. Secondly, education is aFinancial Secretary said, is an inseparable whole. Secondly, education is a

long-term investment which yields no effects until after many years. For instance,long-term investment which yields no effects until after many years. For instance,long-term investment which yields no effects until after many years. For instance,long-term investment which yields no effects until after many years. For instance,

the drastic fall in the education standard of our secondary school leavers which hasthe drastic fall in the education standard of our secondary school leavers which hasthe drastic fall in the education standard of our secondary school leavers which hasthe drastic fall in the education standard of our secondary school leavers which has

come under public criticism is actually due to many years' prolonged neglect of thecome under public criticism is actually due to many years' prolonged neglect of thecome under public criticism is actually due to many years' prolonged neglect of thecome under public criticism is actually due to many years' prolonged neglect of the

basic education. Today, our tertiary institutes as well as the whole society arebasic education. Today, our tertiary institutes as well as the whole society arebasic education. Today, our tertiary institutes as well as the whole society arebasic education. Today, our tertiary institutes as well as the whole society are

still paying heavily for this mistake. Has it ever crossed your mind that the Primarystill paying heavily for this mistake. Has it ever crossed your mind that the Primarystill paying heavily for this mistake. Has it ever crossed your mind that the Primarystill paying heavily for this mistake. Has it ever crossed your mind that the Primary

I pupils enrolled in September 1992 may in 13 years' time become matriculants whoI pupils enrolled in September 1992 may in 13 years' time become matriculants whoI pupils enrolled in September 1992 may in 13 years' time become matriculants whoI pupils enrolled in September 1992 may in 13 years' time become matriculants who

will knock at the doors of the universities? The seeds of trouble that the Financialwill knock at the doors of the universities? The seeds of trouble that the Financialwill knock at the doors of the universities? The seeds of trouble that the Financialwill knock at the doors of the universities? The seeds of trouble that the Financial

Secretary sows today will burden the community with their bitter fruits in 2005. OfSecretary sows today will burden the community with their bitter fruits in 2005. OfSecretary sows today will burden the community with their bitter fruits in 2005. OfSecretary sows today will burden the community with their bitter fruits in 2005. Of

course, by that time, the present Government will have "gone" for ages and no longercourse, by that time, the present Government will have "gone" for ages and no longercourse, by that time, the present Government will have "gone" for ages and no longercourse, by that time, the present Government will have "gone" for ages and no longer

be here to take the blame.be here to take the blame.be here to take the blame.be here to take the blame.

In this year's Budget, the allocations for education are a far cry from meetingIn this year's Budget, the allocations for education are a far cry from meetingIn this year's Budget, the allocations for education are a far cry from meetingIn this year's Budget, the allocations for education are a far cry from meeting

actual needs. Apart from the fact that some issues which should have already beenactual needs. Apart from the fact that some issues which should have already beenactual needs. Apart from the fact that some issues which should have already beenactual needs. Apart from the fact that some issues which should have already been

addressed are still left unattended, the recent proposal to increase the average classaddressed are still left unattended, the recent proposal to increase the average classaddressed are still left unattended, the recent proposal to increase the average classaddressed are still left unattended, the recent proposal to increase the average class

size is bound to affect the quality of education severely. Being greatlysize is bound to affect the quality of education severely. Being greatlysize is bound to affect the quality of education severely. Being greatlysize is bound to affect the quality of education severely. Being greatly

disappointed and dissatisfied at this proposal, to be frank, I find it difficult todisappointed and dissatisfied at this proposal, to be frank, I find it difficult todisappointed and dissatisfied at this proposal, to be frank, I find it difficult todisappointed and dissatisfied at this proposal, to be frank, I find it difficult to

support the Budget. However, the Financial Secretary has indicated that refusal ofsupport the Budget. However, the Financial Secretary has indicated that refusal ofsupport the Budget. However, the Financial Secretary has indicated that refusal ofsupport the Budget. However, the Financial Secretary has indicated that refusal of

this Budget might have serious political effects. He has also urged Members not tothis Budget might have serious political effects. He has also urged Members not tothis Budget might have serious political effects. He has also urged Members not tothis Budget might have serious political effects. He has also urged Members not to

put the interests of the whole at risk. As for myself, my conscience is "clear" ifput the interests of the whole at risk. As for myself, my conscience is "clear" ifput the interests of the whole at risk. As for myself, my conscience is "clear" ifput the interests of the whole at risk. As for myself, my conscience is "clear" if

I refuse to support this Budget. Should I do otherwise, it is only because I needI refuse to support this Budget. Should I do otherwise, it is only because I needI refuse to support this Budget. Should I do otherwise, it is only because I needI refuse to support this Budget. Should I do otherwise, it is only because I need

to do so "under compelling situation".to do so "under compelling situation".to do so "under compelling situation".to do so "under compelling situation".

Mr Deputy President, as I still have some reservations about the Budget, I intendMr Deputy President, as I still have some reservations about the Budget, I intendMr Deputy President, as I still have some reservations about the Budget, I intendMr Deputy President, as I still have some reservations about the Budget, I intend

not to make up my mind until I have heard the reply of the Financial Secretary.not to make up my mind until I have heard the reply of the Financial Secretary.not to make up my mind until I have heard the reply of the Financial Secretary.not to make up my mind until I have heard the reply of the Financial Secretary.

DR CONRAD LAM (in Cantonese): Mr Deputy President, every bill has its own focal pointDR CONRAD LAM (in Cantonese): Mr Deputy President, every bill has its own focal pointDR CONRAD LAM (in Cantonese): Mr Deputy President, every bill has its own focal pointDR CONRAD LAM (in Cantonese): Mr Deputy President, every bill has its own focal point

and the Financial Secretary's budget speech to move the Appropriation Bill is noand the Financial Secretary's budget speech to move the Appropriation Bill is noand the Financial Secretary's budget speech to move the Appropriation Bill is noand the Financial Secretary's budget speech to move the Appropriation Bill is no

exception. Its focus is placed on the new airport. The Financial Secretary has inexception. Its focus is placed on the new airport. The Financial Secretary has inexception. Its focus is placed on the new airport. The Financial Secretary has inexception. Its focus is placed on the new airport. The Financial Secretary has in

his speech mentioned the "Airport Core Programme" and its "Memorandum ofhis speech mentioned the "Airport Core Programme" and its "Memorandum ofhis speech mentioned the "Airport Core Programme" and its "Memorandum ofhis speech mentioned the "Airport Core Programme" and its "Memorandum of

Understanding" for 11 times. In fact, the various revenue - raising and expenditureUnderstanding" for 11 times. In fact, the various revenue - raising and expenditureUnderstanding" for 11 times. In fact, the various revenue - raising and expenditureUnderstanding" for 11 times. In fact, the various revenue - raising and expenditure

- cutting measures mentioned in the budget are directly or indirectly related to the- cutting measures mentioned in the budget are directly or indirectly related to the- cutting measures mentioned in the budget are directly or indirectly related to the- cutting measures mentioned in the budget are directly or indirectly related to the

"Airport Core Programme". The Financial Secretary has also mentioned "Hong Kong's"Airport Core Programme". The Financial Secretary has also mentioned "Hong Kong's"Airport Core Programme". The Financial Secretary has also mentioned "Hong Kong's"Airport Core Programme". The Financial Secretary has also mentioned "Hong Kong's

remarkable record of economic success during the past 40 years". He also added thatremarkable record of economic success during the past 40 years". He also added thatremarkable record of economic success during the past 40 years". He also added thatremarkable record of economic success during the past 40 years". He also added that

the "economic success must be a Financial Secretary's first priority". I would likethe "economic success must be a Financial Secretary's first priority". I would likethe "economic success must be a Financial Secretary's first priority". I would likethe "economic success must be a Financial Secretary's first priority". I would like

to point out that Hong Kong owes its economic success to three primary factors, namely,to point out that Hong Kong owes its economic success to three primary factors, namely,to point out that Hong Kong owes its economic success to three primary factors, namely,to point out that Hong Kong owes its economic success to three primary factors, namely,

the external, local and human factors. The external factor is the prevailingthe external, local and human factors. The external factor is the prevailingthe external, local and human factors. The external factor is the prevailingthe external, local and human factors. The external factor is the prevailing

economic and political climate elsewhere in the world. The local factor is Hongeconomic and political climate elsewhere in the world. The local factor is Hongeconomic and political climate elsewhere in the world. The local factor is Hongeconomic and political climate elsewhere in the world. The local factor is Hong

Kong's special geographical position and status. Its significance is confirmed byKong's special geographical position and status. Its significance is confirmed byKong's special geographical position and status. Its significance is confirmed byKong's special geographical position and status. Its significance is confirmed by

the Financial Secretary himself saying that much of our success in recent years mustthe Financial Secretary himself saying that much of our success in recent years mustthe Financial Secretary himself saying that much of our success in recent years mustthe Financial Secretary himself saying that much of our success in recent years must

be attributed to Hong Kong's growing access to trade and investment opportunitiesbe attributed to Hong Kong's growing access to trade and investment opportunitiesbe attributed to Hong Kong's growing access to trade and investment opportunitiesbe attributed to Hong Kong's growing access to trade and investment opportunities

in China. The human factor is the flexibility, diligence and perseverance of thein China. The human factor is the flexibility, diligence and perseverance of thein China. The human factor is the flexibility, diligence and perseverance of thein China. The human factor is the flexibility, diligence and perseverance of the

Hong Kong people. Without these factors, it would have been difficult for Hong KongHong Kong people. Without these factors, it would have been difficult for Hong KongHong Kong people. Without these factors, it would have been difficult for Hong KongHong Kong people. Without these factors, it would have been difficult for Hong Kong

to achieve its present economic success. At present, the financial condition in Hongto achieve its present economic success. At present, the financial condition in Hongto achieve its present economic success. At present, the financial condition in Hongto achieve its present economic success. At present, the financial condition in Hong

Kong is quite stable. There will be an overall budget surplus of $14.1 billion forKong is quite stable. There will be an overall budget surplus of $14.1 billion forKong is quite stable. There will be an overall budget surplus of $14.1 billion forKong is quite stable. There will be an overall budget surplus of $14.1 billion for

1991-92, bringing our fiscal reserves to $92 billion. Yet, will the general public1991-92, bringing our fiscal reserves to $92 billion. Yet, will the general public1991-92, bringing our fiscal reserves to $92 billion. Yet, will the general public1991-92, bringing our fiscal reserves to $92 billion. Yet, will the general public

be able to enjoy better living standard in the next year because of this surplus?be able to enjoy better living standard in the next year because of this surplus?be able to enjoy better living standard in the next year because of this surplus?be able to enjoy better living standard in the next year because of this surplus?

Before answering this question, let us take a look at some numerical figures and facts.Before answering this question, let us take a look at some numerical figures and facts.Before answering this question, let us take a look at some numerical figures and facts.Before answering this question, let us take a look at some numerical figures and facts.

The per capita GDP in Hong Kong is HK$125,000, being among the highest in Asia.The per capita GDP in Hong Kong is HK$125,000, being among the highest in Asia.The per capita GDP in Hong Kong is HK$125,000, being among the highest in Asia.The per capita GDP in Hong Kong is HK$125,000, being among the highest in Asia.

However, the Gini Coefficient has risen to a record high of 0.48, indicating an everHowever, the Gini Coefficient has risen to a record high of 0.48, indicating an everHowever, the Gini Coefficient has risen to a record high of 0.48, indicating an everHowever, the Gini Coefficient has risen to a record high of 0.48, indicating an ever

widening gap between the poor and the rich. According to the figures published bywidening gap between the poor and the rich. According to the figures published bywidening gap between the poor and the rich. According to the figures published bywidening gap between the poor and the rich. According to the figures published by

the Census and Statistics Department, the median monthly income of Hong Kong peoplethe Census and Statistics Department, the median monthly income of Hong Kong peoplethe Census and Statistics Department, the median monthly income of Hong Kong peoplethe Census and Statistics Department, the median monthly income of Hong Kong people

from April to June 1991 was $5,845 and the average wages in Hong Kong sank by 1.2%from April to June 1991 was $5,845 and the average wages in Hong Kong sank by 1.2%from April to June 1991 was $5,845 and the average wages in Hong Kong sank by 1.2%from April to June 1991 was $5,845 and the average wages in Hong Kong sank by 1.2%

in real terms for 1990-91. In the light of this drop in income, an increase of ratesin real terms for 1990-91. In the light of this drop in income, an increase of ratesin real terms for 1990-91. In the light of this drop in income, an increase of ratesin real terms for 1990-91. In the light of this drop in income, an increase of rates

and taxes will definitely deal a blow to the lower income group.and taxes will definitely deal a blow to the lower income group.and taxes will definitely deal a blow to the lower income group.and taxes will definitely deal a blow to the lower income group.

As regards the overall spending on social services (including social welfare,As regards the overall spending on social services (including social welfare,As regards the overall spending on social services (including social welfare,As regards the overall spending on social services (including social welfare,

health, education, housing and labour services), it will represent 42.7% of the publichealth, education, housing and labour services), it will represent 42.7% of the publichealth, education, housing and labour services), it will represent 42.7% of the publichealth, education, housing and labour services), it will represent 42.7% of the public

expenditure, which is 1.5% lesser than the average figure of the 80's. For thoseexpenditure, which is 1.5% lesser than the average figure of the 80's. For thoseexpenditure, which is 1.5% lesser than the average figure of the 80's. For thoseexpenditure, which is 1.5% lesser than the average figure of the 80's. For those

urgently needed social welfare, education and health services, the respective growthurgently needed social welfare, education and health services, the respective growthurgently needed social welfare, education and health services, the respective growthurgently needed social welfare, education and health services, the respective growth

is only 2.8%, 1.6% and 2.7% in comparison with the corresponding revised estimatesis only 2.8%, 1.6% and 2.7% in comparison with the corresponding revised estimatesis only 2.8%, 1.6% and 2.7% in comparison with the corresponding revised estimatesis only 2.8%, 1.6% and 2.7% in comparison with the corresponding revised estimates

for last year. Taking into account the element of inflation, the net growth is infor last year. Taking into account the element of inflation, the net growth is infor last year. Taking into account the element of inflation, the net growth is infor last year. Taking into account the element of inflation, the net growth is in

fact negative.fact negative.fact negative.fact negative.

The Financial Secretary has admitted in paragraph 22 of his Budget that he isThe Financial Secretary has admitted in paragraph 22 of his Budget that he isThe Financial Secretary has admitted in paragraph 22 of his Budget that he isThe Financial Secretary has admitted in paragraph 22 of his Budget that he is

"less optimistic about the prospects for an early and significant fall in the rate"less optimistic about the prospects for an early and significant fall in the rate"less optimistic about the prospects for an early and significant fall in the rate"less optimistic about the prospects for an early and significant fall in the rate

of inflation."of inflation."of inflation."of inflation."

It can also be seen that the workforcIt can also be seen that the workforcIt can also be seen that the workforcIt can also be seen that the workforce in the manufacturing industry has droppede in the manufacturing industry has droppede in the manufacturing industry has droppede in the manufacturing industry has dropped

by 220 000 workers in the past ten years. Underemployment rate of the workingby 220 000 workers in the past ten years. Underemployment rate of the workingby 220 000 workers in the past ten years. Underemployment rate of the workingby 220 000 workers in the past ten years. Underemployment rate of the working

population is now standing at 1.5%.population is now standing at 1.5%.population is now standing at 1.5%.population is now standing at 1.5%.

Property prices are still very high. The lower and middle income groups haveProperty prices are still very high. The lower and middle income groups haveProperty prices are still very high. The lower and middle income groups haveProperty prices are still very high. The lower and middle income groups have

to suffer form exorbitant rents and property prices. In a situation where pricesto suffer form exorbitant rents and property prices. In a situation where pricesto suffer form exorbitant rents and property prices. In a situation where pricesto suffer form exorbitant rents and property prices. In a situation where prices

of properties, land and taxi licences are manipulated by a small group of people,of properties, land and taxi licences are manipulated by a small group of people,of properties, land and taxi licences are manipulated by a small group of people,of properties, land and taxi licences are manipulated by a small group of people,

the Government still holds fast to the free market principle or adopts an approachthe Government still holds fast to the free market principle or adopts an approachthe Government still holds fast to the free market principle or adopts an approachthe Government still holds fast to the free market principle or adopts an approach

of saying much and doing little.of saying much and doing little.of saying much and doing little.of saying much and doing little.

The increase in rates is not as modest as suggested by the Financial Secretary.The increase in rates is not as modest as suggested by the Financial Secretary.The increase in rates is not as modest as suggested by the Financial Secretary.The increase in rates is not as modest as suggested by the Financial Secretary.

The estimated total revenue from rates for 1992-93 will be as high as $11.39 billion,The estimated total revenue from rates for 1992-93 will be as high as $11.39 billion,The estimated total revenue from rates for 1992-93 will be as high as $11.39 billion,The estimated total revenue from rates for 1992-93 will be as high as $11.39 billion,

which is $2.81 billion more than the $8.58 billion for 1991-92, representing anwhich is $2.81 billion more than the $8.58 billion for 1991-92, representing anwhich is $2.81 billion more than the $8.58 billion for 1991-92, representing anwhich is $2.81 billion more than the $8.58 billion for 1991-92, representing an

increase of 32.7%. Along with this will be various fees increase measures which areincrease of 32.7%. Along with this will be various fees increase measures which areincrease of 32.7%. Along with this will be various fees increase measures which areincrease of 32.7%. Along with this will be various fees increase measures which are

to take effect in succession. These include increases in water charges, postageto take effect in succession. These include increases in water charges, postageto take effect in succession. These include increases in water charges, postageto take effect in succession. These include increases in water charges, postage

rates, tunnel tolls, airport departure tax, vehicle licence fees, companyrates, tunnel tolls, airport departure tax, vehicle licence fees, companyrates, tunnel tolls, airport departure tax, vehicle licence fees, companyrates, tunnel tolls, airport departure tax, vehicle licence fees, company

registration fees, and so on. These measures will have the effect of fuelingregistration fees, and so on. These measures will have the effect of fuelingregistration fees, and so on. These measures will have the effect of fuelingregistration fees, and so on. These measures will have the effect of fueling

inflation and directly bring down the living standard of the man in the street.inflation and directly bring down the living standard of the man in the street.inflation and directly bring down the living standard of the man in the street.inflation and directly bring down the living standard of the man in the street.

The Financial Secretary claimed that the increase in personal allowance this yearThe Financial Secretary claimed that the increase in personal allowance this yearThe Financial Secretary claimed that the increase in personal allowance this yearThe Financial Secretary claimed that the increase in personal allowance this year

would reduce revenue by $850 million and benefit 1.3 million people. I have donewould reduce revenue by $850 million and benefit 1.3 million people. I have donewould reduce revenue by $850 million and benefit 1.3 million people. I have donewould reduce revenue by $850 million and benefit 1.3 million people. I have done

the sums on the basis of these figures and found that these 1.3 million people couldthe sums on the basis of these figures and found that these 1.3 million people couldthe sums on the basis of these figures and found that these 1.3 million people couldthe sums on the basis of these figures and found that these 1.3 million people could

save $1.7 per day. However, the total revenue from salaries tax estimated for nextsave $1.7 per day. However, the total revenue from salaries tax estimated for nextsave $1.7 per day. However, the total revenue from salaries tax estimated for nextsave $1.7 per day. However, the total revenue from salaries tax estimated for next

year "will see an increase rather than a decrease", that is, rising from $17.3 billionyear "will see an increase rather than a decrease", that is, rising from $17.3 billionyear "will see an increase rather than a decrease", that is, rising from $17.3 billionyear "will see an increase rather than a decrease", that is, rising from $17.3 billion

for 1991-92 to $21.75 billion for 1992-93, representing a rise of $4.45 billion (orfor 1991-92 to $21.75 billion for 1992-93, representing a rise of $4.45 billion (orfor 1991-92 to $21.75 billion for 1992-93, representing a rise of $4.45 billion (orfor 1991-92 to $21.75 billion for 1992-93, representing a rise of $4.45 billion (or

25.7%). On the other hand, even though corporate profits tax is to increase by 1%,25.7%). On the other hand, even though corporate profits tax is to increase by 1%,25.7%). On the other hand, even though corporate profits tax is to increase by 1%,25.7%). On the other hand, even though corporate profits tax is to increase by 1%,

the estimated increase in revenue from this tax source for the corresponding periodthe estimated increase in revenue from this tax source for the corresponding periodthe estimated increase in revenue from this tax source for the corresponding periodthe estimated increase in revenue from this tax source for the corresponding period

is only 14.3% (or $3.55 billion). The way the Financial Secretary plays on theis only 14.3% (or $3.55 billion). The way the Financial Secretary plays on theis only 14.3% (or $3.55 billion). The way the Financial Secretary plays on theis only 14.3% (or $3.55 billion). The way the Financial Secretary plays on the

figures to make his revenue-raising measures appear to be tax concessions may wellfigures to make his revenue-raising measures appear to be tax concessions may wellfigures to make his revenue-raising measures appear to be tax concessions may wellfigures to make his revenue-raising measures appear to be tax concessions may well

be described as "a tricky game of pluses and minuses in which the ordinary citizensbe described as "a tricky game of pluses and minuses in which the ordinary citizensbe described as "a tricky game of pluses and minuses in which the ordinary citizensbe described as "a tricky game of pluses and minuses in which the ordinary citizens

are surely victimized by whatever the Financial Secretary proposes".are surely victimized by whatever the Financial Secretary proposes".are surely victimized by whatever the Financial Secretary proposes".are surely victimized by whatever the Financial Secretary proposes".

The increase in fees charged by government departments and hospitals under theThe increase in fees charged by government departments and hospitals under theThe increase in fees charged by government departments and hospitals under theThe increase in fees charged by government departments and hospitals under the

Hospital Authority seems to be inevitable. Eighty per cent of the $10.2 billionHospital Authority seems to be inevitable. Eighty per cent of the $10.2 billionHospital Authority seems to be inevitable. Eighty per cent of the $10.2 billionHospital Authority seems to be inevitable. Eighty per cent of the $10.2 billion

allocation to the Hospital Authority will be spent on salaries and allowances. Withallocation to the Hospital Authority will be spent on salaries and allowances. Withallocation to the Hospital Authority will be spent on salaries and allowances. Withallocation to the Hospital Authority will be spent on salaries and allowances. With

the advance of modern technology, medical equipment becomes more and morethe advance of modern technology, medical equipment becomes more and morethe advance of modern technology, medical equipment becomes more and morethe advance of modern technology, medical equipment becomes more and more

sophisticated and expensive. In addition, drugs and medicines are costly. Althoughsophisticated and expensive. In addition, drugs and medicines are costly. Althoughsophisticated and expensive. In addition, drugs and medicines are costly. Althoughsophisticated and expensive. In addition, drugs and medicines are costly. Although

there will be an increase of 5 600 hospital beds in the next four years, yet the annualthere will be an increase of 5 600 hospital beds in the next four years, yet the annualthere will be an increase of 5 600 hospital beds in the next four years, yet the annualthere will be an increase of 5 600 hospital beds in the next four years, yet the annual

estimated expenditure on health services is maintained at 10.5% to 10.7% of the totalestimated expenditure on health services is maintained at 10.5% to 10.7% of the totalestimated expenditure on health services is maintained at 10.5% to 10.7% of the totalestimated expenditure on health services is maintained at 10.5% to 10.7% of the total

public expenditure. The overall expenditure on the Department of Health is estimatedpublic expenditure. The overall expenditure on the Department of Health is estimatedpublic expenditure. The overall expenditure on the Department of Health is estimatedpublic expenditure. The overall expenditure on the Department of Health is estimated

to increase only by a mere 2.1% in real terms in the next year, but it will includeto increase only by a mere 2.1% in real terms in the next year, but it will includeto increase only by a mere 2.1% in real terms in the next year, but it will includeto increase only by a mere 2.1% in real terms in the next year, but it will include

the cost of implementing at least 10 primary health care programmes. With the growingthe cost of implementing at least 10 primary health care programmes. With the growingthe cost of implementing at least 10 primary health care programmes. With the growingthe cost of implementing at least 10 primary health care programmes. With the growing

demand for better health services and in face of an ageing population (there weredemand for better health services and in face of an ageing population (there weredemand for better health services and in face of an ageing population (there weredemand for better health services and in face of an ageing population (there were

512 000 old people aged 65 or above in Hong Kong in 1990 and their number will increase512 000 old people aged 65 or above in Hong Kong in 1990 and their number will increase512 000 old people aged 65 or above in Hong Kong in 1990 and their number will increase512 000 old people aged 65 or above in Hong Kong in 1990 and their number will increase

by 22% in 1995), spending on medical services for this age group is expected to beby 22% in 1995), spending on medical services for this age group is expected to beby 22% in 1995), spending on medical services for this age group is expected to beby 22% in 1995), spending on medical services for this age group is expected to be

three times more than that for the other age groups. Hong Kong's annual expenditurethree times more than that for the other age groups. Hong Kong's annual expenditurethree times more than that for the other age groups. Hong Kong's annual expenditurethree times more than that for the other age groups. Hong Kong's annual expenditure

on medical services is less than 4% of its gross domestic product, which is belowon medical services is less than 4% of its gross domestic product, which is belowon medical services is less than 4% of its gross domestic product, which is belowon medical services is less than 4% of its gross domestic product, which is below

the average level in other developed countries. Take 1987 for example, the averagethe average level in other developed countries. Take 1987 for example, the averagethe average level in other developed countries. Take 1987 for example, the averagethe average level in other developed countries. Take 1987 for example, the average

spending on medical and care services is US$305 per head in Hong Kong, which is 15%spending on medical and care services is US$305 per head in Hong Kong, which is 15%spending on medical and care services is US$305 per head in Hong Kong, which is 15%spending on medical and care services is US$305 per head in Hong Kong, which is 15%

of that of the Americans for the same period. The Government should formulate asof that of the Americans for the same period. The Government should formulate asof that of the Americans for the same period. The Government should formulate asof that of the Americans for the same period. The Government should formulate as

soon as possible a comprehensive policy on medical services to promote the healthsoon as possible a comprehensive policy on medical services to promote the healthsoon as possible a comprehensive policy on medical services to promote the healthsoon as possible a comprehensive policy on medical services to promote the health

of the community. I would like to call upon the Financial Secretary to encourageof the community. I would like to call upon the Financial Secretary to encourageof the community. I would like to call upon the Financial Secretary to encourageof the community. I would like to call upon the Financial Secretary to encourage

the public to take out medical insurance or to encourage the employers to do likewisethe public to take out medical insurance or to encourage the employers to do likewisethe public to take out medical insurance or to encourage the employers to do likewisethe public to take out medical insurance or to encourage the employers to do likewise

on behalf of their employees by providing them some sort of incentive tax allowances.on behalf of their employees by providing them some sort of incentive tax allowances.on behalf of their employees by providing them some sort of incentive tax allowances.on behalf of their employees by providing them some sort of incentive tax allowances.

In concluding his Budget speech, the Financial Secretary has ensured thatIn concluding his Budget speech, the Financial Secretary has ensured thatIn concluding his Budget speech, the Financial Secretary has ensured thatIn concluding his Budget speech, the Financial Secretary has ensured that

"everyone receives proper health care" and confirmed the need to "provide a safety"everyone receives proper health care" and confirmed the need to "provide a safety"everyone receives proper health care" and confirmed the need to "provide a safety"everyone receives proper health care" and confirmed the need to "provide a safety

net for those less able to look after themselves". Yes, it reflects the Financialnet for those less able to look after themselves". Yes, it reflects the Financialnet for those less able to look after themselves". Yes, it reflects the Financialnet for those less able to look after themselves". Yes, it reflects the Financial

Secretary's deep concern about the poor, but the problem is when his concern willSecretary's deep concern about the poor, but the problem is when his concern willSecretary's deep concern about the poor, but the problem is when his concern willSecretary's deep concern about the poor, but the problem is when his concern will

find expression in real action. Should you be so unfortunate to suffer from cancerfind expression in real action. Should you be so unfortunate to suffer from cancerfind expression in real action. Should you be so unfortunate to suffer from cancerfind expression in real action. Should you be so unfortunate to suffer from cancer

and can hardly afford the charges of a private hospital, there is no need to worryand can hardly afford the charges of a private hospital, there is no need to worryand can hardly afford the charges of a private hospital, there is no need to worryand can hardly afford the charges of a private hospital, there is no need to worry

at all because, according to the Financial Secretary's thinking, the safety net willat all because, according to the Financial Secretary's thinking, the safety net willat all because, according to the Financial Secretary's thinking, the safety net willat all because, according to the Financial Secretary's thinking, the safety net will

eventually put you to the care of a hospital under the Hospital Authority if you haveeventually put you to the care of a hospital under the Hospital Authority if you haveeventually put you to the care of a hospital under the Hospital Authority if you haveeventually put you to the care of a hospital under the Hospital Authority if you have

the patience to wait. As to how long you need to wait before you can gain admissionthe patience to wait. As to how long you need to wait before you can gain admissionthe patience to wait. As to how long you need to wait before you can gain admissionthe patience to wait. As to how long you need to wait before you can gain admission

to the hospital, the question can only be answered by the Financial Secretary becauseto the hospital, the question can only be answered by the Financial Secretary becauseto the hospital, the question can only be answered by the Financial Secretary becauseto the hospital, the question can only be answered by the Financial Secretary because

it will depend on how resources are to be distributed and who is to decide on theit will depend on how resources are to be distributed and who is to decide on theit will depend on how resources are to be distributed and who is to decide on theit will depend on how resources are to be distributed and who is to decide on the

distribution of these resources. May I ask if the Financial Secretary can explaindistribution of these resources. May I ask if the Financial Secretary can explaindistribution of these resources. May I ask if the Financial Secretary can explaindistribution of these resources. May I ask if the Financial Secretary can explain

what kinds of people are defined as less able to look after themselves? Can thosewhat kinds of people are defined as less able to look after themselves? Can thosewhat kinds of people are defined as less able to look after themselves? Can thosewhat kinds of people are defined as less able to look after themselves? Can those

old people who suffer from incontinence, hemiplegia or pamplegia and are unable toold people who suffer from incontinence, hemiplegia or pamplegia and are unable toold people who suffer from incontinence, hemiplegia or pamplegia and are unable toold people who suffer from incontinence, hemiplegia or pamplegia and are unable to

feed themselves be included in this category? Does it cover those severely mentallyfeed themselves be included in this category? Does it cover those severely mentallyfeed themselves be included in this category? Does it cover those severely mentallyfeed themselves be included in this category? Does it cover those severely mentally

handicapped people who can neither control their movement nor feed themselves norhandicapped people who can neither control their movement nor feed themselves norhandicapped people who can neither control their movement nor feed themselves norhandicapped people who can neither control their movement nor feed themselves nor

control their bowels and bladders? However, the Government will only be able to meetcontrol their bowels and bladders? However, the Government will only be able to meetcontrol their bowels and bladders? However, the Government will only be able to meetcontrol their bowels and bladders? However, the Government will only be able to meet

80% of the demand from the elderly for the necessary places in care-and-attention80% of the demand from the elderly for the necessary places in care-and-attention80% of the demand from the elderly for the necessary places in care-and-attention80% of the demand from the elderly for the necessary places in care-and-attention

homes, and 60% of the demand for the sought-after hostel places for the mentallyhomes, and 60% of the demand for the sought-after hostel places for the mentallyhomes, and 60% of the demand for the sought-after hostel places for the mentallyhomes, and 60% of the demand for the sought-after hostel places for the mentally

handicapped by 1995. These unfortunate people who need to wait for a few years beforehandicapped by 1995. These unfortunate people who need to wait for a few years beforehandicapped by 1995. These unfortunate people who need to wait for a few years beforehandicapped by 1995. These unfortunate people who need to wait for a few years before

they can fall into the belated safety net mentioned by the Financial Secretary, afterthey can fall into the belated safety net mentioned by the Financial Secretary, afterthey can fall into the belated safety net mentioned by the Financial Secretary, afterthey can fall into the belated safety net mentioned by the Financial Secretary, after

all, should count themselves lucky because the remaining 20% of the old people andall, should count themselves lucky because the remaining 20% of the old people andall, should count themselves lucky because the remaining 20% of the old people andall, should count themselves lucky because the remaining 20% of the old people and

40% of the mentally handicapped are even more unfortunate as they may not live long40% of the mentally handicapped are even more unfortunate as they may not live long40% of the mentally handicapped are even more unfortunate as they may not live long40% of the mentally handicapped are even more unfortunate as they may not live long

enough to see the completion of the safety net. How can one call this "proper" medicalenough to see the completion of the safety net. How can one call this "proper" medicalenough to see the completion of the safety net. How can one call this "proper" medicalenough to see the completion of the safety net. How can one call this "proper" medical

care? What does the Financial Secretary mean by "proper"? Given the nearly $100care? What does the Financial Secretary mean by "proper"? Given the nearly $100care? What does the Financial Secretary mean by "proper"? Given the nearly $100care? What does the Financial Secretary mean by "proper"? Given the nearly $100

billion fiscal reserves, is it proper for us just to look at these people in agonybillion fiscal reserves, is it proper for us just to look at these people in agonybillion fiscal reserves, is it proper for us just to look at these people in agonybillion fiscal reserves, is it proper for us just to look at these people in agony

without extending a helping hand?without extending a helping hand?without extending a helping hand?without extending a helping hand?

As an elected Legislative Council member from the Kowloon Central Constituency,As an elected Legislative Council member from the Kowloon Central Constituency,As an elected Legislative Council member from the Kowloon Central Constituency,As an elected Legislative Council member from the Kowloon Central Constituency,

I am obliged to speak for the overall interest of this Constituency. The BudgetI am obliged to speak for the overall interest of this Constituency. The BudgetI am obliged to speak for the overall interest of this Constituency. The BudgetI am obliged to speak for the overall interest of this Constituency. The Budget

proposed by the Financial Secretary is unfair to both the grassroots and the sandwichproposed by the Financial Secretary is unfair to both the grassroots and the sandwichproposed by the Financial Secretary is unfair to both the grassroots and the sandwichproposed by the Financial Secretary is unfair to both the grassroots and the sandwich

class and will have undesirable effects on the quality of their lives. The proposedclass and will have undesirable effects on the quality of their lives. The proposedclass and will have undesirable effects on the quality of their lives. The proposedclass and will have undesirable effects on the quality of their lives. The proposed

public expenditure fails to meet the urgent needs of the grassroots with regard topublic expenditure fails to meet the urgent needs of the grassroots with regard topublic expenditure fails to meet the urgent needs of the grassroots with regard topublic expenditure fails to meet the urgent needs of the grassroots with regard to

housing, social welfare, medical and health services and education, nor does it complyhousing, social welfare, medical and health services and education, nor does it complyhousing, social welfare, medical and health services and education, nor does it complyhousing, social welfare, medical and health services and education, nor does it comply

with the principle of returning the wealth to the general public. Inequity is morewith the principle of returning the wealth to the general public. Inequity is morewith the principle of returning the wealth to the general public. Inequity is morewith the principle of returning the wealth to the general public. Inequity is more

worrying than insufficiency. The United Democrats of Hong Kong are not going afterworrying than insufficiency. The United Democrats of Hong Kong are not going afterworrying than insufficiency. The United Democrats of Hong Kong are not going afterworrying than insufficiency. The United Democrats of Hong Kong are not going after

free lunches. Believing in the principle that the harvest one reaps is proportionatefree lunches. Believing in the principle that the harvest one reaps is proportionatefree lunches. Believing in the principle that the harvest one reaps is proportionatefree lunches. Believing in the principle that the harvest one reaps is proportionate

to the effort one has made, we hold the view that the people who have contributedto the effort one has made, we hold the view that the people who have contributedto the effort one has made, we hold the view that the people who have contributedto the effort one has made, we hold the view that the people who have contributed

to the prosperity of Hong Kong should have a fair share of the fruit of their efforts.to the prosperity of Hong Kong should have a fair share of the fruit of their efforts.to the prosperity of Hong Kong should have a fair share of the fruit of their efforts.to the prosperity of Hong Kong should have a fair share of the fruit of their efforts.

I suggest that the Government should introduce capital gains tax and use the revenueI suggest that the Government should introduce capital gains tax and use the revenueI suggest that the Government should introduce capital gains tax and use the revenueI suggest that the Government should introduce capital gains tax and use the revenue

generated from this tax source to subsidize those social services that are in lackgenerated from this tax source to subsidize those social services that are in lackgenerated from this tax source to subsidize those social services that are in lackgenerated from this tax source to subsidize those social services that are in lack

of resources. Besides, this is also a useful measure to curb speculative tradingof resources. Besides, this is also a useful measure to curb speculative tradingof resources. Besides, this is also a useful measure to curb speculative tradingof resources. Besides, this is also a useful measure to curb speculative trading

on property. In levying the capital gains tax, the Government may consider theon property. In levying the capital gains tax, the Government may consider theon property. In levying the capital gains tax, the Government may consider theon property. In levying the capital gains tax, the Government may consider the

following points:following points:following points:following points:

(1)(1)(1)(1) to set the capital gains tax at a rate equivalent to that of the profits tax;to set the capital gains tax at a rate equivalent to that of the profits tax;to set the capital gains tax at a rate equivalent to that of the profits tax;to set the capital gains tax at a rate equivalent to that of the profits tax;

(2)(2)(2)(2) to exempt transaction of owner-occupied flats from capital gains tax;to exempt transaction of owner-occupied flats from capital gains tax;to exempt transaction of owner-occupied flats from capital gains tax;to exempt transaction of owner-occupied flats from capital gains tax;

(3)(3)(3)(3) to grant exemption to flatto grant exemption to flatto grant exemption to flatto grant exemption to flats which have completed their last transfer ofs which have completed their last transfer ofs which have completed their last transfer ofs which have completed their last transfer of

ownership for more than 10 years; andownership for more than 10 years; andownership for more than 10 years; andownership for more than 10 years; and

(4)(4)(4)(4) to readjust the value of the previous transaction price of the flat concernedto readjust the value of the previous transaction price of the flat concernedto readjust the value of the previous transaction price of the flat concernedto readjust the value of the previous transaction price of the flat concerned

according to the cumulative inflationary rate during the period between its last andaccording to the cumulative inflationary rate during the period between its last andaccording to the cumulative inflationary rate during the period between its last andaccording to the cumulative inflationary rate during the period between its last and

recent changes of ownership.recent changes of ownership.recent changes of ownership.recent changes of ownership.

Mr Deputy President, I commend the Financial Secretary on his philosophy toMr Deputy President, I commend the Financial Secretary on his philosophy toMr Deputy President, I commend the Financial Secretary on his philosophy toMr Deputy President, I commend the Financial Secretary on his philosophy to

prepare for the rainy days and agree that his Budget bears a number of features whichprepare for the rainy days and agree that his Budget bears a number of features whichprepare for the rainy days and agree that his Budget bears a number of features whichprepare for the rainy days and agree that his Budget bears a number of features which

include (1) a commitment to drive for economic growth; (2) a commitment to maintaininclude (1) a commitment to drive for economic growth; (2) a commitment to maintaininclude (1) a commitment to drive for economic growth; (2) a commitment to maintaininclude (1) a commitment to drive for economic growth; (2) a commitment to maintain

sound financial management; and (3) a commitment to help those who are most in need.sound financial management; and (3) a commitment to help those who are most in need.sound financial management; and (3) a commitment to help those who are most in need.sound financial management; and (3) a commitment to help those who are most in need.

However, it is a pity that two things are missing in the statement of expenditureHowever, it is a pity that two things are missing in the statement of expenditureHowever, it is a pity that two things are missing in the statement of expenditureHowever, it is a pity that two things are missing in the statement of expenditure

of the Budget, that is, a compass and a timer. Without the compass, the Financialof the Budget, that is, a compass and a timer. Without the compass, the Financialof the Budget, that is, a compass and a timer. Without the compass, the Financialof the Budget, that is, a compass and a timer. Without the compass, the Financial

Secretary will lose his direction in the maze of the "Airport Core Programme"; andSecretary will lose his direction in the maze of the "Airport Core Programme"; andSecretary will lose his direction in the maze of the "Airport Core Programme"; andSecretary will lose his direction in the maze of the "Airport Core Programme"; and

without the timer, he will not be able to finish the safety net for the unfortunatewithout the timer, he will not be able to finish the safety net for the unfortunatewithout the timer, he will not be able to finish the safety net for the unfortunatewithout the timer, he will not be able to finish the safety net for the unfortunate

old and sick before the loss of many more lives which may otherwise be saved if suchold and sick before the loss of many more lives which may otherwise be saved if suchold and sick before the loss of many more lives which may otherwise be saved if suchold and sick before the loss of many more lives which may otherwise be saved if such

a net is provided in time.a net is provided in time.a net is provided in time.a net is provided in time.

Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.

MR MICHAEL HO (in Cantonese): Mr Deputy President, I wish to make a few comments onMR MICHAEL HO (in Cantonese): Mr Deputy President, I wish to make a few comments onMR MICHAEL HO (in Cantonese): Mr Deputy President, I wish to make a few comments onMR MICHAEL HO (in Cantonese): Mr Deputy President, I wish to make a few comments on

those parts of the Budget relating to personal allowance, dependent parent allowancethose parts of the Budget relating to personal allowance, dependent parent allowancethose parts of the Budget relating to personal allowance, dependent parent allowancethose parts of the Budget relating to personal allowance, dependent parent allowance

and dependent children allowance, public spending, and medical spending in particular,and dependent children allowance, public spending, and medical spending in particular,and dependent children allowance, public spending, and medical spending in particular,and dependent children allowance, public spending, and medical spending in particular,

as a representative of the medical and health care functional constituency.as a representative of the medical and health care functional constituency.as a representative of the medical and health care functional constituency.as a representative of the medical and health care functional constituency.

I will, first of all, speak on public spending. The Financial Secretary, in orderI will, first of all, speak on public spending. The Financial Secretary, in orderI will, first of all, speak on public spending. The Financial Secretary, in orderI will, first of all, speak on public spending. The Financial Secretary, in order

to control the expenditure of the public sector, has proposed a 1% reduction of publicto control the expenditure of the public sector, has proposed a 1% reduction of publicto control the expenditure of the public sector, has proposed a 1% reduction of publicto control the expenditure of the public sector, has proposed a 1% reduction of public

spending. While no one will want to query the effective use of resources, one wouldspending. While no one will want to query the effective use of resources, one wouldspending. While no one will want to query the effective use of resources, one wouldspending. While no one will want to query the effective use of resources, one would

find it difficult to accept the slashing of basic services which will have a directfind it difficult to accept the slashing of basic services which will have a directfind it difficult to accept the slashing of basic services which will have a directfind it difficult to accept the slashing of basic services which will have a direct

impact on the well-being of society. It is the view of the United Democrats thatimpact on the well-being of society. It is the view of the United Democrats thatimpact on the well-being of society. It is the view of the United Democrats thatimpact on the well-being of society. It is the view of the United Democrats that

the reduction will directly affect medical and health, education, social welfare andthe reduction will directly affect medical and health, education, social welfare andthe reduction will directly affect medical and health, education, social welfare andthe reduction will directly affect medical and health, education, social welfare and

other basic services, resulting in the aggravation of the already inadequate levelother basic services, resulting in the aggravation of the already inadequate levelother basic services, resulting in the aggravation of the already inadequate levelother basic services, resulting in the aggravation of the already inadequate level

of provision. We believe the provision of social services by the Government is theof provision. We believe the provision of social services by the Government is theof provision. We believe the provision of social services by the Government is theof provision. We believe the provision of social services by the Government is the

key to social stability. Moreover, social services are investments in societykey to social stability. Moreover, social services are investments in societykey to social stability. Moreover, social services are investments in societykey to social stability. Moreover, social services are investments in society

conducive to the economic and social development of Hong Kong. It is for this reasonconducive to the economic and social development of Hong Kong. It is for this reasonconducive to the economic and social development of Hong Kong. It is for this reasonconducive to the economic and social development of Hong Kong. It is for this reason

that the increase in recurrent spending on basic services should not be lower thanthat the increase in recurrent spending on basic services should not be lower thanthat the increase in recurrent spending on basic services should not be lower thanthat the increase in recurrent spending on basic services should not be lower than

the rate of economic growth. It is for this reason that the recurrent spending onthe rate of economic growth. It is for this reason that the recurrent spending onthe rate of economic growth. It is for this reason that the recurrent spending onthe rate of economic growth. It is for this reason that the recurrent spending on

the above five services should grow by 15.4%, of which 10.4% represents the rate ofthe above five services should grow by 15.4%, of which 10.4% represents the rate ofthe above five services should grow by 15.4%, of which 10.4% represents the rate ofthe above five services should grow by 15.4%, of which 10.4% represents the rate of

inflation, and 5% the rate of economic growth. According to this calculation, andinflation, and 5% the rate of economic growth. According to this calculation, andinflation, and 5% the rate of economic growth. According to this calculation, andinflation, and 5% the rate of economic growth. According to this calculation, and

based on the approved Budget of 1991-92, the Government should then allot in thebased on the approved Budget of 1991-92, the Government should then allot in thebased on the approved Budget of 1991-92, the Government should then allot in thebased on the approved Budget of 1991-92, the Government should then allot in the

forthcoming year, in addition to the provisions of the present Budget, an extra $49forthcoming year, in addition to the provisions of the present Budget, an extra $49forthcoming year, in addition to the provisions of the present Budget, an extra $49forthcoming year, in addition to the provisions of the present Budget, an extra $49

million to the Department of Health, an extra $494 million to the Education Department,million to the Department of Health, an extra $494 million to the Education Department,million to the Department of Health, an extra $494 million to the Education Department,million to the Department of Health, an extra $494 million to the Education Department,

and an extra $225 million to the Social Welfare Department.and an extra $225 million to the Social Welfare Department.and an extra $225 million to the Social Welfare Department.and an extra $225 million to the Social Welfare Department.

Insofar as medical spending is concerned, the Government has made it known thatInsofar as medical spending is concerned, the Government has made it known thatInsofar as medical spending is concerned, the Government has made it known thatInsofar as medical spending is concerned, the Government has made it known that

it has a growth rate of 27%. This figure seems to give the public the impressionit has a growth rate of 27%. This figure seems to give the public the impressionit has a growth rate of 27%. This figure seems to give the public the impressionit has a growth rate of 27%. This figure seems to give the public the impression

that a lot of money has been injected into the medical and health services. I havethat a lot of money has been injected into the medical and health services. I havethat a lot of money has been injected into the medical and health services. I havethat a lot of money has been injected into the medical and health services. I have

to stress here that the additional 27% provision is only an illusion and that theto stress here that the additional 27% provision is only an illusion and that theto stress here that the additional 27% provision is only an illusion and that theto stress here that the additional 27% provision is only an illusion and that the

Government is playing with figures. In fact, a provision which has never been partGovernment is playing with figures. In fact, a provision which has never been partGovernment is playing with figures. In fact, a provision which has never been partGovernment is playing with figures. In fact, a provision which has never been part

of the medical account is now under medical spending. We can see that, under medicalof the medical account is now under medical spending. We can see that, under medicalof the medical account is now under medical spending. We can see that, under medicalof the medical account is now under medical spending. We can see that, under medical

spending, $2.4 billion, that is 24.6% of the recurrent expenditure, is the on-costspending, $2.4 billion, that is 24.6% of the recurrent expenditure, is the on-costspending, $2.4 billion, that is 24.6% of the recurrent expenditure, is the on-costspending, $2.4 billion, that is 24.6% of the recurrent expenditure, is the on-cost

of paying staff remuneration. On-cost refers to the costs of pensions, refresherof paying staff remuneration. On-cost refers to the costs of pensions, refresherof paying staff remuneration. On-cost refers to the costs of pensions, refresherof paying staff remuneration. On-cost refers to the costs of pensions, refresher

courses and recruitment advertisements. Such costs have so far been paid for throughcourses and recruitment advertisements. Such costs have so far been paid for throughcourses and recruitment advertisements. Such costs have so far been paid for throughcourses and recruitment advertisements. Such costs have so far been paid for through

"the civil service general expenditure" account. They have never been put under"the civil service general expenditure" account. They have never been put under"the civil service general expenditure" account. They have never been put under"the civil service general expenditure" account. They have never been put under

medical spending until this time around; the $2.4 billion expenditure has now beenmedical spending until this time around; the $2.4 billion expenditure has now beenmedical spending until this time around; the $2.4 billion expenditure has now beenmedical spending until this time around; the $2.4 billion expenditure has now been

transferred from "the civil service general expenditure" account to medical spendingtransferred from "the civil service general expenditure" account to medical spendingtransferred from "the civil service general expenditure" account to medical spendingtransferred from "the civil service general expenditure" account to medical spending

account. This is how we have apparently over $2 billion in extra, but it is in factaccount. This is how we have apparently over $2 billion in extra, but it is in factaccount. This is how we have apparently over $2 billion in extra, but it is in factaccount. This is how we have apparently over $2 billion in extra, but it is in fact

only a numbers game, not at all a substantial increase in medical and health provision.only a numbers game, not at all a substantial increase in medical and health provision.only a numbers game, not at all a substantial increase in medical and health provision.only a numbers game, not at all a substantial increase in medical and health provision.

Meanwhile, if the over 18 000 civil servants should decide this year not to switchMeanwhile, if the over 18 000 civil servants should decide this year not to switchMeanwhile, if the over 18 000 civil servants should decide this year not to switchMeanwhile, if the over 18 000 civil servants should decide this year not to switch

to the employ of the Hospital Authority after all, then $1.2 billion out of the $2.4to the employ of the Hospital Authority after all, then $1.2 billion out of the $2.4to the employ of the Hospital Authority after all, then $1.2 billion out of the $2.4to the employ of the Hospital Authority after all, then $1.2 billion out of the $2.4

billion will have to be returned to the Government. I am now holding a chart whichbillion will have to be returned to the Government. I am now holding a chart whichbillion will have to be returned to the Government. I am now holding a chart whichbillion will have to be returned to the Government. I am now holding a chart which

was distributed to members of the Finance Committee of the Legislative Council bywas distributed to members of the Finance Committee of the Legislative Council bywas distributed to members of the Finance Committee of the Legislative Council bywas distributed to members of the Finance Committee of the Legislative Council by

the Secretary for Health and Welfare at a special meeting which she attended lastthe Secretary for Health and Welfare at a special meeting which she attended lastthe Secretary for Health and Welfare at a special meeting which she attended lastthe Secretary for Health and Welfare at a special meeting which she attended last

week (please refer to the chart). The very tall column representing medical spendingweek (please refer to the chart). The very tall column representing medical spendingweek (please refer to the chart). The very tall column representing medical spendingweek (please refer to the chart). The very tall column representing medical spending

this year includes the $2.4 billion, but if we write off the $2.4 billion, we canthis year includes the $2.4 billion, but if we write off the $2.4 billion, we canthis year includes the $2.4 billion, but if we write off the $2.4 billion, we canthis year includes the $2.4 billion, but if we write off the $2.4 billion, we can

see that the real increase is not that significant. This numbers game creates thesee that the real increase is not that significant. This numbers game creates thesee that the real increase is not that significant. This numbers game creates thesee that the real increase is not that significant. This numbers game creates the

mistaken public perception that the medical and health services have been boostedmistaken public perception that the medical and health services have been boostedmistaken public perception that the medical and health services have been boostedmistaken public perception that the medical and health services have been boosted

by the substantially increased spending; it also misleads the public, and Membersby the substantially increased spending; it also misleads the public, and Membersby the substantially increased spending; it also misleads the public, and Membersby the substantially increased spending; it also misleads the public, and Members

of this Council, into believing that the fringe benefits of the medical staff haveof this Council, into believing that the fringe benefits of the medical staff haveof this Council, into believing that the fringe benefits of the medical staff haveof this Council, into believing that the fringe benefits of the medical staff have

been substantially improved, and the $2.4 billion has been pocketed by the staff.been substantially improved, and the $2.4 billion has been pocketed by the staff.been substantially improved, and the $2.4 billion has been pocketed by the staff.been substantially improved, and the $2.4 billion has been pocketed by the staff.

I have to stress here that spending on fringe benefits of civil servants switchingI have to stress here that spending on fringe benefits of civil servants switchingI have to stress here that spending on fringe benefits of civil servants switchingI have to stress here that spending on fringe benefits of civil servants switching

to the Hospital Authority has remained unchanged, and that there has been no increaseto the Hospital Authority has remained unchanged, and that there has been no increaseto the Hospital Authority has remained unchanged, and that there has been no increaseto the Hospital Authority has remained unchanged, and that there has been no increase

in fringe benefits at all.in fringe benefits at all.in fringe benefits at all.in fringe benefits at all.

Now let us have a look at the spending of the Hospital Authority on manpowerNow let us have a look at the spending of the Hospital Authority on manpowerNow let us have a look at the spending of the Hospital Authority on manpowerNow let us have a look at the spending of the Hospital Authority on manpower

resources. We are all aware that manpower resources are most vital to theresources. We are all aware that manpower resources are most vital to theresources. We are all aware that manpower resources are most vital to theresources. We are all aware that manpower resources are most vital to the

institutional providers of medical and health services because, after all, servicesinstitutional providers of medical and health services because, after all, servicesinstitutional providers of medical and health services because, after all, servicesinstitutional providers of medical and health services because, after all, services

are provided by doctors, nurses and other medical professionals. The adequacy ofare provided by doctors, nurses and other medical professionals. The adequacy ofare provided by doctors, nurses and other medical professionals. The adequacy ofare provided by doctors, nurses and other medical professionals. The adequacy of

services is to a certain degree dependent on the availability of staff. Theservices is to a certain degree dependent on the availability of staff. Theservices is to a certain degree dependent on the availability of staff. Theservices is to a certain degree dependent on the availability of staff. The

Government does not fund the Hospital Authority according to the ratio recommendedGovernment does not fund the Hospital Authority according to the ratio recommendedGovernment does not fund the Hospital Authority according to the ratio recommendedGovernment does not fund the Hospital Authority according to the ratio recommended

by the Medical Development Advisory Committee, nor does it do so according to theby the Medical Development Advisory Committee, nor does it do so according to theby the Medical Development Advisory Committee, nor does it do so according to theby the Medical Development Advisory Committee, nor does it do so according to the

expenditure of the Hospital Authority in terms of paying the 12-month salaries ofexpenditure of the Hospital Authority in terms of paying the 12-month salaries ofexpenditure of the Hospital Authority in terms of paying the 12-month salaries ofexpenditure of the Hospital Authority in terms of paying the 12-month salaries of

its 39 000 employees. The funding is effected on the assumption of a monthly downwardits 39 000 employees. The funding is effected on the assumption of a monthly downwardits 39 000 employees. The funding is effected on the assumption of a monthly downwardits 39 000 employees. The funding is effected on the assumption of a monthly downward

adjustment due to a given proportion of staff wastage, and a lapse of several monthsadjustment due to a given proportion of staff wastage, and a lapse of several monthsadjustment due to a given proportion of staff wastage, and a lapse of several monthsadjustment due to a given proportion of staff wastage, and a lapse of several months

before appointments can be made to bring the establishment back to the 39 000 level.before appointments can be made to bring the establishment back to the 39 000 level.before appointments can be made to bring the establishment back to the 39 000 level.before appointments can be made to bring the establishment back to the 39 000 level.

Put in another way, it is only an average figure and if the wastage rate should fallPut in another way, it is only an average figure and if the wastage rate should fallPut in another way, it is only an average figure and if the wastage rate should fallPut in another way, it is only an average figure and if the wastage rate should fall

in the forthcoming year, the Hospital Authority may not have adequate funds to payin the forthcoming year, the Hospital Authority may not have adequate funds to payin the forthcoming year, the Hospital Authority may not have adequate funds to payin the forthcoming year, the Hospital Authority may not have adequate funds to pay

for the staff remuneration. This funding methodology will effectively mean that,for the staff remuneration. This funding methodology will effectively mean that,for the staff remuneration. This funding methodology will effectively mean that,for the staff remuneration. This funding methodology will effectively mean that,

even if in the forthcoming year, we had several thousand nurses coming back to Hongeven if in the forthcoming year, we had several thousand nurses coming back to Hongeven if in the forthcoming year, we had several thousand nurses coming back to Hongeven if in the forthcoming year, we had several thousand nurses coming back to Hong

Kong from overseas, the Hospital Authority would not have the money to employ them.Kong from overseas, the Hospital Authority would not have the money to employ them.Kong from overseas, the Hospital Authority would not have the money to employ them.Kong from overseas, the Hospital Authority would not have the money to employ them.

In that scenario, the failure of the Tuen Mun Hospital to become fully operationalIn that scenario, the failure of the Tuen Mun Hospital to become fully operationalIn that scenario, the failure of the Tuen Mun Hospital to become fully operationalIn that scenario, the failure of the Tuen Mun Hospital to become fully operational

would not be due to staff shortage, but rather due to inadequate funds to recruitwould not be due to staff shortage, but rather due to inadequate funds to recruitwould not be due to staff shortage, but rather due to inadequate funds to recruitwould not be due to staff shortage, but rather due to inadequate funds to recruit

staff.staff.staff.staff.

Spending on medical and health services has only increased by 2.1%; I doubt verySpending on medical and health services has only increased by 2.1%; I doubt verySpending on medical and health services has only increased by 2.1%; I doubt verySpending on medical and health services has only increased by 2.1%; I doubt very

much how this modest increase can really cope with the expansion of our primary healthmuch how this modest increase can really cope with the expansion of our primary healthmuch how this modest increase can really cope with the expansion of our primary healthmuch how this modest increase can really cope with the expansion of our primary health

services. If expansion cannot be made to such services, then the series ofservices. If expansion cannot be made to such services, then the series ofservices. If expansion cannot be made to such services, then the series ofservices. If expansion cannot be made to such services, then the series of

consultation exercises, full of sound and fury when they were conducted last year,consultation exercises, full of sound and fury when they were conducted last year,consultation exercises, full of sound and fury when they were conducted last year,consultation exercises, full of sound and fury when they were conducted last year,

would become no more than feeble attempts at reform, if not being relegated to somewould become no more than feeble attempts at reform, if not being relegated to somewould become no more than feeble attempts at reform, if not being relegated to somewould become no more than feeble attempts at reform, if not being relegated to some

selective, piecemeal, reforms altogether, under the auspices of the Department ofselective, piecemeal, reforms altogether, under the auspices of the Department ofselective, piecemeal, reforms altogether, under the auspices of the Department ofselective, piecemeal, reforms altogether, under the auspices of the Department of

Health. Should it be the case, then one is prone to ask what is the point of holdingHealth. Should it be the case, then one is prone to ask what is the point of holdingHealth. Should it be the case, then one is prone to ask what is the point of holdingHealth. Should it be the case, then one is prone to ask what is the point of holding

consultations last year. I wish the positive exercises in consultation would notconsultations last year. I wish the positive exercises in consultation would notconsultations last year. I wish the positive exercises in consultation would notconsultations last year. I wish the positive exercises in consultation would not

come to nothing, for lack of funds.come to nothing, for lack of funds.come to nothing, for lack of funds.come to nothing, for lack of funds.

Tax allowances have all along been inadequate to take proper care of the needsTax allowances have all along been inadequate to take proper care of the needsTax allowances have all along been inadequate to take proper care of the needsTax allowances have all along been inadequate to take proper care of the needs

of the middle and lower income groups. With inflation reaching two digits in recentof the middle and lower income groups. With inflation reaching two digits in recentof the middle and lower income groups. With inflation reaching two digits in recentof the middle and lower income groups. With inflation reaching two digits in recent

years, wage increases have lagged behind inflation, and indeed over the past two years,years, wage increases have lagged behind inflation, and indeed over the past two years,years, wage increases have lagged behind inflation, and indeed over the past two years,years, wage increases have lagged behind inflation, and indeed over the past two years,

tax allowances have been adjusted below inflation, resulting in the weakening of thetax allowances have been adjusted below inflation, resulting in the weakening of thetax allowances have been adjusted below inflation, resulting in the weakening of thetax allowances have been adjusted below inflation, resulting in the weakening of the

purchasing power and a decline in the quality of life. In this year's Budget,purchasing power and a decline in the quality of life. In this year's Budget,purchasing power and a decline in the quality of life. In this year's Budget,purchasing power and a decline in the quality of life. In this year's Budget,

personal allowance has been adjusted from $41,000 to $46,000. Although thepersonal allowance has been adjusted from $41,000 to $46,000. Although thepersonal allowance has been adjusted from $41,000 to $46,000. Although thepersonal allowance has been adjusted from $41,000 to $46,000. Although the

adjustment has been enough to cover inflation running at 12%, it is not quite enoughadjustment has been enough to cover inflation running at 12%, it is not quite enoughadjustment has been enough to cover inflation running at 12%, it is not quite enoughadjustment has been enough to cover inflation running at 12%, it is not quite enough

to compensate for the shortfalls accumulated over the years, when the personalto compensate for the shortfalls accumulated over the years, when the personalto compensate for the shortfalls accumulated over the years, when the personalto compensate for the shortfalls accumulated over the years, when the personal

allowance has consistently fallen behind inflation. It is for this reason that theallowance has consistently fallen behind inflation. It is for this reason that theallowance has consistently fallen behind inflation. It is for this reason that theallowance has consistently fallen behind inflation. It is for this reason that the

United Democrats propose a personal allowance of $64,000, to make up for theUnited Democrats propose a personal allowance of $64,000, to make up for theUnited Democrats propose a personal allowance of $64,000, to make up for theUnited Democrats propose a personal allowance of $64,000, to make up for the

shortfalls. We uphold the principle that the Government should not, in the processshortfalls. We uphold the principle that the Government should not, in the processshortfalls. We uphold the principle that the Government should not, in the processshortfalls. We uphold the principle that the Government should not, in the process

of collecting its tax revenue, jeopardize the basic livelihood of the individual.of collecting its tax revenue, jeopardize the basic livelihood of the individual.of collecting its tax revenue, jeopardize the basic livelihood of the individual.of collecting its tax revenue, jeopardize the basic livelihood of the individual.

The UDHK platform for the Legislative Council Election last year stated very clearlyThe UDHK platform for the Legislative Council Election last year stated very clearlyThe UDHK platform for the Legislative Council Election last year stated very clearlyThe UDHK platform for the Legislative Council Election last year stated very clearly

that we would strive for the personal allowance to be adjusted to $57,000 in 1991,that we would strive for the personal allowance to be adjusted to $57,000 in 1991,that we would strive for the personal allowance to be adjusted to $57,000 in 1991,that we would strive for the personal allowance to be adjusted to $57,000 in 1991,

which is equal to $64,000 this year, after 12% inflation. The $57,000 was arrivedwhich is equal to $64,000 this year, after 12% inflation. The $57,000 was arrivedwhich is equal to $64,000 this year, after 12% inflation. The $57,000 was arrivedwhich is equal to $64,000 this year, after 12% inflation. The $57,000 was arrived

at after taking into account the median wage level of $5,500 towards the end of 1990,at after taking into account the median wage level of $5,500 towards the end of 1990,at after taking into account the median wage level of $5,500 towards the end of 1990,at after taking into account the median wage level of $5,500 towards the end of 1990,

and a survey on household expenditure conducted in 1989-90. The available dataand a survey on household expenditure conducted in 1989-90. The available dataand a survey on household expenditure conducted in 1989-90. The available dataand a survey on household expenditure conducted in 1989-90. The available data

indicated that the basic living expenses would take up 87% of the median income. Itindicated that the basic living expenses would take up 87% of the median income. Itindicated that the basic living expenses would take up 87% of the median income. Itindicated that the basic living expenses would take up 87% of the median income. It

is for this reason that it is very reasonable indeed to equate the personal allowanceis for this reason that it is very reasonable indeed to equate the personal allowanceis for this reason that it is very reasonable indeed to equate the personal allowanceis for this reason that it is very reasonable indeed to equate the personal allowance

with the cost of one's basic living expenses, that is, 87% of the median income. Itwith the cost of one's basic living expenses, that is, 87% of the median income. Itwith the cost of one's basic living expenses, that is, 87% of the median income. Itwith the cost of one's basic living expenses, that is, 87% of the median income. It

is the only way the individual will be able to meet his basic living expenses andis the only way the individual will be able to meet his basic living expenses andis the only way the individual will be able to meet his basic living expenses andis the only way the individual will be able to meet his basic living expenses and

be protected from being over-taxed. According to the above data, it is clear thatbe protected from being over-taxed. According to the above data, it is clear thatbe protected from being over-taxed. According to the above data, it is clear thatbe protected from being over-taxed. According to the above data, it is clear that

people with an income of $3,800 per month, though they are required to pay tax, canpeople with an income of $3,800 per month, though they are required to pay tax, canpeople with an income of $3,800 per month, though they are required to pay tax, canpeople with an income of $3,800 per month, though they are required to pay tax, can

hardly make ends meet. Meanwhile, the Financial Secretary has also proposed to drawhardly make ends meet. Meanwhile, the Financial Secretary has also proposed to drawhardly make ends meet. Meanwhile, the Financial Secretary has also proposed to drawhardly make ends meet. Meanwhile, the Financial Secretary has also proposed to draw

into the tax net another 250 000 people, including earners of a monthly salary ofinto the tax net another 250 000 people, including earners of a monthly salary ofinto the tax net another 250 000 people, including earners of a monthly salary ofinto the tax net another 250 000 people, including earners of a monthly salary of

$3,800 and earners of an hourly rate of $16. The United Democrats will also use the$3,800 and earners of an hourly rate of $16. The United Democrats will also use the$3,800 and earners of an hourly rate of $16. The United Democrats will also use the$3,800 and earners of an hourly rate of $16. The United Democrats will also use the

same principle to assess the adequacy of the dependent parent and children allowances.same principle to assess the adequacy of the dependent parent and children allowances.same principle to assess the adequacy of the dependent parent and children allowances.same principle to assess the adequacy of the dependent parent and children allowances.

We hope the Financial Secretary will heed sound advice before the Bill is putWe hope the Financial Secretary will heed sound advice before the Bill is putWe hope the Financial Secretary will heed sound advice before the Bill is putWe hope the Financial Secretary will heed sound advice before the Bill is put

to vote, so that public spending will be increased and personal allowance raised.to vote, so that public spending will be increased and personal allowance raised.to vote, so that public spending will be increased and personal allowance raised.to vote, so that public spending will be increased and personal allowance raised.

The demand of the United Democrats is very reasonable and enjoys wide public support;The demand of the United Democrats is very reasonable and enjoys wide public support;The demand of the United Democrats is very reasonable and enjoys wide public support;The demand of the United Democrats is very reasonable and enjoys wide public support;

the personal allowance of $64,000 is soundly based. It has been suggested that thethe personal allowance of $64,000 is soundly based. It has been suggested that thethe personal allowance of $64,000 is soundly based. It has been suggested that thethe personal allowance of $64,000 is soundly based. It has been suggested that the

Financial Secretary can make commitments for adjustments next year, but it shouldFinancial Secretary can make commitments for adjustments next year, but it shouldFinancial Secretary can make commitments for adjustments next year, but it shouldFinancial Secretary can make commitments for adjustments next year, but it should

be a matter for next year. We are not prepared to accept later adjustments by thebe a matter for next year. We are not prepared to accept later adjustments by thebe a matter for next year. We are not prepared to accept later adjustments by thebe a matter for next year. We are not prepared to accept later adjustments by the

Financial Secretary; we are not prepared to add another voice to the chorus vowingFinancial Secretary; we are not prepared to add another voice to the chorus vowingFinancial Secretary; we are not prepared to add another voice to the chorus vowingFinancial Secretary; we are not prepared to add another voice to the chorus vowing

to fight now for the sandwich class, now for the low income group, but with wordsto fight now for the sandwich class, now for the low income group, but with wordsto fight now for the sandwich class, now for the low income group, but with wordsto fight now for the sandwich class, now for the low income group, but with words

rather than deeds. What other options do we have? The only way Legislativerather than deeds. What other options do we have? The only way Legislativerather than deeds. What other options do we have? The only way Legislativerather than deeds. What other options do we have? The only way Legislative

Councillors can bargain with the Financial Secretary is to vote down the AppropriationCouncillors can bargain with the Financial Secretary is to vote down the AppropriationCouncillors can bargain with the Financial Secretary is to vote down the AppropriationCouncillors can bargain with the Financial Secretary is to vote down the Appropriation

Bill. If the Financial Secretary is not prepared to make any amendments at all, IBill. If the Financial Secretary is not prepared to make any amendments at all, IBill. If the Financial Secretary is not prepared to make any amendments at all, IBill. If the Financial Secretary is not prepared to make any amendments at all, I

believe we are not prepared to support the Appropriation Bill either.believe we are not prepared to support the Appropriation Bill either.believe we are not prepared to support the Appropriation Bill either.believe we are not prepared to support the Appropriation Bill either.

Mr Deputy President, these are my remarMr Deputy President, these are my remarMr Deputy President, these are my remarMr Deputy President, these are my remarks.ks.ks.ks.

DR HUANG CHEN-YA (in Cantonese): Mr Deputy President, the Financial Secretary hasDR HUANG CHEN-YA (in Cantonese): Mr Deputy President, the Financial Secretary hasDR HUANG CHEN-YA (in Cantonese): Mr Deputy President, the Financial Secretary hasDR HUANG CHEN-YA (in Cantonese): Mr Deputy President, the Financial Secretary has

made it abundantly clear in presenting his budgetary strategy that he was onlymade it abundantly clear in presenting his budgetary strategy that he was onlymade it abundantly clear in presenting his budgetary strategy that he was onlymade it abundantly clear in presenting his budgetary strategy that he was only

concerned with the management of public finance, and that he was not attempting toconcerned with the management of public finance, and that he was not attempting toconcerned with the management of public finance, and that he was not attempting toconcerned with the management of public finance, and that he was not attempting to

manipulate macroeconomic variables. It is very difficult to accept his positionmanipulate macroeconomic variables. It is very difficult to accept his positionmanipulate macroeconomic variables. It is very difficult to accept his positionmanipulate macroeconomic variables. It is very difficult to accept his position

because there are three key issues which have been overlooked:because there are three key issues which have been overlooked:because there are three key issues which have been overlooked:because there are three key issues which have been overlooked:

(1)(1)(1)(1) the social and economic impact of the Budget;the social and economic impact of the Budget;the social and economic impact of the Budget;the social and economic impact of the Budget;

(2)(2)(2)(2) the purposthe purposthe purposthe purpose and direction of public resources allocation; ande and direction of public resources allocation; ande and direction of public resources allocation; ande and direction of public resources allocation; and

(3)(3)(3)(3) the equitable distribution of tax burden.the equitable distribution of tax burden.the equitable distribution of tax burden.the equitable distribution of tax burden.

These are not simple accounting issues, but political and economic decisions.These are not simple accounting issues, but political and economic decisions.These are not simple accounting issues, but political and economic decisions.These are not simple accounting issues, but political and economic decisions.

As the United Democrats' spokesman on economic policy, I will comment on thAs the United Democrats' spokesman on economic policy, I will comment on thAs the United Democrats' spokesman on economic policy, I will comment on thAs the United Democrats' spokesman on economic policy, I will comment on theeee

1992-93 Budget from the three perspectives listed above. We take the view that1992-93 Budget from the three perspectives listed above. We take the view that1992-93 Budget from the three perspectives listed above. We take the view that1992-93 Budget from the three perspectives listed above. We take the view that

amendments have to be made to the Budget.amendments have to be made to the Budget.amendments have to be made to the Budget.amendments have to be made to the Budget.

First of all, the Financial Secretary said in his projection of Hong Kong'sFirst of all, the Financial Secretary said in his projection of Hong Kong'sFirst of all, the Financial Secretary said in his projection of Hong Kong'sFirst of all, the Financial Secretary said in his projection of Hong Kong's

economic future that an encouraging trend appeared towards the latter part of 1990economic future that an encouraging trend appeared towards the latter part of 1990economic future that an encouraging trend appeared towards the latter part of 1990economic future that an encouraging trend appeared towards the latter part of 1990

and the prospects for 1992 would continue to be healthy. He predicts that Hong Kongand the prospects for 1992 would continue to be healthy. He predicts that Hong Kongand the prospects for 1992 would continue to be healthy. He predicts that Hong Kongand the prospects for 1992 would continue to be healthy. He predicts that Hong Kong

will have an economic growth of 5%, with inflation hovering at 9.5%. It must bewill have an economic growth of 5%, with inflation hovering at 9.5%. It must bewill have an economic growth of 5%, with inflation hovering at 9.5%. It must bewill have an economic growth of 5%, with inflation hovering at 9.5%. It must be

pointed out that, when compared to our neighbouring countries such as Indonesia,pointed out that, when compared to our neighbouring countries such as Indonesia,pointed out that, when compared to our neighbouring countries such as Indonesia,pointed out that, when compared to our neighbouring countries such as Indonesia,

Malaysia, Singapore, South Korea, Taiwan and Thailand, which have even higherMalaysia, Singapore, South Korea, Taiwan and Thailand, which have even higherMalaysia, Singapore, South Korea, Taiwan and Thailand, which have even higherMalaysia, Singapore, South Korea, Taiwan and Thailand, which have even higher

economic growth rates, our rate of inflation has been more serious, and consistentlyeconomic growth rates, our rate of inflation has been more serious, and consistentlyeconomic growth rates, our rate of inflation has been more serious, and consistentlyeconomic growth rates, our rate of inflation has been more serious, and consistently

so for the past three years. Meanwhile, the manufacturing sector has continued toso for the past three years. Meanwhile, the manufacturing sector has continued toso for the past three years. Meanwhile, the manufacturing sector has continued toso for the past three years. Meanwhile, the manufacturing sector has continued to

relocate to the north; and foreign investment in Hong Kong has continued to fall,relocate to the north; and foreign investment in Hong Kong has continued to fall,relocate to the north; and foreign investment in Hong Kong has continued to fall,relocate to the north; and foreign investment in Hong Kong has continued to fall,

by 4.7% in 1989, and by 11.8% in 1990. By comparison, foreign investment in industryby 4.7% in 1989, and by 11.8% in 1990. By comparison, foreign investment in industryby 4.7% in 1989, and by 11.8% in 1990. By comparison, foreign investment in industryby 4.7% in 1989, and by 11.8% in 1990. By comparison, foreign investment in industry

in Singapore increased by 36% in 1990, and by 4% in the first three quarters of 1991.in Singapore increased by 36% in 1990, and by 4% in the first three quarters of 1991.in Singapore increased by 36% in 1990, and by 4% in the first three quarters of 1991.in Singapore increased by 36% in 1990, and by 4% in the first three quarters of 1991.

It would seem that we have a lot of catching up to do and we should, for one thing,It would seem that we have a lot of catching up to do and we should, for one thing,It would seem that we have a lot of catching up to do and we should, for one thing,It would seem that we have a lot of catching up to do and we should, for one thing,

stop bragging and feeling too good about ourselves. It is indeed disappointing thatstop bragging and feeling too good about ourselves. It is indeed disappointing thatstop bragging and feeling too good about ourselves. It is indeed disappointing thatstop bragging and feeling too good about ourselves. It is indeed disappointing that

the Roman Emperor Nero who was singing while the city of Rome was ablaze shouldthe Roman Emperor Nero who was singing while the city of Rome was ablaze shouldthe Roman Emperor Nero who was singing while the city of Rome was ablaze shouldthe Roman Emperor Nero who was singing while the city of Rome was ablaze should

actually find a sympathizer in the Hong Kong Government. We have completely failedactually find a sympathizer in the Hong Kong Government. We have completely failedactually find a sympathizer in the Hong Kong Government. We have completely failedactually find a sympathizer in the Hong Kong Government. We have completely failed

to see the Budget providing any answer to the problem of low growth and high inflation.to see the Budget providing any answer to the problem of low growth and high inflation.to see the Budget providing any answer to the problem of low growth and high inflation.to see the Budget providing any answer to the problem of low growth and high inflation.

The Government can actually boost economic growth through selective taxation andThe Government can actually boost economic growth through selective taxation andThe Government can actually boost economic growth through selective taxation andThe Government can actually boost economic growth through selective taxation and

spending arrangements. Tax concessions can encourage investment in industrialspending arrangements. Tax concessions can encourage investment in industrialspending arrangements. Tax concessions can encourage investment in industrialspending arrangements. Tax concessions can encourage investment in industrial

research and development and attract foreign investment, enabling the transfer ofresearch and development and attract foreign investment, enabling the transfer ofresearch and development and attract foreign investment, enabling the transfer ofresearch and development and attract foreign investment, enabling the transfer of

technology. Productivity will also be enhanced by investment in manpower training,technology. Productivity will also be enhanced by investment in manpower training,technology. Productivity will also be enhanced by investment in manpower training,technology. Productivity will also be enhanced by investment in manpower training,

in retraining and in general education, improvement in medical and health servicesin retraining and in general education, improvement in medical and health servicesin retraining and in general education, improvement in medical and health servicesin retraining and in general education, improvement in medical and health services

and the provision of better housing and social security. The Productivity Centreand the provision of better housing and social security. The Productivity Centreand the provision of better housing and social security. The Productivity Centreand the provision of better housing and social security. The Productivity Centre

and the Trade Development Council can actually help Hong Kong industry to developand the Trade Development Council can actually help Hong Kong industry to developand the Trade Development Council can actually help Hong Kong industry to developand the Trade Development Council can actually help Hong Kong industry to develop

foreign markets; in particular, they can provide impetus to the development of ourforeign markets; in particular, they can provide impetus to the development of ourforeign markets; in particular, they can provide impetus to the development of ourforeign markets; in particular, they can provide impetus to the development of our

vitally important medium and small enterprises. But there is no mention at all invitally important medium and small enterprises. But there is no mention at all invitally important medium and small enterprises. But there is no mention at all invitally important medium and small enterprises. But there is no mention at all in

the Budget regarding tax concessions. Indeed, the provisions for the Industrythe Budget regarding tax concessions. Indeed, the provisions for the Industrythe Budget regarding tax concessions. Indeed, the provisions for the Industrythe Budget regarding tax concessions. Indeed, the provisions for the Industry

Department and the Productivity Centre, and for education generally, have in factDepartment and the Productivity Centre, and for education generally, have in factDepartment and the Productivity Centre, and for education generally, have in factDepartment and the Productivity Centre, and for education generally, have in fact

experienced negative growth.experienced negative growth.experienced negative growth.experienced negative growth.

Inflation has an impact on the economy as a whole, and the tourist industry isInflation has an impact on the economy as a whole, and the tourist industry isInflation has an impact on the economy as a whole, and the tourist industry isInflation has an impact on the economy as a whole, and the tourist industry is

particularly hard hit. It goes without saying that the quality of life for the commonparticularly hard hit. It goes without saying that the quality of life for the commonparticularly hard hit. It goes without saying that the quality of life for the commonparticularly hard hit. It goes without saying that the quality of life for the common

people is declining. The Government has not been able to come up with anything topeople is declining. The Government has not been able to come up with anything topeople is declining. The Government has not been able to come up with anything topeople is declining. The Government has not been able to come up with anything to

combat inflation, and indeed the abolition of the 25% limit while increasing ratescombat inflation, and indeed the abolition of the 25% limit while increasing ratescombat inflation, and indeed the abolition of the 25% limit while increasing ratescombat inflation, and indeed the abolition of the 25% limit while increasing rates

will only further aggravate inflation. The Financial Secretary takes the view thatwill only further aggravate inflation. The Financial Secretary takes the view thatwill only further aggravate inflation. The Financial Secretary takes the view thatwill only further aggravate inflation. The Financial Secretary takes the view that

the 0.5% increase of property rates will only push up inflation slightly. This isthe 0.5% increase of property rates will only push up inflation slightly. This isthe 0.5% increase of property rates will only push up inflation slightly. This isthe 0.5% increase of property rates will only push up inflation slightly. This is

clearly an under-estimation of the inflationary impact. We realize now that theclearly an under-estimation of the inflationary impact. We realize now that theclearly an under-estimation of the inflationary impact. We realize now that theclearly an under-estimation of the inflationary impact. We realize now that the

abolition of the limit will actually push rates up by 7% for some properties.abolition of the limit will actually push rates up by 7% for some properties.abolition of the limit will actually push rates up by 7% for some properties.abolition of the limit will actually push rates up by 7% for some properties.

Inflation definitely will rise more than 0.01%. My UDHK colleagues will each giveInflation definitely will rise more than 0.01%. My UDHK colleagues will each giveInflation definitely will rise more than 0.01%. My UDHK colleagues will each giveInflation definitely will rise more than 0.01%. My UDHK colleagues will each give

a blow-by-blow analysis in their critique of the allocation of public resources. Thea blow-by-blow analysis in their critique of the allocation of public resources. Thea blow-by-blow analysis in their critique of the allocation of public resources. Thea blow-by-blow analysis in their critique of the allocation of public resources. The

position of UDHK has consistently been that annual increase in government spendingposition of UDHK has consistently been that annual increase in government spendingposition of UDHK has consistently been that annual increase in government spendingposition of UDHK has consistently been that annual increase in government spending

relating to the improvement of people's livelihood and social investment, such asrelating to the improvement of people's livelihood and social investment, such asrelating to the improvement of people's livelihood and social investment, such asrelating to the improvement of people's livelihood and social investment, such as

spending on medical and health services, social welfare, education and housing,spending on medical and health services, social welfare, education and housing,spending on medical and health services, social welfare, education and housing,spending on medical and health services, social welfare, education and housing,

should not be lower than the rate of economic growth. The Government and theshould not be lower than the rate of economic growth. The Government and theshould not be lower than the rate of economic growth. The Government and theshould not be lower than the rate of economic growth. The Government and the

industrial and business sector have always argued that economic progress will benefitindustrial and business sector have always argued that economic progress will benefitindustrial and business sector have always argued that economic progress will benefitindustrial and business sector have always argued that economic progress will benefit

everyone. But according to a study conducted by the World Bank, while economic growtheveryone. But according to a study conducted by the World Bank, while economic growtheveryone. But according to a study conducted by the World Bank, while economic growtheveryone. But according to a study conducted by the World Bank, while economic growth

may reduce absolute poverty, it is impotent as a means of narrowing the gap betweenmay reduce absolute poverty, it is impotent as a means of narrowing the gap betweenmay reduce absolute poverty, it is impotent as a means of narrowing the gap betweenmay reduce absolute poverty, it is impotent as a means of narrowing the gap between

the rich and the poor. The prosperity of Hong Kong in recent years has resulted inthe rich and the poor. The prosperity of Hong Kong in recent years has resulted inthe rich and the poor. The prosperity of Hong Kong in recent years has resulted inthe rich and the poor. The prosperity of Hong Kong in recent years has resulted in

the escalation of the Gini Coefficient. This supports the conclusion of the Worldthe escalation of the Gini Coefficient. This supports the conclusion of the Worldthe escalation of the Gini Coefficient. This supports the conclusion of the Worldthe escalation of the Gini Coefficient. This supports the conclusion of the World

Bank finding and proves at the same time that the market economy may falter. It isBank finding and proves at the same time that the market economy may falter. It isBank finding and proves at the same time that the market economy may falter. It isBank finding and proves at the same time that the market economy may falter. It is

for this reason that we have to increase our spending on medical and health services,for this reason that we have to increase our spending on medical and health services,for this reason that we have to increase our spending on medical and health services,for this reason that we have to increase our spending on medical and health services,

education, public housing and social welfare, all of which, we must remember, areeducation, public housing and social welfare, all of which, we must remember, areeducation, public housing and social welfare, all of which, we must remember, areeducation, public housing and social welfare, all of which, we must remember, are

key factors which enable us to achieve economic growth.key factors which enable us to achieve economic growth.key factors which enable us to achieve economic growth.key factors which enable us to achieve economic growth.

We consider it unwise to allow negative growth in these important departments.We consider it unwise to allow negative growth in these important departments.We consider it unwise to allow negative growth in these important departments.We consider it unwise to allow negative growth in these important departments.

We demand that spending in these key areas be increased by 15.5% over last year. WeWe demand that spending in these key areas be increased by 15.5% over last year. WeWe demand that spending in these key areas be increased by 15.5% over last year. WeWe demand that spending in these key areas be increased by 15.5% over last year. We

understand that the Government has to maintain adequate reserves for the buildingunderstand that the Government has to maintain adequate reserves for the buildingunderstand that the Government has to maintain adequate reserves for the buildingunderstand that the Government has to maintain adequate reserves for the building

of the mammoth airport project and leave 25 billion to the SAR Government. But isof the mammoth airport project and leave 25 billion to the SAR Government. But isof the mammoth airport project and leave 25 billion to the SAR Government. But isof the mammoth airport project and leave 25 billion to the SAR Government. But is

our present financial position such that we cannot afford to allocate $3 billion toour present financial position such that we cannot afford to allocate $3 billion toour present financial position such that we cannot afford to allocate $3 billion toour present financial position such that we cannot afford to allocate $3 billion to

these key areas? Why cannot we take $3 billion out of the $7.8 billion earmarkedthese key areas? Why cannot we take $3 billion out of the $7.8 billion earmarkedthese key areas? Why cannot we take $3 billion out of the $7.8 billion earmarkedthese key areas? Why cannot we take $3 billion out of the $7.8 billion earmarked

for unspecified miscellaneous spending so that these key areas can enjoy real growth?for unspecified miscellaneous spending so that these key areas can enjoy real growth?for unspecified miscellaneous spending so that these key areas can enjoy real growth?for unspecified miscellaneous spending so that these key areas can enjoy real growth?

Is it the intention to let the money accumulate to a surplus, again, in the BudgetIs it the intention to let the money accumulate to a surplus, again, in the BudgetIs it the intention to let the money accumulate to a surplus, again, in the BudgetIs it the intention to let the money accumulate to a surplus, again, in the Budget

next year? We believe that the Government can, and should, provide the money fornext year? We believe that the Government can, and should, provide the money fornext year? We believe that the Government can, and should, provide the money fornext year? We believe that the Government can, and should, provide the money for

spending on these key areas. We believe that the spending on the airport projectspending on these key areas. We believe that the spending on the airport projectspending on these key areas. We believe that the spending on the airport projectspending on these key areas. We believe that the spending on the airport project

should not preclude public spending in other areas. We believe that long-termshould not preclude public spending in other areas. We believe that long-termshould not preclude public spending in other areas. We believe that long-termshould not preclude public spending in other areas. We believe that long-term

interests should not be sacrificed for the sake of short-term needs if we do not wishinterests should not be sacrificed for the sake of short-term needs if we do not wishinterests should not be sacrificed for the sake of short-term needs if we do not wishinterests should not be sacrificed for the sake of short-term needs if we do not wish

to pay in the future the huge cost of repairing the damage done.to pay in the future the huge cost of repairing the damage done.to pay in the future the huge cost of repairing the damage done.to pay in the future the huge cost of repairing the damage done.

From the perspective of equitable distribuFrom the perspective of equitable distribuFrom the perspective of equitable distribuFrom the perspective of equitable distribution of the tax burden, we can see that,tion of the tax burden, we can see that,tion of the tax burden, we can see that,tion of the tax burden, we can see that,

over the past ten years, the contribution of corporate profits tax to the direct taxover the past ten years, the contribution of corporate profits tax to the direct taxover the past ten years, the contribution of corporate profits tax to the direct taxover the past ten years, the contribution of corporate profits tax to the direct tax

yield has declined from 56.5% to 52.4%, while the contribution of income tax hasyield has declined from 56.5% to 52.4%, while the contribution of income tax hasyield has declined from 56.5% to 52.4%, while the contribution of income tax hasyield has declined from 56.5% to 52.4%, while the contribution of income tax has

increased from 16% to 36.1%. It is clear that the past decade has seen the tax burdenincreased from 16% to 36.1%. It is clear that the past decade has seen the tax burdenincreased from 16% to 36.1%. It is clear that the past decade has seen the tax burdenincreased from 16% to 36.1%. It is clear that the past decade has seen the tax burden

falling more and more on the man in the street. The United Democrats are in favourfalling more and more on the man in the street. The United Democrats are in favourfalling more and more on the man in the street. The United Democrats are in favourfalling more and more on the man in the street. The United Democrats are in favour

of increasing the corporate profits tax by 1% in order that the tax burden will becomeof increasing the corporate profits tax by 1% in order that the tax burden will becomeof increasing the corporate profits tax by 1% in order that the tax burden will becomeof increasing the corporate profits tax by 1% in order that the tax burden will become

more equitable and just without jeopardizing the competitiveness of our industry andmore equitable and just without jeopardizing the competitiveness of our industry andmore equitable and just without jeopardizing the competitiveness of our industry andmore equitable and just without jeopardizing the competitiveness of our industry and

trade. Fear has been expressed in some quarters that profits tax might be increasedtrade. Fear has been expressed in some quarters that profits tax might be increasedtrade. Fear has been expressed in some quarters that profits tax might be increasedtrade. Fear has been expressed in some quarters that profits tax might be increased

each year to the detriment of the desire to invest. To allay such unnecessary fears,each year to the detriment of the desire to invest. To allay such unnecessary fears,each year to the detriment of the desire to invest. To allay such unnecessary fears,each year to the detriment of the desire to invest. To allay such unnecessary fears,

the Financial Secretary should widen the tax base and explore more sources of taxationthe Financial Secretary should widen the tax base and explore more sources of taxationthe Financial Secretary should widen the tax base and explore more sources of taxationthe Financial Secretary should widen the tax base and explore more sources of taxation

which are fair and reliable. The United Democrats take the view that a capital gainswhich are fair and reliable. The United Democrats take the view that a capital gainswhich are fair and reliable. The United Democrats take the view that a capital gainswhich are fair and reliable. The United Democrats take the view that a capital gains

tax should be levied on property. It is going to be a reliable source of tax revenue.tax should be levied on property. It is going to be a reliable source of tax revenue.tax should be levied on property. It is going to be a reliable source of tax revenue.tax should be levied on property. It is going to be a reliable source of tax revenue.

It will dampen property speculation and stabilize property prices. It will not addIt will dampen property speculation and stabilize property prices. It will not addIt will dampen property speculation and stabilize property prices. It will not addIt will dampen property speculation and stabilize property prices. It will not add

to the burden of the middle class and the grassroots. It will in fact reduce theto the burden of the middle class and the grassroots. It will in fact reduce theto the burden of the middle class and the grassroots. It will in fact reduce theto the burden of the middle class and the grassroots. It will in fact reduce the

burden of the middle income group in purchasing their residential properties.burden of the middle income group in purchasing their residential properties.burden of the middle income group in purchasing their residential properties.burden of the middle income group in purchasing their residential properties.

On the issue of income tax, the United Democrats takOn the issue of income tax, the United Democrats takOn the issue of income tax, the United Democrats takOn the issue of income tax, the United Democrats take the view that the middlee the view that the middlee the view that the middlee the view that the middle

and lower income groups should not be subjected to further increases. In each ofand lower income groups should not be subjected to further increases. In each ofand lower income groups should not be subjected to further increases. In each ofand lower income groups should not be subjected to further increases. In each of

the past three years we have seen 20% more people than the year before being drawnthe past three years we have seen 20% more people than the year before being drawnthe past three years we have seen 20% more people than the year before being drawnthe past three years we have seen 20% more people than the year before being drawn

into the tax net. This does not mean that there has been an amazing growth in theinto the tax net. This does not mean that there has been an amazing growth in theinto the tax net. This does not mean that there has been an amazing growth in theinto the tax net. This does not mean that there has been an amazing growth in the

real income of Hong Kong people, only that the personal allowance has not been adjustedreal income of Hong Kong people, only that the personal allowance has not been adjustedreal income of Hong Kong people, only that the personal allowance has not been adjustedreal income of Hong Kong people, only that the personal allowance has not been adjusted

in line with inflation. Presently, even people on a monthly income of under $4,000in line with inflation. Presently, even people on a monthly income of under $4,000in line with inflation. Presently, even people on a monthly income of under $4,000in line with inflation. Presently, even people on a monthly income of under $4,000

have to pay tax. The Financial Secretary claims that this only implies that halfhave to pay tax. The Financial Secretary claims that this only implies that halfhave to pay tax. The Financial Secretary claims that this only implies that halfhave to pay tax. The Financial Secretary claims that this only implies that half

of our working population are taxpayers and he sees nothing wrong with that. Theof our working population are taxpayers and he sees nothing wrong with that. Theof our working population are taxpayers and he sees nothing wrong with that. Theof our working population are taxpayers and he sees nothing wrong with that. The

fact is that presently 25% of our population are taxpayers, a percentage which isfact is that presently 25% of our population are taxpayers, a percentage which isfact is that presently 25% of our population are taxpayers, a percentage which isfact is that presently 25% of our population are taxpayers, a percentage which is

close to that in Japan but higher than that in other developing countries. Theclose to that in Japan but higher than that in other developing countries. Theclose to that in Japan but higher than that in other developing countries. Theclose to that in Japan but higher than that in other developing countries. The

proportion of our income tax to GNP, which stands at 3%, is higher than that in Southproportion of our income tax to GNP, which stands at 3%, is higher than that in Southproportion of our income tax to GNP, which stands at 3%, is higher than that in Southproportion of our income tax to GNP, which stands at 3%, is higher than that in South

Korea, Malaysia, Thailand, and even Switzerland. It is in this context that theKorea, Malaysia, Thailand, and even Switzerland. It is in this context that theKorea, Malaysia, Thailand, and even Switzerland. It is in this context that theKorea, Malaysia, Thailand, and even Switzerland. It is in this context that the

continued attempt to increase the tax burden on salary-earners cannot be supported.continued attempt to increase the tax burden on salary-earners cannot be supported.continued attempt to increase the tax burden on salary-earners cannot be supported.continued attempt to increase the tax burden on salary-earners cannot be supported.

The United Democrats believe that the personal allowance should be raised toThe United Democrats believe that the personal allowance should be raised toThe United Democrats believe that the personal allowance should be raised toThe United Democrats believe that the personal allowance should be raised to

$64,000, for reasons which Mr Michael HO has already stated, and which other$64,000, for reasons which Mr Michael HO has already stated, and which other$64,000, for reasons which Mr Michael HO has already stated, and which other$64,000, for reasons which Mr Michael HO has already stated, and which other

colleagues will also discuss when they speak. We believe that it is not reasonablecolleagues will also discuss when they speak. We believe that it is not reasonablecolleagues will also discuss when they speak. We believe that it is not reasonablecolleagues will also discuss when they speak. We believe that it is not reasonable

for the Financial Secretary to raise the personal allowance to $46,000 merely to coverfor the Financial Secretary to raise the personal allowance to $46,000 merely to coverfor the Financial Secretary to raise the personal allowance to $46,000 merely to coverfor the Financial Secretary to raise the personal allowance to $46,000 merely to cover

last year's inflation, because the adjustment has failed to take account of lowlast year's inflation, because the adjustment has failed to take account of lowlast year's inflation, because the adjustment has failed to take account of lowlast year's inflation, because the adjustment has failed to take account of low

personal allowance which has persisted over the years. Real wages fell by 1% lastpersonal allowance which has persisted over the years. Real wages fell by 1% lastpersonal allowance which has persisted over the years. Real wages fell by 1% lastpersonal allowance which has persisted over the years. Real wages fell by 1% last

year but the number of taxpayers have increased by 20%. It can be seen hence thatyear but the number of taxpayers have increased by 20%. It can be seen hence thatyear but the number of taxpayers have increased by 20%. It can be seen hence thatyear but the number of taxpayers have increased by 20%. It can be seen hence that

the failure to adjust the personal allowance has effectively drawn many more lowthe failure to adjust the personal allowance has effectively drawn many more lowthe failure to adjust the personal allowance has effectively drawn many more lowthe failure to adjust the personal allowance has effectively drawn many more low

income salary-earners into the tax net.income salary-earners into the tax net.income salary-earners into the tax net.income salary-earners into the tax net.

Meanwhile, non-adjustment this year of the tax band will draw even more Meanwhile, non-adjustment this year of the tax band will draw even more Meanwhile, non-adjustment this year of the tax band will draw even more Meanwhile, non-adjustment this year of the tax band will draw even more peoplepeoplepeoplepeople

into the tax net. This will further aggravate the tax burden on the middle incomeinto the tax net. This will further aggravate the tax burden on the middle incomeinto the tax net. This will further aggravate the tax burden on the middle incomeinto the tax net. This will further aggravate the tax burden on the middle income

group. It is the view of the United Democrats that the tax band should be widenedgroup. It is the view of the United Democrats that the tax band should be widenedgroup. It is the view of the United Democrats that the tax band should be widenedgroup. It is the view of the United Democrats that the tax band should be widened

so that the marginal rate of 25% will be done away with. The standard rate of 15%so that the marginal rate of 25% will be done away with. The standard rate of 15%so that the marginal rate of 25% will be done away with. The standard rate of 15%so that the marginal rate of 25% will be done away with. The standard rate of 15%

should also be abolished. This will lessen the tax burden on people with monthlyshould also be abolished. This will lessen the tax burden on people with monthlyshould also be abolished. This will lessen the tax burden on people with monthlyshould also be abolished. This will lessen the tax burden on people with monthly

income between $10,000 and $50,000 and enable them to have more money to develop theirincome between $10,000 and $50,000 and enable them to have more money to develop theirincome between $10,000 and $50,000 and enable them to have more money to develop theirincome between $10,000 and $50,000 and enable them to have more money to develop their

careers. We feel that the tax burden should be divided equitably and reasonably suchcareers. We feel that the tax burden should be divided equitably and reasonably suchcareers. We feel that the tax burden should be divided equitably and reasonably suchcareers. We feel that the tax burden should be divided equitably and reasonably such

that people will find it easier to save and accumulate wealth and have less need forthat people will find it easier to save and accumulate wealth and have less need forthat people will find it easier to save and accumulate wealth and have less need forthat people will find it easier to save and accumulate wealth and have less need for

and dependence on public services. The Government likes to say that there is no needand dependence on public services. The Government likes to say that there is no needand dependence on public services. The Government likes to say that there is no needand dependence on public services. The Government likes to say that there is no need

to levy a capital gains tax on property because property speculators are made to payto levy a capital gains tax on property because property speculators are made to payto levy a capital gains tax on property because property speculators are made to payto levy a capital gains tax on property because property speculators are made to pay

profits tax. But at the same time the Government says it is difficult to identifyprofits tax. But at the same time the Government says it is difficult to identifyprofits tax. But at the same time the Government says it is difficult to identifyprofits tax. But at the same time the Government says it is difficult to identify

the speculators. Why cannot the Government act positively to tax the speculatorsthe speculators. Why cannot the Government act positively to tax the speculatorsthe speculators. Why cannot the Government act positively to tax the speculatorsthe speculators. Why cannot the Government act positively to tax the speculators

instead of making a scapegoat of the hardworking and law-abiding citizens?instead of making a scapegoat of the hardworking and law-abiding citizens?instead of making a scapegoat of the hardworking and law-abiding citizens?instead of making a scapegoat of the hardworking and law-abiding citizens?

Mr Deputy PresiMr Deputy PresiMr Deputy PresiMr Deputy President, I would like to sum up here that the Budget has failed todent, I would like to sum up here that the Budget has failed todent, I would like to sum up here that the Budget has failed todent, I would like to sum up here that the Budget has failed to

aid our economic growth positively, nor is it capable of combating inflation. Itaid our economic growth positively, nor is it capable of combating inflation. Itaid our economic growth positively, nor is it capable of combating inflation. Itaid our economic growth positively, nor is it capable of combating inflation. It

does not take care of the middle income group who are hard pressed by the tax burden.does not take care of the middle income group who are hard pressed by the tax burden.does not take care of the middle income group who are hard pressed by the tax burden.does not take care of the middle income group who are hard pressed by the tax burden.

It fails to narrow the gap between the rich and the poor; it does not provide adequateIt fails to narrow the gap between the rich and the poor; it does not provide adequateIt fails to narrow the gap between the rich and the poor; it does not provide adequateIt fails to narrow the gap between the rich and the poor; it does not provide adequate

public resources to increase the upward mobility of the lower income group. Whatpublic resources to increase the upward mobility of the lower income group. Whatpublic resources to increase the upward mobility of the lower income group. Whatpublic resources to increase the upward mobility of the lower income group. What

it has done is to drag them into the tax net and increase their dependence on publicit has done is to drag them into the tax net and increase their dependence on publicit has done is to drag them into the tax net and increase their dependence on publicit has done is to drag them into the tax net and increase their dependence on public

services. It is for this reason that UDHK ask yet again the Financial Secretary toservices. It is for this reason that UDHK ask yet again the Financial Secretary toservices. It is for this reason that UDHK ask yet again the Financial Secretary toservices. It is for this reason that UDHK ask yet again the Financial Secretary to

amend the Budget along the following lines:amend the Budget along the following lines:amend the Budget along the following lines:amend the Budget along the following lines:

(1)(1)(1)(1) The personal allowance of the income tax should be raised;The personal allowance of the income tax should be raised;The personal allowance of the income tax should be raised;The personal allowance of the income tax should be raised;

(2)(2)(2)(2) The tax band should be widened while the marginal rate of 25% and the standardThe tax band should be widened while the marginal rate of 25% and the standardThe tax band should be widened while the marginal rate of 25% and the standardThe tax band should be widened while the marginal rate of 25% and the standard

rate of 15% should be abolished;rate of 15% should be abolished;rate of 15% should be abolished;rate of 15% should be abolished;

(3)(3)(3)(3) The proposed rates increases should be abolished and the rates relief schemeThe proposed rates increases should be abolished and the rates relief schemeThe proposed rates increases should be abolished and the rates relief schemeThe proposed rates increases should be abolished and the rates relief scheme

should be continued;should be continued;should be continued;should be continued;

(4)(4)(4)(4) The growth in recurrent spending on key public services should be kept atThe growth in recurrent spending on key public services should be kept atThe growth in recurrent spending on key public services should be kept atThe growth in recurrent spending on key public services should be kept at

a rate of not less than 15.5%.a rate of not less than 15.5%.a rate of not less than 15.5%.a rate of not less than 15.5%.

Mr DeputyMr DeputyMr DeputyMr Deputy President, it might well be the case that the Financial Secretary has, President, it might well be the case that the Financial Secretary has, President, it might well be the case that the Financial Secretary has, President, it might well be the case that the Financial Secretary has,

as he has said, done his best. This Budget, compared with the previous Budgets, mayas he has said, done his best. This Budget, compared with the previous Budgets, mayas he has said, done his best. This Budget, compared with the previous Budgets, mayas he has said, done his best. This Budget, compared with the previous Budgets, may

not be particularly bad. But we have to move ahead with times. Hong Kong peoplenot be particularly bad. But we have to move ahead with times. Hong Kong peoplenot be particularly bad. But we have to move ahead with times. Hong Kong peoplenot be particularly bad. But we have to move ahead with times. Hong Kong people

should be entitled to a better Budget. Hong Kong needs a Budget which will meet itsshould be entitled to a better Budget. Hong Kong needs a Budget which will meet itsshould be entitled to a better Budget. Hong Kong needs a Budget which will meet itsshould be entitled to a better Budget. Hong Kong needs a Budget which will meet its

present needs. It is unfortunate that I cannot agree to the Budget in its presentpresent needs. It is unfortunate that I cannot agree to the Budget in its presentpresent needs. It is unfortunate that I cannot agree to the Budget in its presentpresent needs. It is unfortunate that I cannot agree to the Budget in its present

shape. Therefore, unless amendments are made, the United Democrats are unable toshape. Therefore, unless amendments are made, the United Democrats are unable toshape. Therefore, unless amendments are made, the United Democrats are unable toshape. Therefore, unless amendments are made, the United Democrats are unable to

support it.support it.support it.support it.

MR SIMON IP: Mr Deputy President, I believe that the Financial Secretary hasMR SIMON IP: Mr Deputy President, I believe that the Financial Secretary hasMR SIMON IP: Mr Deputy President, I believe that the Financial Secretary hasMR SIMON IP: Mr Deputy President, I believe that the Financial Secretary has

demonstrated through the Budget his commitment to continuing Hong Kong's economicdemonstrated through the Budget his commitment to continuing Hong Kong's economicdemonstrated through the Budget his commitment to continuing Hong Kong's economicdemonstrated through the Budget his commitment to continuing Hong Kong's economic

growth and his belief in maintaining sound financial management.growth and his belief in maintaining sound financial management.growth and his belief in maintaining sound financial management.growth and his belief in maintaining sound financial management.

However, I do have some concerns and I However, I do have some concerns and I However, I do have some concerns and I However, I do have some concerns and I wish to join some of my fellow Councillorswish to join some of my fellow Councillorswish to join some of my fellow Councillorswish to join some of my fellow Councillors

in calling for certain revisions to the Budget.in calling for certain revisions to the Budget.in calling for certain revisions to the Budget.in calling for certain revisions to the Budget.

First, I believe the Budget should offer greater tax relief to middle and lowerFirst, I believe the Budget should offer greater tax relief to middle and lowerFirst, I believe the Budget should offer greater tax relief to middle and lowerFirst, I believe the Budget should offer greater tax relief to middle and lower

income earners. Given continuing inflation, spiralling property prices andincome earners. Given continuing inflation, spiralling property prices andincome earners. Given continuing inflation, spiralling property prices andincome earners. Given continuing inflation, spiralling property prices and

relatively high interest rates, certain members of our community deserve help if theyrelatively high interest rates, certain members of our community deserve help if theyrelatively high interest rates, certain members of our community deserve help if theyrelatively high interest rates, certain members of our community deserve help if they

are not to see their disposable income and standard of living continually eroded.are not to see their disposable income and standard of living continually eroded.are not to see their disposable income and standard of living continually eroded.are not to see their disposable income and standard of living continually eroded.

I urge the Financial Secretary to review his proposals in this area with a view toI urge the Financial Secretary to review his proposals in this area with a view toI urge the Financial Secretary to review his proposals in this area with a view toI urge the Financial Secretary to review his proposals in this area with a view to

increasing personal allowances and tax bands.increasing personal allowances and tax bands.increasing personal allowances and tax bands.increasing personal allowances and tax bands.

Secondly, I suggest that the Financial Secretary should reconsider maintainingSecondly, I suggest that the Financial Secretary should reconsider maintainingSecondly, I suggest that the Financial Secretary should reconsider maintainingSecondly, I suggest that the Financial Secretary should reconsider maintaining

property rates at the current 5.5%. Although the Financial Secretary points out thatproperty rates at the current 5.5%. Although the Financial Secretary points out thatproperty rates at the current 5.5%. Although the Financial Secretary points out thatproperty rates at the current 5.5%. Although the Financial Secretary points out that

the percentage rate is historically low, the fact is that the amount of rates beingthe percentage rate is historically low, the fact is that the amount of rates beingthe percentage rate is historically low, the fact is that the amount of rates beingthe percentage rate is historically low, the fact is that the amount of rates being

paid has increased in real terms because of higher property prices and thus higherpaid has increased in real terms because of higher property prices and thus higherpaid has increased in real terms because of higher property prices and thus higherpaid has increased in real terms because of higher property prices and thus higher

rental values.rental values.rental values.rental values.

In addition to these two requests to benefit the "sandwich class", I would alsoIn addition to these two requests to benefit the "sandwich class", I would alsoIn addition to these two requests to benefit the "sandwich class", I would alsoIn addition to these two requests to benefit the "sandwich class", I would also

like the Financial Secretary to reconsider the budget for the police force.like the Financial Secretary to reconsider the budget for the police force.like the Financial Secretary to reconsider the budget for the police force.like the Financial Secretary to reconsider the budget for the police force.

The Financial Secretary has said that the police have been given all the fundsThe Financial Secretary has said that the police have been given all the fundsThe Financial Secretary has said that the police have been given all the fundsThe Financial Secretary has said that the police have been given all the funds

they need to do the job, but we hear conflicting reports that the force is underthey need to do the job, but we hear conflicting reports that the force is underthey need to do the job, but we hear conflicting reports that the force is underthey need to do the job, but we hear conflicting reports that the force is under

strength and overstretched. Requests for more funding seem to be grinding slowlystrength and overstretched. Requests for more funding seem to be grinding slowlystrength and overstretched. Requests for more funding seem to be grinding slowlystrength and overstretched. Requests for more funding seem to be grinding slowly

through the bureaucratic mill creating frustration and dissatisfaction in the force.through the bureaucratic mill creating frustration and dissatisfaction in the force.through the bureaucratic mill creating frustration and dissatisfaction in the force.through the bureaucratic mill creating frustration and dissatisfaction in the force.

It is essential that we ensure the force has available to it all means necessaryIt is essential that we ensure the force has available to it all means necessaryIt is essential that we ensure the force has available to it all means necessaryIt is essential that we ensure the force has available to it all means necessary

to cope with rising crime, especially those involving the use of violence and firearms.to cope with rising crime, especially those involving the use of violence and firearms.to cope with rising crime, especially those involving the use of violence and firearms.to cope with rising crime, especially those involving the use of violence and firearms.

Better pay and conditions are needed to enhance recruitment and retention of officers,Better pay and conditions are needed to enhance recruitment and retention of officers,Better pay and conditions are needed to enhance recruitment and retention of officers,Better pay and conditions are needed to enhance recruitment and retention of officers,

especially at the junior end. More funding for training, equipment and manpower willespecially at the junior end. More funding for training, equipment and manpower willespecially at the junior end. More funding for training, equipment and manpower willespecially at the junior end. More funding for training, equipment and manpower will

increase the force's effectiveness and morale. The Administration must actincrease the force's effectiveness and morale. The Administration must actincrease the force's effectiveness and morale. The Administration must actincrease the force's effectiveness and morale. The Administration must act

urgently.urgently.urgently.urgently.

Over the last few weeks, this Council has heard about the administration of theOver the last few weeks, this Council has heard about the administration of theOver the last few weeks, this Council has heard about the administration of theOver the last few weeks, this Council has heard about the administration of the

Judiciary and the increasing waiting time for cases to come to trial. We have beenJudiciary and the increasing waiting time for cases to come to trial. We have beenJudiciary and the increasing waiting time for cases to come to trial. We have beenJudiciary and the increasing waiting time for cases to come to trial. We have been

told that an Information Technology Strategy Study is underway to improve thetold that an Information Technology Strategy Study is underway to improve thetold that an Information Technology Strategy Study is underway to improve thetold that an Information Technology Strategy Study is underway to improve the

Judiciary's technology including the introduction of modern methods of courtJudiciary's technology including the introduction of modern methods of courtJudiciary's technology including the introduction of modern methods of courtJudiciary's technology including the introduction of modern methods of court

reporting. Difficulties have been encountered in recruiting court reporters withreporting. Difficulties have been encountered in recruiting court reporters withreporting. Difficulties have been encountered in recruiting court reporters withreporting. Difficulties have been encountered in recruiting court reporters with

the result that judges still have to record evidence and submissions in long hand.the result that judges still have to record evidence and submissions in long hand.the result that judges still have to record evidence and submissions in long hand.the result that judges still have to record evidence and submissions in long hand.

Thus, hearings in court proceed at the pace of the judges' pencil. It is no wonderThus, hearings in court proceed at the pace of the judges' pencil. It is no wonderThus, hearings in court proceed at the pace of the judges' pencil. It is no wonderThus, hearings in court proceed at the pace of the judges' pencil. It is no wonder

that trials are lengthy and waiting time is long.that trials are lengthy and waiting time is long.that trials are lengthy and waiting time is long.that trials are lengthy and waiting time is long.

Necessary funds must be made available to recruit specialist court reporters andNecessary funds must be made available to recruit specialist court reporters andNecessary funds must be made available to recruit specialist court reporters andNecessary funds must be made available to recruit specialist court reporters and

to equip the courts with modern recording and transcription facilities to speed upto equip the courts with modern recording and transcription facilities to speed upto equip the courts with modern recording and transcription facilities to speed upto equip the courts with modern recording and transcription facilities to speed up

trials and reduce waiting time, for justice delayed is justice denied. Besides, thetrials and reduce waiting time, for justice delayed is justice denied. Besides, thetrials and reduce waiting time, for justice delayed is justice denied. Besides, thetrials and reduce waiting time, for justice delayed is justice denied. Besides, the

expense involved would be more than offset by the savings achieved as a result ofexpense involved would be more than offset by the savings achieved as a result ofexpense involved would be more than offset by the savings achieved as a result ofexpense involved would be more than offset by the savings achieved as a result of

shorter and more efficient trials.shorter and more efficient trials.shorter and more efficient trials.shorter and more efficient trials.

Mr Deputy PMr Deputy PMr Deputy PMr Deputy President, we heard from the Director of Legal Aid last week that theresident, we heard from the Director of Legal Aid last week that theresident, we heard from the Director of Legal Aid last week that theresident, we heard from the Director of Legal Aid last week that the

amendments made to the Legal Aid Ordinance last year will probably be brought intoamendments made to the Legal Aid Ordinance last year will probably be brought intoamendments made to the Legal Aid Ordinance last year will probably be brought intoamendments made to the Legal Aid Ordinance last year will probably be brought into

force by the end of this year. Those amendments increase the eligibility limits forforce by the end of this year. Those amendments increase the eligibility limits forforce by the end of this year. Those amendments increase the eligibility limits forforce by the end of this year. Those amendments increase the eligibility limits for

legal aid and will result in more people qualifying for legal aid. In view of thislegal aid and will result in more people qualifying for legal aid. In view of thislegal aid and will result in more people qualifying for legal aid. In view of thislegal aid and will result in more people qualifying for legal aid. In view of this

year's huge surplus of $14.1 billion I fail to see why those amendments were not givenyear's huge surplus of $14.1 billion I fail to see why those amendments were not givenyear's huge surplus of $14.1 billion I fail to see why those amendments were not givenyear's huge surplus of $14.1 billion I fail to see why those amendments were not given

immediate effect last year. There is no reason for any further delay and I ask theimmediate effect last year. There is no reason for any further delay and I ask theimmediate effect last year. There is no reason for any further delay and I ask theimmediate effect last year. There is no reason for any further delay and I ask the

Government to give effect to the new provisions immediately.Government to give effect to the new provisions immediately.Government to give effect to the new provisions immediately.Government to give effect to the new provisions immediately.

Mr Deputy President, some of my fellow Councillors have indicated that they wouldMr Deputy President, some of my fellow Councillors have indicated that they wouldMr Deputy President, some of my fellow Councillors have indicated that they wouldMr Deputy President, some of my fellow Councillors have indicated that they would

vote down the Appropriation Bill if the Financial Secretary did not give concessionvote down the Appropriation Bill if the Financial Secretary did not give concessionvote down the Appropriation Bill if the Financial Secretary did not give concessionvote down the Appropriation Bill if the Financial Secretary did not give concession

on his Budget. Although I have called for certain parts of the Budget to be revised,on his Budget. Although I have called for certain parts of the Budget to be revised,on his Budget. Although I have called for certain parts of the Budget to be revised,on his Budget. Although I have called for certain parts of the Budget to be revised,

I would not wish to vote against the Budget if the Financial Secretary is able toI would not wish to vote against the Budget if the Financial Secretary is able toI would not wish to vote against the Budget if the Financial Secretary is able toI would not wish to vote against the Budget if the Financial Secretary is able to

undertake to address the issues causing concern and to find relief for those in needundertake to address the issues causing concern and to find relief for those in needundertake to address the issues causing concern and to find relief for those in needundertake to address the issues causing concern and to find relief for those in need

of it between now and the next Budget. The Government should not be parsimoniousof it between now and the next Budget. The Government should not be parsimoniousof it between now and the next Budget. The Government should not be parsimoniousof it between now and the next Budget. The Government should not be parsimonious

and indeed has every reason to be more generous given the very substantial reservesand indeed has every reason to be more generous given the very substantial reservesand indeed has every reason to be more generous given the very substantial reservesand indeed has every reason to be more generous given the very substantial reserves

forecast by the Financial Secretary.forecast by the Financial Secretary.forecast by the Financial Secretary.forecast by the Financial Secretary.

With these words, I support the motion.With these words, I support the motion.With these words, I support the motion.With these words, I support the motion.

DR LAM KUI-CHUN (in Cantonese): Mr Deputy President, I wish to look at the issue ofDR LAM KUI-CHUN (in Cantonese): Mr Deputy President, I wish to look at the issue ofDR LAM KUI-CHUN (in Cantonese): Mr Deputy President, I wish to look at the issue ofDR LAM KUI-CHUN (in Cantonese): Mr Deputy President, I wish to look at the issue of

tax revenue in the Budget from the point of view of the man in the street. Beforetax revenue in the Budget from the point of view of the man in the street. Beforetax revenue in the Budget from the point of view of the man in the street. Beforetax revenue in the Budget from the point of view of the man in the street. Before

the publication of the Budget, the general public witnessed two things, that is, highthe publication of the Budget, the general public witnessed two things, that is, highthe publication of the Budget, the general public witnessed two things, that is, highthe publication of the Budget, the general public witnessed two things, that is, high

inflation and the huge surplus accumulated by the Government. Then the Governmentinflation and the huge surplus accumulated by the Government. Then the Governmentinflation and the huge surplus accumulated by the Government. Then the Governmentinflation and the huge surplus accumulated by the Government. Then the Government

announced the 1% increase in profits tax and at the same time refused to makeannounced the 1% increase in profits tax and at the same time refused to makeannounced the 1% increase in profits tax and at the same time refused to makeannounced the 1% increase in profits tax and at the same time refused to make

corresponding adjustment to the progressive tax bands in line with inflation. Thecorresponding adjustment to the progressive tax bands in line with inflation. Thecorresponding adjustment to the progressive tax bands in line with inflation. Thecorresponding adjustment to the progressive tax bands in line with inflation. The

personal allowance is still less than what the two successive years of inflation wouldpersonal allowance is still less than what the two successive years of inflation wouldpersonal allowance is still less than what the two successive years of inflation wouldpersonal allowance is still less than what the two successive years of inflation would

warrant. Meanwhile, the attempt to increase rates to widen the tax base should havewarrant. Meanwhile, the attempt to increase rates to widen the tax base should havewarrant. Meanwhile, the attempt to increase rates to widen the tax base should havewarrant. Meanwhile, the attempt to increase rates to widen the tax base should have

been a measure to tighten money in the hands of the middle, upper and lower classes;been a measure to tighten money in the hands of the middle, upper and lower classes;been a measure to tighten money in the hands of the middle, upper and lower classes;been a measure to tighten money in the hands of the middle, upper and lower classes;

it should have served the purpose of combating inflation. But the Budget as a wholeit should have served the purpose of combating inflation. But the Budget as a wholeit should have served the purpose of combating inflation. But the Budget as a wholeit should have served the purpose of combating inflation. But the Budget as a whole

does not have the effect of containing inflation. Although Professor Edward CHENdoes not have the effect of containing inflation. Although Professor Edward CHENdoes not have the effect of containing inflation. Although Professor Edward CHENdoes not have the effect of containing inflation. Although Professor Edward CHEN

takes the view that fighting inflation should not be the theme of this year, the publictakes the view that fighting inflation should not be the theme of this year, the publictakes the view that fighting inflation should not be the theme of this year, the publictakes the view that fighting inflation should not be the theme of this year, the public

perception is nevertheless that the Government has let the opportunity slip by. Theperception is nevertheless that the Government has let the opportunity slip by. Theperception is nevertheless that the Government has let the opportunity slip by. Theperception is nevertheless that the Government has let the opportunity slip by. The

public have been forced to make economic sacrifices, for which they cannot see anypublic have been forced to make economic sacrifices, for which they cannot see anypublic have been forced to make economic sacrifices, for which they cannot see anypublic have been forced to make economic sacrifices, for which they cannot see any

reward. Regarding the issue of the unexpectedly large surplus, people are thinkingreward. Regarding the issue of the unexpectedly large surplus, people are thinkingreward. Regarding the issue of the unexpectedly large surplus, people are thinkingreward. Regarding the issue of the unexpectedly large surplus, people are thinking

about how that windfall might be used profitably to the benefit of everyone. It hasabout how that windfall might be used profitably to the benefit of everyone. It hasabout how that windfall might be used profitably to the benefit of everyone. It hasabout how that windfall might be used profitably to the benefit of everyone. It has

never occurred to them that the Government, totally unabashed about the huge surplus,never occurred to them that the Government, totally unabashed about the huge surplus,never occurred to them that the Government, totally unabashed about the huge surplus,never occurred to them that the Government, totally unabashed about the huge surplus,

should actually resort to raising tax to further augment our already large reserves.should actually resort to raising tax to further augment our already large reserves.should actually resort to raising tax to further augment our already large reserves.should actually resort to raising tax to further augment our already large reserves.

It is in this context that I, like many of my colleagues, would like to query theIt is in this context that I, like many of my colleagues, would like to query theIt is in this context that I, like many of my colleagues, would like to query theIt is in this context that I, like many of my colleagues, would like to query the

Government what the real motive might be of further increasing our large reserves.Government what the real motive might be of further increasing our large reserves.Government what the real motive might be of further increasing our large reserves.Government what the real motive might be of further increasing our large reserves.

I wish to add here that the Government has stated that the building of the new airportI wish to add here that the Government has stated that the building of the new airportI wish to add here that the Government has stated that the building of the new airportI wish to add here that the Government has stated that the building of the new airport

will be financed by our reserves and borrowings instead of by tax increases.will be financed by our reserves and borrowings instead of by tax increases.will be financed by our reserves and borrowings instead of by tax increases.will be financed by our reserves and borrowings instead of by tax increases.

Increasing taxes in this context serves no clear purpose other than that of furtherIncreasing taxes in this context serves no clear purpose other than that of furtherIncreasing taxes in this context serves no clear purpose other than that of furtherIncreasing taxes in this context serves no clear purpose other than that of further

stockpiling our reserves. It is very difficult to resist the conclusion that thestockpiling our reserves. It is very difficult to resist the conclusion that thestockpiling our reserves. It is very difficult to resist the conclusion that thestockpiling our reserves. It is very difficult to resist the conclusion that the

tax increases are entirely for enlarging our reserves, that is, entirely for thetax increases are entirely for enlarging our reserves, that is, entirely for thetax increases are entirely for enlarging our reserves, that is, entirely for thetax increases are entirely for enlarging our reserves, that is, entirely for the

building of the new airport. I feel that the Government has already broken itsbuilding of the new airport. I feel that the Government has already broken itsbuilding of the new airport. I feel that the Government has already broken itsbuilding of the new airport. I feel that the Government has already broken its

promise to the public.promise to the public.promise to the public.promise to the public.

Although I agree with Mr Vicent CHENG that the Budget is a cautious one, I tendAlthough I agree with Mr Vicent CHENG that the Budget is a cautious one, I tendAlthough I agree with Mr Vicent CHENG that the Budget is a cautious one, I tendAlthough I agree with Mr Vicent CHENG that the Budget is a cautious one, I tend

to think that it is also one without a clear sense of direction. The only clear thingto think that it is also one without a clear sense of direction. The only clear thingto think that it is also one without a clear sense of direction. The only clear thingto think that it is also one without a clear sense of direction. The only clear thing

about the Budget is that the Government has broken its promise to the public, andabout the Budget is that the Government has broken its promise to the public, andabout the Budget is that the Government has broken its promise to the public, andabout the Budget is that the Government has broken its promise to the public, and

all because of the airport project.all because of the airport project.all because of the airport project.all because of the airport project.

I have two points to make on the issue of spending. Firstly, I agree with MrI have two points to make on the issue of spending. Firstly, I agree with MrI have two points to make on the issue of spending. Firstly, I agree with MrI have two points to make on the issue of spending. Firstly, I agree with Mr

Allen LEE that the Government should, while striving for economic development, makeAllen LEE that the Government should, while striving for economic development, makeAllen LEE that the Government should, while striving for economic development, makeAllen LEE that the Government should, while striving for economic development, make

sure that we have enough resources to meet the welfare needs. I understand thatsure that we have enough resources to meet the welfare needs. I understand thatsure that we have enough resources to meet the welfare needs. I understand thatsure that we have enough resources to meet the welfare needs. I understand that

welfare spending may be an open-ended commitment and human wants may be insatiable.welfare spending may be an open-ended commitment and human wants may be insatiable.welfare spending may be an open-ended commitment and human wants may be insatiable.welfare spending may be an open-ended commitment and human wants may be insatiable.

In the past two years, we have seen many cases of socio-economic bankruptciesIn the past two years, we have seen many cases of socio-economic bankruptciesIn the past two years, we have seen many cases of socio-economic bankruptciesIn the past two years, we have seen many cases of socio-economic bankruptcies

occurring in countries all over the world. I agree that in the long term, welfareoccurring in countries all over the world. I agree that in the long term, welfareoccurring in countries all over the world. I agree that in the long term, welfareoccurring in countries all over the world. I agree that in the long term, welfare

spending should approximate to economic growth. But while colleagues are demandingspending should approximate to economic growth. But while colleagues are demandingspending should approximate to economic growth. But while colleagues are demandingspending should approximate to economic growth. But while colleagues are demanding

that the Government spend more on welfare, I also wish to elaborate on the uniquenessthat the Government spend more on welfare, I also wish to elaborate on the uniquenessthat the Government spend more on welfare, I also wish to elaborate on the uniquenessthat the Government spend more on welfare, I also wish to elaborate on the uniqueness

of welfare spending. Compared with other industries, like the entertainment industryof welfare spending. Compared with other industries, like the entertainment industryof welfare spending. Compared with other industries, like the entertainment industryof welfare spending. Compared with other industries, like the entertainment industry

for example, which tends to boom as the economy booms, social welfare tends to havefor example, which tends to boom as the economy booms, social welfare tends to havefor example, which tends to boom as the economy booms, social welfare tends to havefor example, which tends to boom as the economy booms, social welfare tends to have

more demands for it when the economy slumps. Public dependence on welfare ismore demands for it when the economy slumps. Public dependence on welfare ismore demands for it when the economy slumps. Public dependence on welfare ismore demands for it when the economy slumps. Public dependence on welfare is

correspondingly less when the economy improves. Given the prevailing excellentcorrespondingly less when the economy improves. Given the prevailing excellentcorrespondingly less when the economy improves. Given the prevailing excellentcorrespondingly less when the economy improves. Given the prevailing excellent

economic climate, and given that the middle to long-term economic prospects continueeconomic climate, and given that the middle to long-term economic prospects continueeconomic climate, and given that the middle to long-term economic prospects continueeconomic climate, and given that the middle to long-term economic prospects continue

to look good, then I would think that an increased spending of 2.8%, which isto look good, then I would think that an increased spending of 2.8%, which isto look good, then I would think that an increased spending of 2.8%, which isto look good, then I would think that an increased spending of 2.8%, which is

admittedly below the rate of inflation, to meet the recurrent cost of our socialadmittedly below the rate of inflation, to meet the recurrent cost of our socialadmittedly below the rate of inflation, to meet the recurrent cost of our socialadmittedly below the rate of inflation, to meet the recurrent cost of our social

welfare does not warrant in itself street protests. But there are services whichwelfare does not warrant in itself street protests. But there are services whichwelfare does not warrant in itself street protests. But there are services whichwelfare does not warrant in itself street protests. But there are services which

I think we should further expand, taking the advantage of our huge surplus. ForI think we should further expand, taking the advantage of our huge surplus. ForI think we should further expand, taking the advantage of our huge surplus. ForI think we should further expand, taking the advantage of our huge surplus. For

example, the existing old people's homes and care centres have a waiting list of overexample, the existing old people's homes and care centres have a waiting list of overexample, the existing old people's homes and care centres have a waiting list of overexample, the existing old people's homes and care centres have a waiting list of over

12 600 applicants. There are over 2 500 severely retarded and disabled persons12 600 applicants. There are over 2 500 severely retarded and disabled persons12 600 applicants. There are over 2 500 severely retarded and disabled persons12 600 applicants. There are over 2 500 severely retarded and disabled persons

waiting for the institutional care which they require. And indeed, a lot still waitswaiting for the institutional care which they require. And indeed, a lot still waitswaiting for the institutional care which they require. And indeed, a lot still waitswaiting for the institutional care which they require. And indeed, a lot still waits

to be done regarding the day care service which was the subject of an earlier debateto be done regarding the day care service which was the subject of an earlier debateto be done regarding the day care service which was the subject of an earlier debateto be done regarding the day care service which was the subject of an earlier debate

in this Council. I understand that, in the development of new services, the Governmentin this Council. I understand that, in the development of new services, the Governmentin this Council. I understand that, in the development of new services, the Governmentin this Council. I understand that, in the development of new services, the Government

cannot run the risk of over-commitment. The expansion of the present mode of servicecannot run the risk of over-commitment. The expansion of the present mode of servicecannot run the risk of over-commitment. The expansion of the present mode of servicecannot run the risk of over-commitment. The expansion of the present mode of service

centres raises doubt as to whether we have the ability to maintain the services incentres raises doubt as to whether we have the ability to maintain the services incentres raises doubt as to whether we have the ability to maintain the services incentres raises doubt as to whether we have the ability to maintain the services in

future. I am also aware that, in recent years, the social services provided by thefuture. I am also aware that, in recent years, the social services provided by thefuture. I am also aware that, in recent years, the social services provided by thefuture. I am also aware that, in recent years, the social services provided by the

Government have not been confined to helping the destitute only. Families andGovernment have not been confined to helping the destitute only. Families andGovernment have not been confined to helping the destitute only. Families andGovernment have not been confined to helping the destitute only. Families and

individuals who have some economic means but who nevertheless need the services haveindividuals who have some economic means but who nevertheless need the services haveindividuals who have some economic means but who nevertheless need the services haveindividuals who have some economic means but who nevertheless need the services have

also been the targets. In this connection, I suggest the Government should injectalso been the targets. In this connection, I suggest the Government should injectalso been the targets. In this connection, I suggest the Government should injectalso been the targets. In this connection, I suggest the Government should inject

some of the surplus into new social services provided by the non-profit-makingsome of the surplus into new social services provided by the non-profit-makingsome of the surplus into new social services provided by the non-profit-makingsome of the surplus into new social services provided by the non-profit-making

organizations whereby social services may be expanded without becoming a long-termorganizations whereby social services may be expanded without becoming a long-termorganizations whereby social services may be expanded without becoming a long-termorganizations whereby social services may be expanded without becoming a long-term

burden to the Government. Let me give an example here. It is impossible for aburden to the Government. Let me give an example here. It is impossible for aburden to the Government. Let me give an example here. It is impossible for aburden to the Government. Let me give an example here. It is impossible for a

sandwich class family, on a household income of $25,000 to afford to send an old folksandwich class family, on a household income of $25,000 to afford to send an old folksandwich class family, on a household income of $25,000 to afford to send an old folksandwich class family, on a household income of $25,000 to afford to send an old folk

to a private home which charges between $7,000 and $9,000 per month. If they haveto a private home which charges between $7,000 and $9,000 per month. If they haveto a private home which charges between $7,000 and $9,000 per month. If they haveto a private home which charges between $7,000 and $9,000 per month. If they have

to queue up behind the 12 600 applicants for a place in a Government or subventedto queue up behind the 12 600 applicants for a place in a Government or subventedto queue up behind the 12 600 applicants for a place in a Government or subventedto queue up behind the 12 600 applicants for a place in a Government or subvented

home, they will quite justiably feel that time is not on their side. If the Governmenthome, they will quite justiably feel that time is not on their side. If the Governmenthome, they will quite justiably feel that time is not on their side. If the Governmenthome, they will quite justiably feel that time is not on their side. If the Government

can assist the non-profit-making homes financially such that the sandwich classcan assist the non-profit-making homes financially such that the sandwich classcan assist the non-profit-making homes financially such that the sandwich classcan assist the non-profit-making homes financially such that the sandwich class

family can have their old folk looked after at an affordable price of between $4,000family can have their old folk looked after at an affordable price of between $4,000family can have their old folk looked after at an affordable price of between $4,000family can have their old folk looked after at an affordable price of between $4,000

and $5,000, then it would be a positive move for the benefit of the sandwich class.and $5,000, then it would be a positive move for the benefit of the sandwich class.and $5,000, then it would be a positive move for the benefit of the sandwich class.and $5,000, then it would be a positive move for the benefit of the sandwich class.

Now that the Financial Secretary insisted that there iNow that the Financial Secretary insisted that there iNow that the Financial Secretary insisted that there iNow that the Financial Secretary insisted that there is no question of raisings no question of raisings no question of raisings no question of raising

the personal allowance or widening the tax band, the least the Government should dothe personal allowance or widening the tax band, the least the Government should dothe personal allowance or widening the tax band, the least the Government should dothe personal allowance or widening the tax band, the least the Government should do

is to use part of the windfall surplus to assist the non-profit-making social serviceis to use part of the windfall surplus to assist the non-profit-making social serviceis to use part of the windfall surplus to assist the non-profit-making social serviceis to use part of the windfall surplus to assist the non-profit-making social service

providers financially which have to even expenditure with their own income, so thatproviders financially which have to even expenditure with their own income, so thatproviders financially which have to even expenditure with their own income, so thatproviders financially which have to even expenditure with their own income, so that

the sandwich class families will also be able to benefit from our economic prosperity.the sandwich class families will also be able to benefit from our economic prosperity.the sandwich class families will also be able to benefit from our economic prosperity.the sandwich class families will also be able to benefit from our economic prosperity.

The other thing I wish to bring up on public spending is actually a request thatThe other thing I wish to bring up on public spending is actually a request thatThe other thing I wish to bring up on public spending is actually a request thatThe other thing I wish to bring up on public spending is actually a request that

the Government should study whether the following way of spending public money isthe Government should study whether the following way of spending public money isthe Government should study whether the following way of spending public money isthe Government should study whether the following way of spending public money is

appropriate. I understand that a considerable number of illegal immigrantsappropriate. I understand that a considerable number of illegal immigrantsappropriate. I understand that a considerable number of illegal immigrantsappropriate. I understand that a considerable number of illegal immigrants

regularly go through the motions of appealing, after their status has been confirmedregularly go through the motions of appealing, after their status has been confirmedregularly go through the motions of appealing, after their status has been confirmedregularly go through the motions of appealing, after their status has been confirmed

following thorough investigation by the Immigration Department. After the impartialfollowing thorough investigation by the Immigration Department. After the impartialfollowing thorough investigation by the Immigration Department. After the impartialfollowing thorough investigation by the Immigration Department. After the impartial

hearing of the Immigration Tribunal, their status of illegal immigrant will stillhearing of the Immigration Tribunal, their status of illegal immigrant will stillhearing of the Immigration Tribunal, their status of illegal immigrant will stillhearing of the Immigration Tribunal, their status of illegal immigrant will still

be upheld. In the past two years, as a matter of formality, the Legal Aid Departmentbe upheld. In the past two years, as a matter of formality, the Legal Aid Departmentbe upheld. In the past two years, as a matter of formality, the Legal Aid Departmentbe upheld. In the past two years, as a matter of formality, the Legal Aid Department

has accepted applications for a judicial review from these illegal immigrants. Ithas accepted applications for a judicial review from these illegal immigrants. Ithas accepted applications for a judicial review from these illegal immigrants. Ithas accepted applications for a judicial review from these illegal immigrants. It

happens that, the Legal Aid Department has already sent out letters which effectivelyhappens that, the Legal Aid Department has already sent out letters which effectivelyhappens that, the Legal Aid Department has already sent out letters which effectivelyhappens that, the Legal Aid Department has already sent out letters which effectively

state that judicial review is an obligatory step to take if permission to stay instate that judicial review is an obligatory step to take if permission to stay instate that judicial review is an obligatory step to take if permission to stay instate that judicial review is an obligatory step to take if permission to stay in

Hong Kong is not granted before their cases are heard by the Immigration Tribunal.Hong Kong is not granted before their cases are heard by the Immigration Tribunal.Hong Kong is not granted before their cases are heard by the Immigration Tribunal.Hong Kong is not granted before their cases are heard by the Immigration Tribunal.

And there are even cases where the illegal immigrant who has indicated that he orAnd there are even cases where the illegal immigrant who has indicated that he orAnd there are even cases where the illegal immigrant who has indicated that he orAnd there are even cases where the illegal immigrant who has indicated that he or

she will not seek judicial review nor take his or her case to a higher court but whoshe will not seek judicial review nor take his or her case to a higher court but whoshe will not seek judicial review nor take his or her case to a higher court but whoshe will not seek judicial review nor take his or her case to a higher court but who

actually ends up being convinced to do so, by the Legal Aid Department. Some appellantsactually ends up being convinced to do so, by the Legal Aid Department. Some appellantsactually ends up being convinced to do so, by the Legal Aid Department. Some appellantsactually ends up being convinced to do so, by the Legal Aid Department. Some appellants

are not so much directly contesting their status as illegal immigrants as theare not so much directly contesting their status as illegal immigrants as theare not so much directly contesting their status as illegal immigrants as theare not so much directly contesting their status as illegal immigrants as the

appropriateness of the hearing procedure. Successful appeals are few and far between.appropriateness of the hearing procedure. Successful appeals are few and far between.appropriateness of the hearing procedure. Successful appeals are few and far between.appropriateness of the hearing procedure. Successful appeals are few and far between.

I understand during the question time of the Budget that each appeal costs theI understand during the question time of the Budget that each appeal costs theI understand during the question time of the Budget that each appeal costs theI understand during the question time of the Budget that each appeal costs the

Government $250,000, and up to last Monday, the Legal Aid Department had a backlogGovernment $250,000, and up to last Monday, the Legal Aid Department had a backlogGovernment $250,000, and up to last Monday, the Legal Aid Department had a backlogGovernment $250,000, and up to last Monday, the Legal Aid Department had a backlog

of 117 appeal cases involving illegal immigrants. If we do some simple arithmeticof 117 appeal cases involving illegal immigrants. If we do some simple arithmeticof 117 appeal cases involving illegal immigrants. If we do some simple arithmeticof 117 appeal cases involving illegal immigrants. If we do some simple arithmetic

here, it will cost the Government over $30 million to clear this backlog alone.here, it will cost the Government over $30 million to clear this backlog alone.here, it will cost the Government over $30 million to clear this backlog alone.here, it will cost the Government over $30 million to clear this backlog alone.

Thanks to the enthusiasm of the Legal Aid Department in helping non-Hong KongThanks to the enthusiasm of the Legal Aid Department in helping non-Hong KongThanks to the enthusiasm of the Legal Aid Department in helping non-Hong KongThanks to the enthusiasm of the Legal Aid Department in helping non-Hong Kong

residents, the number of appeals has multiplied from 95 in 1989, to 187 in 1990, andresidents, the number of appeals has multiplied from 95 in 1989, to 187 in 1990, andresidents, the number of appeals has multiplied from 95 in 1989, to 187 in 1990, andresidents, the number of appeals has multiplied from 95 in 1989, to 187 in 1990, and

371 in 1991. If this trend continues, public spending on such appeals will run into371 in 1991. If this trend continues, public spending on such appeals will run into371 in 1991. If this trend continues, public spending on such appeals will run into371 in 1991. If this trend continues, public spending on such appeals will run into

tens, even hundreds, of millions of dollars. The money is not spent on Hong Kongtens, even hundreds, of millions of dollars. The money is not spent on Hong Kongtens, even hundreds, of millions of dollars. The money is not spent on Hong Kongtens, even hundreds, of millions of dollars. The money is not spent on Hong Kong

people though it rightfully belongs to them. I fail to see any justification in thepeople though it rightfully belongs to them. I fail to see any justification in thepeople though it rightfully belongs to them. I fail to see any justification in thepeople though it rightfully belongs to them. I fail to see any justification in the

Budget for this kind of judicial review.Budget for this kind of judicial review.Budget for this kind of judicial review.Budget for this kind of judicial review.

How am I going to vote under these circumstances? The way I see this BudgeHow am I going to vote under these circumstances? The way I see this BudgeHow am I going to vote under these circumstances? The way I see this BudgeHow am I going to vote under these circumstances? The way I see this Budget whicht whicht whicht which

does not seem to have any particular sense of direction is that the Government doesdoes not seem to have any particular sense of direction is that the Government doesdoes not seem to have any particular sense of direction is that the Government doesdoes not seem to have any particular sense of direction is that the Government does

not have any good reason at all to refuse the same demands coming from differentnot have any good reason at all to refuse the same demands coming from differentnot have any good reason at all to refuse the same demands coming from differentnot have any good reason at all to refuse the same demands coming from different

quarters. I believe that if this Budget is not passed, then funding for some socialquarters. I believe that if this Budget is not passed, then funding for some socialquarters. I believe that if this Budget is not passed, then funding for some socialquarters. I believe that if this Budget is not passed, then funding for some social

services will be ended abruptly, and more generally, fund allocation for old ageservices will be ended abruptly, and more generally, fund allocation for old ageservices will be ended abruptly, and more generally, fund allocation for old ageservices will be ended abruptly, and more generally, fund allocation for old age

allowance and subsidized public housing will suddenly dry up. It is a scenario whichallowance and subsidized public housing will suddenly dry up. It is a scenario whichallowance and subsidized public housing will suddenly dry up. It is a scenario whichallowance and subsidized public housing will suddenly dry up. It is a scenario which

I do not wish to see. I am not surprised at all that the Government should presentI do not wish to see. I am not surprised at all that the Government should presentI do not wish to see. I am not surprised at all that the Government should presentI do not wish to see. I am not surprised at all that the Government should present

the Budget in a "take it or leave it" manner. If I am sure that Members are determinedthe Budget in a "take it or leave it" manner. If I am sure that Members are determinedthe Budget in a "take it or leave it" manner. If I am sure that Members are determinedthe Budget in a "take it or leave it" manner. If I am sure that Members are determined

to let it get through anyway, then I can vote against it with a clear conscience.to let it get through anyway, then I can vote against it with a clear conscience.to let it get through anyway, then I can vote against it with a clear conscience.to let it get through anyway, then I can vote against it with a clear conscience.

And by standing up to the Government I can actually have my heroism to show for theAnd by standing up to the Government I can actually have my heroism to show for theAnd by standing up to the Government I can actually have my heroism to show for theAnd by standing up to the Government I can actually have my heroism to show for the

middle and lower income groups. However, if I vote no, and the Appropriation Billmiddle and lower income groups. However, if I vote no, and the Appropriation Billmiddle and lower income groups. However, if I vote no, and the Appropriation Billmiddle and lower income groups. However, if I vote no, and the Appropriation Bill

cannot get through, then I think I have a case to answer to the people whose subsistencecannot get through, then I think I have a case to answer to the people whose subsistencecannot get through, then I think I have a case to answer to the people whose subsistencecannot get through, then I think I have a case to answer to the people whose subsistence

allowance suddenly dries up, to the people who, like Mr NG Ming-yum, will be deprivedallowance suddenly dries up, to the people who, like Mr NG Ming-yum, will be deprivedallowance suddenly dries up, to the people who, like Mr NG Ming-yum, will be deprivedallowance suddenly dries up, to the people who, like Mr NG Ming-yum, will be deprived

of hospital care. It is a responsibility which is too immense for me to bear. Soof hospital care. It is a responsibility which is too immense for me to bear. Soof hospital care. It is a responsibility which is too immense for me to bear. Soof hospital care. It is a responsibility which is too immense for me to bear. So

how am I going to vote next week? That will depend on how the Financial Secretaryhow am I going to vote next week? That will depend on how the Financial Secretaryhow am I going to vote next week? That will depend on how the Financial Secretaryhow am I going to vote next week? That will depend on how the Financial Secretary

will respond to Members, on whether they will be further enraged.will respond to Members, on whether they will be further enraged.will respond to Members, on whether they will be further enraged.will respond to Members, on whether they will be further enraged.

MR JAMES TO: Might I intervene, Mr Deputy President?MR JAMES TO: Might I intervene, Mr Deputy President?MR JAMES TO: Might I intervene, Mr Deputy President?MR JAMES TO: Might I intervene, Mr Deputy President?

DEPUTY PRESIDENT: Yes, Mr TO.DEPUTY PRESIDENT: Yes, Mr TO.DEPUTY PRESIDENT: Yes, Mr TO.DEPUTY PRESIDENT: Yes, Mr TO.

MR JAMES TO (in Cantonese): I would like to ask Dr LAM Kui-chun to clarify the pointsMR JAMES TO (in Cantonese): I would like to ask Dr LAM Kui-chun to clarify the pointsMR JAMES TO (in Cantonese): I would like to ask Dr LAM Kui-chun to clarify the pointsMR JAMES TO (in Cantonese): I would like to ask Dr LAM Kui-chun to clarify the points

he has just made. He mentioned that patients in hospitals would be instantly deprivedhe has just made. He mentioned that patients in hospitals would be instantly deprivedhe has just made. He mentioned that patients in hospitals would be instantly deprivedhe has just made. He mentioned that patients in hospitals would be instantly deprived

of medication supplies, and that social benefits would be abruptly taken away fromof medication supplies, and that social benefits would be abruptly taken away fromof medication supplies, and that social benefits would be abruptly taken away fromof medication supplies, and that social benefits would be abruptly taken away from

the needy people. May I ask him to elucidate his view?the needy people. May I ask him to elucidate his view?the needy people. May I ask him to elucidate his view?the needy people. May I ask him to elucidate his view?

DEPUTY PRESIDENT: Dr LAM, first of all, could you hear the intervention?DEPUTY PRESIDENT: Dr LAM, first of all, could you hear the intervention?DEPUTY PRESIDENT: Dr LAM, first of all, could you hear the intervention?DEPUTY PRESIDENT: Dr LAM, first of all, could you hear the intervention?

DR LAM KUI-CHUN: Yes, Mr Deputy President.DR LAM KUI-CHUN: Yes, Mr Deputy President.DR LAM KUI-CHUN: Yes, Mr Deputy President.DR LAM KUI-CHUN: Yes, Mr Deputy President.

DEPUTY PRESIDENT: It is entirely up to you whether you elucidate any point in yourDEPUTY PRESIDENT: It is entirely up to you whether you elucidate any point in yourDEPUTY PRESIDENT: It is entirely up to you whether you elucidate any point in yourDEPUTY PRESIDENT: It is entirely up to you whether you elucidate any point in your

speech.speech.speech.speech.

DR LAM KUI-CHUN: I can offer an explanation. It requires the approval of this CouncilDR LAM KUI-CHUN: I can offer an explanation. It requires the approval of this CouncilDR LAM KUI-CHUN: I can offer an explanation. It requires the approval of this CouncilDR LAM KUI-CHUN: I can offer an explanation. It requires the approval of this Council

to enable the Government to mobilize the appropriate funds wherewith to continue withto enable the Government to mobilize the appropriate funds wherewith to continue withto enable the Government to mobilize the appropriate funds wherewith to continue withto enable the Government to mobilize the appropriate funds wherewith to continue with

the services now being provided by the Hospital Authority. And therefore ifthe services now being provided by the Hospital Authority. And therefore ifthe services now being provided by the Hospital Authority. And therefore ifthe services now being provided by the Hospital Authority. And therefore if

provision of funds is stopped, the Hospital Authority and related services will beprovision of funds is stopped, the Hospital Authority and related services will beprovision of funds is stopped, the Hospital Authority and related services will beprovision of funds is stopped, the Hospital Authority and related services will be

starved of funds and services cannot continue. The same would apply to socialstarved of funds and services cannot continue. The same would apply to socialstarved of funds and services cannot continue. The same would apply to socialstarved of funds and services cannot continue. The same would apply to social

services.services.services.services.

5.02 pm5.02 pm5.02 pm5.02 pm

DEPUTY PRESIDENT: We shall take a short break and resume in 20 minutes.DEPUTY PRESIDENT: We shall take a short break and resume in 20 minutes.DEPUTY PRESIDENT: We shall take a short break and resume in 20 minutes.DEPUTY PRESIDENT: We shall take a short break and resume in 20 minutes.

5.25 pm5.25 pm5.25 pm5.25 pm

DEPUTY PRESIDENT: Council will resume.DEPUTY PRESIDENT: Council will resume.DEPUTY PRESIDENT: Council will resume.DEPUTY PRESIDENT: Council will resume.

DR SAMUEL WONG (in Cantonese): Mr Deputy President, I believe we will agree that thereDR SAMUEL WONG (in Cantonese): Mr Deputy President, I believe we will agree that thereDR SAMUEL WONG (in Cantonese): Mr Deputy President, I believe we will agree that thereDR SAMUEL WONG (in Cantonese): Mr Deputy President, I believe we will agree that there

is at least one thing the Financial Secretary has done to please Members of thisis at least one thing the Financial Secretary has done to please Members of thisis at least one thing the Financial Secretary has done to please Members of thisis at least one thing the Financial Secretary has done to please Members of this

Council in the way in which he delivered his Budget speech, and that is, he did notCouncil in the way in which he delivered his Budget speech, and that is, he did notCouncil in the way in which he delivered his Budget speech, and that is, he did notCouncil in the way in which he delivered his Budget speech, and that is, he did not

follow the practice of one of his predecessors of using the occasion to deliver anfollow the practice of one of his predecessors of using the occasion to deliver anfollow the practice of one of his predecessors of using the occasion to deliver anfollow the practice of one of his predecessors of using the occasion to deliver an

economic treatise of over two hours to torture his audience.economic treatise of over two hours to torture his audience.economic treatise of over two hours to torture his audience.economic treatise of over two hours to torture his audience.

The Budget may be described as down-to-earth though it has, much to the surpriseThe Budget may be described as down-to-earth though it has, much to the surpriseThe Budget may be described as down-to-earth though it has, much to the surpriseThe Budget may be described as down-to-earth though it has, much to the surprise

of the Financial Secretary himself, aroused outcry both inside and outside thisof the Financial Secretary himself, aroused outcry both inside and outside thisof the Financial Secretary himself, aroused outcry both inside and outside thisof the Financial Secretary himself, aroused outcry both inside and outside this

Council due to its treatment of personal allowance and progressive tax bands and itsCouncil due to its treatment of personal allowance and progressive tax bands and itsCouncil due to its treatment of personal allowance and progressive tax bands and itsCouncil due to its treatment of personal allowance and progressive tax bands and its

proposed drastic increases of rates. It seems that the Budget does not go out ofproposed drastic increases of rates. It seems that the Budget does not go out ofproposed drastic increases of rates. It seems that the Budget does not go out ofproposed drastic increases of rates. It seems that the Budget does not go out of

the way to please any particular sector of the community. I think it is up to Membersthe way to please any particular sector of the community. I think it is up to Membersthe way to please any particular sector of the community. I think it is up to Membersthe way to please any particular sector of the community. I think it is up to Members

to extend to him our qualified support and sympathy, bearing in mind that his maidento extend to him our qualified support and sympathy, bearing in mind that his maidento extend to him our qualified support and sympathy, bearing in mind that his maidento extend to him our qualified support and sympathy, bearing in mind that his maiden

speech has come up against such pressure.speech has come up against such pressure.speech has come up against such pressure.speech has come up against such pressure.

I fully support the effort of the Financial Secretary to procure sufficientI fully support the effort of the Financial Secretary to procure sufficientI fully support the effort of the Financial Secretary to procure sufficientI fully support the effort of the Financial Secretary to procure sufficient

reserves. The new airport, and the 10 airport core programme and port developmentreserves. The new airport, and the 10 airport core programme and port developmentreserves. The new airport, and the 10 airport core programme and port developmentreserves. The new airport, and the 10 airport core programme and port development

projects that go with it, was estimated to cost $127 billion in March last year. Ifprojects that go with it, was estimated to cost $127 billion in March last year. Ifprojects that go with it, was estimated to cost $127 billion in March last year. Ifprojects that go with it, was estimated to cost $127 billion in March last year. If

inflation and other engineering variables are taken into account, it is not surprisinginflation and other engineering variables are taken into account, it is not surprisinginflation and other engineering variables are taken into account, it is not surprisinginflation and other engineering variables are taken into account, it is not surprising

at all that the cost will escalate to $200 billion. What is more, now that we areat all that the cost will escalate to $200 billion. What is more, now that we areat all that the cost will escalate to $200 billion. What is more, now that we areat all that the cost will escalate to $200 billion. What is more, now that we are

already stepping into the latter half of the transition period to 1997, we have toalready stepping into the latter half of the transition period to 1997, we have toalready stepping into the latter half of the transition period to 1997, we have toalready stepping into the latter half of the transition period to 1997, we have to

be prepared that any unfavourable factor will affect the financing of the new airport,be prepared that any unfavourable factor will affect the financing of the new airport,be prepared that any unfavourable factor will affect the financing of the new airport,be prepared that any unfavourable factor will affect the financing of the new airport,

the airport rail and other projects, and that the cost of financing the projects maythe airport rail and other projects, and that the cost of financing the projects maythe airport rail and other projects, and that the cost of financing the projects maythe airport rail and other projects, and that the cost of financing the projects may

actually increase. In addition, the renewal of China's Most-Favoured-Nation statusactually increase. In addition, the renewal of China's Most-Favoured-Nation statusactually increase. In addition, the renewal of China's Most-Favoured-Nation statusactually increase. In addition, the renewal of China's Most-Favoured-Nation status

will have a bearing on trade with a net worth of nearly $200 billion; any mishap willwill have a bearing on trade with a net worth of nearly $200 billion; any mishap willwill have a bearing on trade with a net worth of nearly $200 billion; any mishap willwill have a bearing on trade with a net worth of nearly $200 billion; any mishap will

have a direct impact on the economy of Hong Kong. If after the works have startedhave a direct impact on the economy of Hong Kong. If after the works have startedhave a direct impact on the economy of Hong Kong. If after the works have startedhave a direct impact on the economy of Hong Kong. If after the works have started

we discover that we do not have enough capital, then how are we going to completewe discover that we do not have enough capital, then how are we going to completewe discover that we do not have enough capital, then how are we going to completewe discover that we do not have enough capital, then how are we going to complete

them? In this regard, it is always wise to save for a rainy day. However, the issuethem? In this regard, it is always wise to save for a rainy day. However, the issuethem? In this regard, it is always wise to save for a rainy day. However, the issuethem? In this regard, it is always wise to save for a rainy day. However, the issue

is how much is enough. Should we have reserves amounting to $71.6 billion asis how much is enough. Should we have reserves amounting to $71.6 billion asis how much is enough. Should we have reserves amounting to $71.6 billion asis how much is enough. Should we have reserves amounting to $71.6 billion as

suggested by the Financial Secretary? How is the figure arrived at? How are we goingsuggested by the Financial Secretary? How is the figure arrived at? How are we goingsuggested by the Financial Secretary? How is the figure arrived at? How are we goingsuggested by the Financial Secretary? How is the figure arrived at? How are we going

to find the money? Mr Deputy President, I wish you could raise these questions withto find the money? Mr Deputy President, I wish you could raise these questions withto find the money? Mr Deputy President, I wish you could raise these questions withto find the money? Mr Deputy President, I wish you could raise these questions with

the Financial Secretary so he could give us a positive and honest reply.the Financial Secretary so he could give us a positive and honest reply.the Financial Secretary so he could give us a positive and honest reply.the Financial Secretary so he could give us a positive and honest reply.

Meanwhile, since Financial Secretary's budget strategy spans five years, runningMeanwhile, since Financial Secretary's budget strategy spans five years, runningMeanwhile, since Financial Secretary's budget strategy spans five years, runningMeanwhile, since Financial Secretary's budget strategy spans five years, running

a year longer than usual, I presume that he has a good explanation for it. I agreea year longer than usual, I presume that he has a good explanation for it. I agreea year longer than usual, I presume that he has a good explanation for it. I agreea year longer than usual, I presume that he has a good explanation for it. I agree

that a five-year strategy, indeed a long-term plan, has its advantages to the overallthat a five-year strategy, indeed a long-term plan, has its advantages to the overallthat a five-year strategy, indeed a long-term plan, has its advantages to the overallthat a five-year strategy, indeed a long-term plan, has its advantages to the overall

economy. But when will the Financial Secretary give a detailed explanation for hiseconomy. But when will the Financial Secretary give a detailed explanation for hiseconomy. But when will the Financial Secretary give a detailed explanation for hiseconomy. But when will the Financial Secretary give a detailed explanation for his

five-year strategic plan to Members?five-year strategic plan to Members?five-year strategic plan to Members?five-year strategic plan to Members?

I am rather sceptical about the ambivalence of the Financial Secretary's positionI am rather sceptical about the ambivalence of the Financial Secretary's positionI am rather sceptical about the ambivalence of the Financial Secretary's positionI am rather sceptical about the ambivalence of the Financial Secretary's position

that our economic growth has been robust on the one hand and that the overall householdthat our economic growth has been robust on the one hand and that the overall householdthat our economic growth has been robust on the one hand and that the overall householdthat our economic growth has been robust on the one hand and that the overall household

expenditure will not be affected by inflation. What feasible measures does theexpenditure will not be affected by inflation. What feasible measures does theexpenditure will not be affected by inflation. What feasible measures does theexpenditure will not be affected by inflation. What feasible measures does the

Financial Secretary have in mind? Yesterday, many of our colleagues in this CouncilFinancial Secretary have in mind? Yesterday, many of our colleagues in this CouncilFinancial Secretary have in mind? Yesterday, many of our colleagues in this CouncilFinancial Secretary have in mind? Yesterday, many of our colleagues in this Council

elaborated on the plight of the sandwich class. They are the people who honestlyelaborated on the plight of the sandwich class. They are the people who honestlyelaborated on the plight of the sandwich class. They are the people who honestlyelaborated on the plight of the sandwich class. They are the people who honestly

fill in their tax returns and have to bear the brunt of the inflationary impact onfill in their tax returns and have to bear the brunt of the inflationary impact onfill in their tax returns and have to bear the brunt of the inflationary impact onfill in their tax returns and have to bear the brunt of the inflationary impact on

their daily expenses. Their plight is by no means a new issue, only that it has beentheir daily expenses. Their plight is by no means a new issue, only that it has beentheir daily expenses. Their plight is by no means a new issue, only that it has beentheir daily expenses. Their plight is by no means a new issue, only that it has been

talked about a lot more nowadays.talked about a lot more nowadays.talked about a lot more nowadays.talked about a lot more nowadays.

Let me tell you a true story. Twenty-five years ago, three years after I finishedLet me tell you a true story. Twenty-five years ago, three years after I finishedLet me tell you a true story. Twenty-five years ago, three years after I finishedLet me tell you a true story. Twenty-five years ago, three years after I finished

school, I borrowed $53,000 from the Hong Kong Building and Loan Agency Ltd., and withschool, I borrowed $53,000 from the Hong Kong Building and Loan Agency Ltd., and withschool, I borrowed $53,000 from the Hong Kong Building and Loan Agency Ltd., and withschool, I borrowed $53,000 from the Hong Kong Building and Loan Agency Ltd., and with

the savings between my wife and myself, I bought a flat of 1 446 sq ft at rear Tinthe savings between my wife and myself, I bought a flat of 1 446 sq ft at rear Tinthe savings between my wife and myself, I bought a flat of 1 446 sq ft at rear Tinthe savings between my wife and myself, I bought a flat of 1 446 sq ft at rear Tin

Hau Temple Road. The price of the flat was $86,000, or 35 times my monthly salary.Hau Temple Road. The price of the flat was $86,000, or 35 times my monthly salary.Hau Temple Road. The price of the flat was $86,000, or 35 times my monthly salary.Hau Temple Road. The price of the flat was $86,000, or 35 times my monthly salary.

I was then making $2,400 per month. The 10-year mortgage required me to pay aI was then making $2,400 per month. The 10-year mortgage required me to pay aI was then making $2,400 per month. The 10-year mortgage required me to pay aI was then making $2,400 per month. The 10-year mortgage required me to pay a

monthly instalment of $600, inclusive of principal and interest, which was 25% ofmonthly instalment of $600, inclusive of principal and interest, which was 25% ofmonthly instalment of $600, inclusive of principal and interest, which was 25% ofmonthly instalment of $600, inclusive of principal and interest, which was 25% of

my income. Now, 25 years on, my eldest son is already a professional looking formy income. Now, 25 years on, my eldest son is already a professional looking formy income. Now, 25 years on, my eldest son is already a professional looking formy income. Now, 25 years on, my eldest son is already a professional looking for

employment. I think he could easily land a job with a monthly salary of $24,000,employment. I think he could easily land a job with a monthly salary of $24,000,employment. I think he could easily land a job with a monthly salary of $24,000,employment. I think he could easily land a job with a monthly salary of $24,000,

which is 10 times what I was making. It is unfortunate, however, that property priceswhich is 10 times what I was making. It is unfortunate, however, that property priceswhich is 10 times what I was making. It is unfortunate, however, that property priceswhich is 10 times what I was making. It is unfortunate, however, that property prices

have risen not by 10 times, but by 70 times. If he wants to buy a flat of the samehave risen not by 10 times, but by 70 times. If he wants to buy a flat of the samehave risen not by 10 times, but by 70 times. If he wants to buy a flat of the samehave risen not by 10 times, but by 70 times. If he wants to buy a flat of the same

size, he will have to pay over $6 million, which is 260 times his salary. He hassize, he will have to pay over $6 million, which is 260 times his salary. He hassize, he will have to pay over $6 million, which is 260 times his salary. He hassize, he will have to pay over $6 million, which is 260 times his salary. He has

to work 21 years to earn this kind of money, on his monthly income. This is onlyto work 21 years to earn this kind of money, on his monthly income. This is onlyto work 21 years to earn this kind of money, on his monthly income. This is onlyto work 21 years to earn this kind of money, on his monthly income. This is only

a hypothetical comparison. Indeed, even if he uses half of his over $20,000 salarya hypothetical comparison. Indeed, even if he uses half of his over $20,000 salarya hypothetical comparison. Indeed, even if he uses half of his over $20,000 salarya hypothetical comparison. Indeed, even if he uses half of his over $20,000 salary

to buy a flat by instalment, he can only afford a flat costing $1.25 million, andto buy a flat by instalment, he can only afford a flat costing $1.25 million, andto buy a flat by instalment, he can only afford a flat costing $1.25 million, andto buy a flat by instalment, he can only afford a flat costing $1.25 million, and

measuring under 300 sq ft, at today's price level. It is a common perception amongmeasuring under 300 sq ft, at today's price level. It is a common perception amongmeasuring under 300 sq ft, at today's price level. It is a common perception amongmeasuring under 300 sq ft, at today's price level. It is a common perception among

parents and the public generally that a professional, whether he or she be a medicalparents and the public generally that a professional, whether he or she be a medicalparents and the public generally that a professional, whether he or she be a medicalparents and the public generally that a professional, whether he or she be a medical

doctor, architect, accountant, engineer or lawyer, should have nothing to worry aboutdoctor, architect, accountant, engineer or lawyer, should have nothing to worry aboutdoctor, architect, accountant, engineer or lawyer, should have nothing to worry aboutdoctor, architect, accountant, engineer or lawyer, should have nothing to worry about

the material aspects of life. The truth is that even they have to struggle to makethe material aspects of life. The truth is that even they have to struggle to makethe material aspects of life. The truth is that even they have to struggle to makethe material aspects of life. The truth is that even they have to struggle to make

ends meet, and all for the sake of a small flat. I do not know if Mr James TO, ourends meet, and all for the sake of a small flat. I do not know if Mr James TO, ourends meet, and all for the sake of a small flat. I do not know if Mr James TO, ourends meet, and all for the sake of a small flat. I do not know if Mr James TO, our

youngest and most promising colleague in this Council, has a similar problem now thatyoungest and most promising colleague in this Council, has a similar problem now thatyoungest and most promising colleague in this Council, has a similar problem now thatyoungest and most promising colleague in this Council, has a similar problem now that

he is about to get married.he is about to get married.he is about to get married.he is about to get married.

Mr Deputy President, the soon retiring Mr Graham BARNES has said that propertyMr Deputy President, the soon retiring Mr Graham BARNES has said that propertyMr Deputy President, the soon retiring Mr Graham BARNES has said that propertyMr Deputy President, the soon retiring Mr Graham BARNES has said that property

price does not have much to do with the supply of land. Although he has devoted hisprice does not have much to do with the supply of land. Although he has devoted hisprice does not have much to do with the supply of land. Although he has devoted hisprice does not have much to do with the supply of land. Although he has devoted his

30 prime years to the service of Hong Kong, I cannot agree with his view. Property30 prime years to the service of Hong Kong, I cannot agree with his view. Property30 prime years to the service of Hong Kong, I cannot agree with his view. Property30 prime years to the service of Hong Kong, I cannot agree with his view. Property

prices have been completely divorced from reality. Meanwhile, including the vacantprices have been completely divorced from reality. Meanwhile, including the vacantprices have been completely divorced from reality. Meanwhile, including the vacantprices have been completely divorced from reality. Meanwhile, including the vacant

flats of last year, Hong Kong will have a total of 37 000 vacant flats in the nextflats of last year, Hong Kong will have a total of 37 000 vacant flats in the nextflats of last year, Hong Kong will have a total of 37 000 vacant flats in the nextflats of last year, Hong Kong will have a total of 37 000 vacant flats in the next

few months. We have this absurd phenomenon of homelessness co-existing with vacantfew months. We have this absurd phenomenon of homelessness co-existing with vacantfew months. We have this absurd phenomenon of homelessness co-existing with vacantfew months. We have this absurd phenomenon of homelessness co-existing with vacant

flats lying around. It is up to the Government to reconsider seriously its high landflats lying around. It is up to the Government to reconsider seriously its high landflats lying around. It is up to the Government to reconsider seriously its high landflats lying around. It is up to the Government to reconsider seriously its high land

price policy and expedite the supply of land for residential purposes to relieve theprice policy and expedite the supply of land for residential purposes to relieve theprice policy and expedite the supply of land for residential purposes to relieve theprice policy and expedite the supply of land for residential purposes to relieve the

property market. This will be an effective way of indirectly helping the people.property market. This will be an effective way of indirectly helping the people.property market. This will be an effective way of indirectly helping the people.property market. This will be an effective way of indirectly helping the people.

In terms of direct assistance, I was very pleased to hear yesterday, and I hopeIn terms of direct assistance, I was very pleased to hear yesterday, and I hopeIn terms of direct assistance, I was very pleased to hear yesterday, and I hopeIn terms of direct assistance, I was very pleased to hear yesterday, and I hope

the Government will seriously consider, Mr Stephen CHEONG's proposal for a schemethe Government will seriously consider, Mr Stephen CHEONG's proposal for a schemethe Government will seriously consider, Mr Stephen CHEONG's proposal for a schemethe Government will seriously consider, Mr Stephen CHEONG's proposal for a scheme

to help the sandwich class to buy homes at concessionary prices. I would like toto help the sandwich class to buy homes at concessionary prices. I would like toto help the sandwich class to buy homes at concessionary prices. I would like toto help the sandwich class to buy homes at concessionary prices. I would like to

propose for the consideration of the Government a tax allowance for mortgage paymentspropose for the consideration of the Government a tax allowance for mortgage paymentspropose for the consideration of the Government a tax allowance for mortgage paymentspropose for the consideration of the Government a tax allowance for mortgage payments

for the sandwich class home buyers who are making less than $40,000 per month. Thisfor the sandwich class home buyers who are making less than $40,000 per month. Thisfor the sandwich class home buyers who are making less than $40,000 per month. Thisfor the sandwich class home buyers who are making less than $40,000 per month. This

is a viable solution. If they are buying for the first time a flat for their ownis a viable solution. If they are buying for the first time a flat for their ownis a viable solution. If they are buying for the first time a flat for their ownis a viable solution. If they are buying for the first time a flat for their own

occupation then they will be entitled to a tax allowance proportional to theiroccupation then they will be entitled to a tax allowance proportional to theiroccupation then they will be entitled to a tax allowance proportional to theiroccupation then they will be entitled to a tax allowance proportional to their

mortgage. The practice in the United States is a good case in point. Themortgage. The practice in the United States is a good case in point. Themortgage. The practice in the United States is a good case in point. Themortgage. The practice in the United States is a good case in point. The

owner-occupier actually enjoys an exemption from the federal tax amounting to theowner-occupier actually enjoys an exemption from the federal tax amounting to theowner-occupier actually enjoys an exemption from the federal tax amounting to theowner-occupier actually enjoys an exemption from the federal tax amounting to the

whole interest portion of his mortgage loan. Moreover, to minimize thewhole interest portion of his mortgage loan. Moreover, to minimize thewhole interest portion of his mortgage loan. Moreover, to minimize thewhole interest portion of his mortgage loan. Moreover, to minimize the

administrative cost, I would suggest that the recipient of such allowance should eachadministrative cost, I would suggest that the recipient of such allowance should eachadministrative cost, I would suggest that the recipient of such allowance should eachadministrative cost, I would suggest that the recipient of such allowance should each

year, along with his or her tax return submit documentation of his or her income,year, along with his or her tax return submit documentation of his or her income,year, along with his or her tax return submit documentation of his or her income,year, along with his or her tax return submit documentation of his or her income,

bank mortgage and a declaration to the effect that he or she is an owner-occupier.bank mortgage and a declaration to the effect that he or she is an owner-occupier.bank mortgage and a declaration to the effect that he or she is an owner-occupier.bank mortgage and a declaration to the effect that he or she is an owner-occupier.

This will not only lessen the administrative cost to the Government but will alsoThis will not only lessen the administrative cost to the Government but will alsoThis will not only lessen the administrative cost to the Government but will alsoThis will not only lessen the administrative cost to the Government but will also

help to alleviate the burden of mortgage payment on sandwich class home buyers.help to alleviate the burden of mortgage payment on sandwich class home buyers.help to alleviate the burden of mortgage payment on sandwich class home buyers.help to alleviate the burden of mortgage payment on sandwich class home buyers.

I understand thatI understand thatI understand thatI understand that the Government works on the concept that, once the problems the Government works on the concept that, once the problems the Government works on the concept that, once the problems the Government works on the concept that, once the problems

of housing and medical and health services are solved, then the other social problemsof housing and medical and health services are solved, then the other social problemsof housing and medical and health services are solved, then the other social problemsof housing and medical and health services are solved, then the other social problems

will be easily solved. It is for this reason that the low income families have beenwill be easily solved. It is for this reason that the low income families have beenwill be easily solved. It is for this reason that the low income families have beenwill be easily solved. It is for this reason that the low income families have been

provided with public housing and the Home Ownership Scheme (HOS) flats. It is upprovided with public housing and the Home Ownership Scheme (HOS) flats. It is upprovided with public housing and the Home Ownership Scheme (HOS) flats. It is upprovided with public housing and the Home Ownership Scheme (HOS) flats. It is up

to the sandwich class to ask the Government to spare them this time around and giveto the sandwich class to ask the Government to spare them this time around and giveto the sandwich class to ask the Government to spare them this time around and giveto the sandwich class to ask the Government to spare them this time around and give

them a hand instead.them a hand instead.them a hand instead.them a hand instead.

I would like to switch to the topic of departmental spending. Hong Kong is besetI would like to switch to the topic of departmental spending. Hong Kong is besetI would like to switch to the topic of departmental spending. Hong Kong is besetI would like to switch to the topic of departmental spending. Hong Kong is beset

with increasingly complex problems in the areas of commerce and trade, science andwith increasingly complex problems in the areas of commerce and trade, science andwith increasingly complex problems in the areas of commerce and trade, science andwith increasingly complex problems in the areas of commerce and trade, science and

technology, Sino-Hong Kong relations, and also international relations, let alonetechnology, Sino-Hong Kong relations, and also international relations, let alonetechnology, Sino-Hong Kong relations, and also international relations, let alonetechnology, Sino-Hong Kong relations, and also international relations, let alone

those presented by the huge infrastructural projects. But, against this background,those presented by the huge infrastructural projects. But, against this background,those presented by the huge infrastructural projects. But, against this background,those presented by the huge infrastructural projects. But, against this background,

government departments have maintained low, and even negative growth. One is pronegovernment departments have maintained low, and even negative growth. One is pronegovernment departments have maintained low, and even negative growth. One is pronegovernment departments have maintained low, and even negative growth. One is prone

to ask then whether the upper echelons of the Government have the adequate expertiseto ask then whether the upper echelons of the Government have the adequate expertiseto ask then whether the upper echelons of the Government have the adequate expertiseto ask then whether the upper echelons of the Government have the adequate expertise

to cope with, analyse and co-ordinate an overall policy. When they negotiate withto cope with, analyse and co-ordinate an overall policy. When they negotiate withto cope with, analyse and co-ordinate an overall policy. When they negotiate withto cope with, analyse and co-ordinate an overall policy. When they negotiate with

the large consortia, do they have the ability and wisdom to secure a good deal? Itthe large consortia, do they have the ability and wisdom to secure a good deal? Itthe large consortia, do they have the ability and wisdom to secure a good deal? Itthe large consortia, do they have the ability and wisdom to secure a good deal? It

is certainly good if the Government can continue to cope with zero growth, and yetis certainly good if the Government can continue to cope with zero growth, and yetis certainly good if the Government can continue to cope with zero growth, and yetis certainly good if the Government can continue to cope with zero growth, and yet

function with high efficiency. But a number of Branch Secretaries have actuallyfunction with high efficiency. But a number of Branch Secretaries have actuallyfunction with high efficiency. But a number of Branch Secretaries have actuallyfunction with high efficiency. But a number of Branch Secretaries have actually

complained to me about the lack of manpower, that we could be doing them a favourcomplained to me about the lack of manpower, that we could be doing them a favourcomplained to me about the lack of manpower, that we could be doing them a favourcomplained to me about the lack of manpower, that we could be doing them a favour

if we could raise fewer queries. If there is a shortage of manpower in the departments,if we could raise fewer queries. If there is a shortage of manpower in the departments,if we could raise fewer queries. If there is a shortage of manpower in the departments,if we could raise fewer queries. If there is a shortage of manpower in the departments,

I think there is a need to recruit more staff to meet the needs. And redundant staffI think there is a need to recruit more staff to meet the needs. And redundant staffI think there is a need to recruit more staff to meet the needs. And redundant staffI think there is a need to recruit more staff to meet the needs. And redundant staff

should be redeployed so as to enhance administrative efficiency.should be redeployed so as to enhance administrative efficiency.should be redeployed so as to enhance administrative efficiency.should be redeployed so as to enhance administrative efficiency.

When the Financial Secretary met separately with Members last week, he undertookWhen the Financial Secretary met separately with Members last week, he undertookWhen the Financial Secretary met separately with Members last week, he undertookWhen the Financial Secretary met separately with Members last week, he undertook

to consider seriously raising personal allowance and revising the progressive taxto consider seriously raising personal allowance and revising the progressive taxto consider seriously raising personal allowance and revising the progressive taxto consider seriously raising personal allowance and revising the progressive tax

bands, if the tax revenue for the next year meets expected levels. He also undertookbands, if the tax revenue for the next year meets expected levels. He also undertookbands, if the tax revenue for the next year meets expected levels. He also undertookbands, if the tax revenue for the next year meets expected levels. He also undertook

to come up with a scheme in six months to help the sandwich class with their housingto come up with a scheme in six months to help the sandwich class with their housingto come up with a scheme in six months to help the sandwich class with their housingto come up with a scheme in six months to help the sandwich class with their housing

problem. I hope that he can keep his promises.problem. I hope that he can keep his promises.problem. I hope that he can keep his promises.problem. I hope that he can keep his promises.

Mr Deputy President, if the Financial Secretary can give me a satisfactory replyMr Deputy President, if the Financial Secretary can give me a satisfactory replyMr Deputy President, if the Financial Secretary can give me a satisfactory replyMr Deputy President, if the Financial Secretary can give me a satisfactory reply

next Wednesday, I will follow the example of Mr Andrew WONG to vote yes to the Budgetnext Wednesday, I will follow the example of Mr Andrew WONG to vote yes to the Budgetnext Wednesday, I will follow the example of Mr Andrew WONG to vote yes to the Budgetnext Wednesday, I will follow the example of Mr Andrew WONG to vote yes to the Budget

courageously.courageously.courageously.courageously.

MISS EMILY LAU (in Cantonese): Mr Deputy President, the Financial Secretary revealedMISS EMILY LAU (in Cantonese): Mr Deputy President, the Financial Secretary revealedMISS EMILY LAU (in Cantonese): Mr Deputy President, the Financial Secretary revealedMISS EMILY LAU (in Cantonese): Mr Deputy President, the Financial Secretary revealed

in his Budget Speech on the fourth of this month that Hong Kong has a surplus of $14.1in his Budget Speech on the fourth of this month that Hong Kong has a surplus of $14.1in his Budget Speech on the fourth of this month that Hong Kong has a surplus of $14.1in his Budget Speech on the fourth of this month that Hong Kong has a surplus of $14.1

billion accumulated in the last financial year with our reserves standing at $92billion accumulated in the last financial year with our reserves standing at $92billion accumulated in the last financial year with our reserves standing at $92billion accumulated in the last financial year with our reserves standing at $92

billion. These figures are certainly the admiration of many countries and they havebillion. These figures are certainly the admiration of many countries and they havebillion. These figures are certainly the admiration of many countries and they havebillion. These figures are certainly the admiration of many countries and they have

raised the community's expectations of this Budget. The sandwich class and the lowraised the community's expectations of this Budget. The sandwich class and the lowraised the community's expectations of this Budget. The sandwich class and the lowraised the community's expectations of this Budget. The sandwich class and the low

income group who have been victimized by high inflation are hoping that they willincome group who have been victimized by high inflation are hoping that they willincome group who have been victimized by high inflation are hoping that they willincome group who have been victimized by high inflation are hoping that they will

be able to share the fruits of our economic success over the past years. But theybe able to share the fruits of our economic success over the past years. But theybe able to share the fruits of our economic success over the past years. But theybe able to share the fruits of our economic success over the past years. But they

are very disappointed now that they have seen the various proposals in the Budget.are very disappointed now that they have seen the various proposals in the Budget.are very disappointed now that they have seen the various proposals in the Budget.are very disappointed now that they have seen the various proposals in the Budget.

MMMMany Members have spoken since yesterday on the most controversial issues, suchany Members have spoken since yesterday on the most controversial issues, suchany Members have spoken since yesterday on the most controversial issues, suchany Members have spoken since yesterday on the most controversial issues, such

as single and married person's allowances, widening of tax band, rates increases,as single and married person's allowances, widening of tax band, rates increases,as single and married person's allowances, widening of tax band, rates increases,as single and married person's allowances, widening of tax band, rates increases,

funding for welfare and health services, and the need to increase funding for basicfunding for welfare and health services, and the need to increase funding for basicfunding for welfare and health services, and the need to increase funding for basicfunding for welfare and health services, and the need to increase funding for basic

education. I would only say here, Mr Deputy President, that I very much support theeducation. I would only say here, Mr Deputy President, that I very much support theeducation. I would only say here, Mr Deputy President, that I very much support theeducation. I would only say here, Mr Deputy President, that I very much support the

proposals put forward by Members of the United Democrats of Hong Kong and I will speakproposals put forward by Members of the United Democrats of Hong Kong and I will speakproposals put forward by Members of the United Democrats of Hong Kong and I will speakproposals put forward by Members of the United Democrats of Hong Kong and I will speak

no more on these issues.no more on these issues.no more on these issues.no more on these issues.

Indeed, the Financial Secretary must be aware that the most appealinIndeed, the Financial Secretary must be aware that the most appealinIndeed, the Financial Secretary must be aware that the most appealinIndeed, the Financial Secretary must be aware that the most appealing thing aboutg thing aboutg thing aboutg thing about

his Budget is the raising of the profits tax. The move may be opposed by some ofhis Budget is the raising of the profits tax. The move may be opposed by some ofhis Budget is the raising of the profits tax. The move may be opposed by some ofhis Budget is the raising of the profits tax. The move may be opposed by some of

my colleagues who represent commercial interests in this Council and businessmenmy colleagues who represent commercial interests in this Council and businessmenmy colleagues who represent commercial interests in this Council and businessmenmy colleagues who represent commercial interests in this Council and businessmen

outside this Council, but there are some businessmen who take the move very graciously,outside this Council, but there are some businessmen who take the move very graciously,outside this Council, but there are some businessmen who take the move very graciously,outside this Council, but there are some businessmen who take the move very graciously,

saying that it is a worthwhile thing to do. I personally support this move by thesaying that it is a worthwhile thing to do. I personally support this move by thesaying that it is a worthwhile thing to do. I personally support this move by thesaying that it is a worthwhile thing to do. I personally support this move by the

Financial Secretary. I am hoping to see this move representing a gradual change ofFinancial Secretary. I am hoping to see this move representing a gradual change ofFinancial Secretary. I am hoping to see this move representing a gradual change ofFinancial Secretary. I am hoping to see this move representing a gradual change of

the Government's attitude from being protective of the capitalist's interest tothe Government's attitude from being protective of the capitalist's interest tothe Government's attitude from being protective of the capitalist's interest tothe Government's attitude from being protective of the capitalist's interest to

shifting the tax burden gradually to those who are in a better position to shouldershifting the tax burden gradually to those who are in a better position to shouldershifting the tax burden gradually to those who are in a better position to shouldershifting the tax burden gradually to those who are in a better position to shoulder

it.it.it.it.

Mr Deputy President, the most controversial thing about this Budget is the partMr Deputy President, the most controversial thing about this Budget is the partMr Deputy President, the most controversial thing about this Budget is the partMr Deputy President, the most controversial thing about this Budget is the part

concerning the surplus and the reserves. Many people ask what is the rationale forconcerning the surplus and the reserves. Many people ask what is the rationale forconcerning the surplus and the reserves. Many people ask what is the rationale forconcerning the surplus and the reserves. Many people ask what is the rationale for

raising tax when the Government has so much money. The heart of the matter is thatraising tax when the Government has so much money. The heart of the matter is thatraising tax when the Government has so much money. The heart of the matter is thatraising tax when the Government has so much money. The heart of the matter is that

we need the money for the building of a rose garden. Since yesterday, many Memberswe need the money for the building of a rose garden. Since yesterday, many Memberswe need the money for the building of a rose garden. Since yesterday, many Memberswe need the money for the building of a rose garden. Since yesterday, many Members

of this Council have raised queries, including Messrs Allen LEE, David LI, TAMof this Council have raised queries, including Messrs Allen LEE, David LI, TAMof this Council have raised queries, including Messrs Allen LEE, David LI, TAMof this Council have raised queries, including Messrs Allen LEE, David LI, TAM

Yiu-chung, Edward HO, Peter WONG and LAM Kui-chun and myself. We wish to have a clearYiu-chung, Edward HO, Peter WONG and LAM Kui-chun and myself. We wish to have a clearYiu-chung, Edward HO, Peter WONG and LAM Kui-chun and myself. We wish to have a clearYiu-chung, Edward HO, Peter WONG and LAM Kui-chun and myself. We wish to have a clear

explanation from the Financial Secretary when he gives his reply next week. We wishexplanation from the Financial Secretary when he gives his reply next week. We wishexplanation from the Financial Secretary when he gives his reply next week. We wishexplanation from the Financial Secretary when he gives his reply next week. We wish

to know whether the money is to be used as a hedge against possible and serious costto know whether the money is to be used as a hedge against possible and serious costto know whether the money is to be used as a hedge against possible and serious costto know whether the money is to be used as a hedge against possible and serious cost

overruns by the Airport Project. Mr TAM Yiu-chung has even made a point of urgingoverruns by the Airport Project. Mr TAM Yiu-chung has even made a point of urgingoverruns by the Airport Project. Mr TAM Yiu-chung has even made a point of urgingoverruns by the Airport Project. Mr TAM Yiu-chung has even made a point of urging

the Government not to play with figures because he does not believe that the corethe Government not to play with figures because he does not believe that the corethe Government not to play with figures because he does not believe that the corethe Government not to play with figures because he does not believe that the core

projects of the new airport will cost only 25% of the capital expenditure each year.projects of the new airport will cost only 25% of the capital expenditure each year.projects of the new airport will cost only 25% of the capital expenditure each year.projects of the new airport will cost only 25% of the capital expenditure each year.

As a matter of fact, Mr Deputy President, nobody has any doubts that we need a newAs a matter of fact, Mr Deputy President, nobody has any doubts that we need a newAs a matter of fact, Mr Deputy President, nobody has any doubts that we need a newAs a matter of fact, Mr Deputy President, nobody has any doubts that we need a new

airport. I personally think that the new airport should have been built over 10 yearsairport. I personally think that the new airport should have been built over 10 yearsairport. I personally think that the new airport should have been built over 10 yearsairport. I personally think that the new airport should have been built over 10 years

ago and that it was due to the incompetence of the Government that it was not. Theago and that it was due to the incompetence of the Government that it was not. Theago and that it was due to the incompetence of the Government that it was not. Theago and that it was due to the incompetence of the Government that it was not. The

question is are we going to need an airport which has such a massive scale. Thequestion is are we going to need an airport which has such a massive scale. Thequestion is are we going to need an airport which has such a massive scale. Thequestion is are we going to need an airport which has such a massive scale. The

question is whether its building should destroy the natural habitat of Hong Kong andquestion is whether its building should destroy the natural habitat of Hong Kong andquestion is whether its building should destroy the natural habitat of Hong Kong andquestion is whether its building should destroy the natural habitat of Hong Kong and

whether expenditure on other very needy public projects should give way to financewhether expenditure on other very needy public projects should give way to financewhether expenditure on other very needy public projects should give way to financewhether expenditure on other very needy public projects should give way to finance

it. The question is whether the first runway has to be operational in 1997 to coincideit. The question is whether the first runway has to be operational in 1997 to coincideit. The question is whether the first runway has to be operational in 1997 to coincideit. The question is whether the first runway has to be operational in 1997 to coincide

with the withdrawal of the British. On the other hand, one also questions the wisdomwith the withdrawal of the British. On the other hand, one also questions the wisdomwith the withdrawal of the British. On the other hand, one also questions the wisdomwith the withdrawal of the British. On the other hand, one also questions the wisdom

of adhering to such a tight schedule and designing the project while building it,of adhering to such a tight schedule and designing the project while building it,of adhering to such a tight schedule and designing the project while building it,of adhering to such a tight schedule and designing the project while building it,

at a time of high inflation. Mr Deputy President, you can very well understand theat a time of high inflation. Mr Deputy President, you can very well understand theat a time of high inflation. Mr Deputy President, you can very well understand theat a time of high inflation. Mr Deputy President, you can very well understand the

concerns expressed by so many Members over such a massive project over-running itsconcerns expressed by so many Members over such a massive project over-running itsconcerns expressed by so many Members over such a massive project over-running itsconcerns expressed by so many Members over such a massive project over-running its

cost. The cost overruns of the University of Science and Technology would pale incost. The cost overruns of the University of Science and Technology would pale incost. The cost overruns of the University of Science and Technology would pale incost. The cost overruns of the University of Science and Technology would pale in

comparison, if our worries materialize. We can only take comfort from the fact thatcomparison, if our worries materialize. We can only take comfort from the fact thatcomparison, if our worries materialize. We can only take comfort from the fact thatcomparison, if our worries materialize. We can only take comfort from the fact that

the Airport Project is not run by the Royal Hong Kong Jockey Club. Given the massivethe Airport Project is not run by the Royal Hong Kong Jockey Club. Given the massivethe Airport Project is not run by the Royal Hong Kong Jockey Club. Given the massivethe Airport Project is not run by the Royal Hong Kong Jockey Club. Given the massive

funds involved in the airport project, I hope the Financial Secretary will be ablefunds involved in the airport project, I hope the Financial Secretary will be ablefunds involved in the airport project, I hope the Financial Secretary will be ablefunds involved in the airport project, I hope the Financial Secretary will be able

to give us a clear commitment in his reply next Wednesday, regarding what methodsto give us a clear commitment in his reply next Wednesday, regarding what methodsto give us a clear commitment in his reply next Wednesday, regarding what methodsto give us a clear commitment in his reply next Wednesday, regarding what methods

are used, how spending is to be controlled, and what role the Finance Committee ofare used, how spending is to be controlled, and what role the Finance Committee ofare used, how spending is to be controlled, and what role the Finance Committee ofare used, how spending is to be controlled, and what role the Finance Committee of

the Legislative Council will be playing in the whole process. He will also have tothe Legislative Council will be playing in the whole process. He will also have tothe Legislative Council will be playing in the whole process. He will also have tothe Legislative Council will be playing in the whole process. He will also have to

confirm whether the huge reserves are to be used a hedge.confirm whether the huge reserves are to be used a hedge.confirm whether the huge reserves are to be used a hedge.confirm whether the huge reserves are to be used a hedge.

Mr Deputy President, there are a lot of people like myself who fear that pensionMr Deputy President, there are a lot of people like myself who fear that pensionMr Deputy President, there are a lot of people like myself who fear that pensionMr Deputy President, there are a lot of people like myself who fear that pension

for civil servants is going to be another big drain on our reserves. The communistfor civil servants is going to be another big drain on our reserves. The communistfor civil servants is going to be another big drain on our reserves. The communistfor civil servants is going to be another big drain on our reserves. The communist

organs have recently made the point in their newspapers that the Government is fearfulorgans have recently made the point in their newspapers that the Government is fearfulorgans have recently made the point in their newspapers that the Government is fearfulorgans have recently made the point in their newspapers that the Government is fearful

of the prospect of a large number of civil servants applying for early retirementof the prospect of a large number of civil servants applying for early retirementof the prospect of a large number of civil servants applying for early retirementof the prospect of a large number of civil servants applying for early retirement

before 1997. I think not even the Financial Secretary has an answer to this allegedbefore 1997. I think not even the Financial Secretary has an answer to this allegedbefore 1997. I think not even the Financial Secretary has an answer to this allegedbefore 1997. I think not even the Financial Secretary has an answer to this alleged

fear. But I would like to know his attitude towards the issue, whether this scenariofear. But I would like to know his attitude towards the issue, whether this scenariofear. But I would like to know his attitude towards the issue, whether this scenariofear. But I would like to know his attitude towards the issue, whether this scenario

is likely to happen. And if it does happen, will it necessitate the use of a lotis likely to happen. And if it does happen, will it necessitate the use of a lotis likely to happen. And if it does happen, will it necessitate the use of a lotis likely to happen. And if it does happen, will it necessitate the use of a lot

of public funds? Where is the money going to come from? I would also like theof public funds? Where is the money going to come from? I would also like theof public funds? Where is the money going to come from? I would also like theof public funds? Where is the money going to come from? I would also like the

Government to explain to this Council what safeguards exist for the pension of theGovernment to explain to this Council what safeguards exist for the pension of theGovernment to explain to this Council what safeguards exist for the pension of theGovernment to explain to this Council what safeguards exist for the pension of the

civil servants who are understandably worried. They fear that the pension theycivil servants who are understandably worried. They fear that the pension theycivil servants who are understandably worried. They fear that the pension theycivil servants who are understandably worried. They fear that the pension they

receive will not be worth the same. I raised the possibility of the United Kingdomreceive will not be worth the same. I raised the possibility of the United Kingdomreceive will not be worth the same. I raised the possibility of the United Kingdomreceive will not be worth the same. I raised the possibility of the United Kingdom

Government underwriting the pension of our civil servants in the question time. TheGovernment underwriting the pension of our civil servants in the question time. TheGovernment underwriting the pension of our civil servants in the question time. TheGovernment underwriting the pension of our civil servants in the question time. The

reply was that possibility did not exist. However, I wish to raise the issue herereply was that possibility did not exist. However, I wish to raise the issue herereply was that possibility did not exist. However, I wish to raise the issue herereply was that possibility did not exist. However, I wish to raise the issue here

again and I wish the Government to explain to us what moves can be taken in this regardagain and I wish the Government to explain to us what moves can be taken in this regardagain and I wish the Government to explain to us what moves can be taken in this regardagain and I wish the Government to explain to us what moves can be taken in this regard

to put the hearts of our civil servants at ease.to put the hearts of our civil servants at ease.to put the hearts of our civil servants at ease.to put the hearts of our civil servants at ease.

Mr Deputy President, quite apart from Mr Deputy President, quite apart from Mr Deputy President, quite apart from Mr Deputy President, quite apart from the hidden huge expenditures, I am alsothe hidden huge expenditures, I am alsothe hidden huge expenditures, I am alsothe hidden huge expenditures, I am also

concerned about the effective use of public funds within the civil service. At aconcerned about the effective use of public funds within the civil service. At aconcerned about the effective use of public funds within the civil service. At aconcerned about the effective use of public funds within the civil service. At a

special meeting of the Finance Committee held last week, I asked the Secretary forspecial meeting of the Finance Committee held last week, I asked the Secretary forspecial meeting of the Finance Committee held last week, I asked the Secretary forspecial meeting of the Finance Committee held last week, I asked the Secretary for

Home Affairs, Mr Michael SUEN Ming-yeung, how many Administrative Officers areHome Affairs, Mr Michael SUEN Ming-yeung, how many Administrative Officers areHome Affairs, Mr Michael SUEN Ming-yeung, how many Administrative Officers areHome Affairs, Mr Michael SUEN Ming-yeung, how many Administrative Officers are

working in the City and New Territories Administration. I queried whether it wasworking in the City and New Territories Administration. I queried whether it wasworking in the City and New Territories Administration. I queried whether it wasworking in the City and New Territories Administration. I queried whether it was

appropriate for a department to have so many Administrative Officers. I even saidappropriate for a department to have so many Administrative Officers. I even saidappropriate for a department to have so many Administrative Officers. I even saidappropriate for a department to have so many Administrative Officers. I even said

some of them may have already quitted, having already done a service to the community.some of them may have already quitted, having already done a service to the community.some of them may have already quitted, having already done a service to the community.some of them may have already quitted, having already done a service to the community.

Subsequently, I have followed up with a written question, and Mr SUEN's reply goesSubsequently, I have followed up with a written question, and Mr SUEN's reply goesSubsequently, I have followed up with a written question, and Mr SUEN's reply goesSubsequently, I have followed up with a written question, and Mr SUEN's reply goes

that the CNTA has a total of 81 Administrative Officers, accounting for 18% of thethat the CNTA has a total of 81 Administrative Officers, accounting for 18% of thethat the CNTA has a total of 81 Administrative Officers, accounting for 18% of thethat the CNTA has a total of 81 Administrative Officers, accounting for 18% of the

total number of 455 in the Administrative Officer grade. I recalled the percentagetotal number of 455 in the Administrative Officer grade. I recalled the percentagetotal number of 455 in the Administrative Officer grade. I recalled the percentagetotal number of 455 in the Administrative Officer grade. I recalled the percentage

he gave me at the time was less than 10%. While I am not saying that Mr SUEN liedhe gave me at the time was less than 10%. While I am not saying that Mr SUEN liedhe gave me at the time was less than 10%. While I am not saying that Mr SUEN liedhe gave me at the time was less than 10%. While I am not saying that Mr SUEN lied

to the Finance Committee in his earlier reply, I think that 81 is certainly an alarmingto the Finance Committee in his earlier reply, I think that 81 is certainly an alarmingto the Finance Committee in his earlier reply, I think that 81 is certainly an alarmingto the Finance Committee in his earlier reply, I think that 81 is certainly an alarming

number of Administrative Officers working in the same department. Let me reiteratenumber of Administrative Officers working in the same department. Let me reiteratenumber of Administrative Officers working in the same department. Let me reiteratenumber of Administrative Officers working in the same department. Let me reiterate

that I do not query the work of an Administrative Officer. I only feel that theythat I do not query the work of an Administrative Officer. I only feel that theythat I do not query the work of an Administrative Officer. I only feel that theythat I do not query the work of an Administrative Officer. I only feel that they

have already done their fair share. And there are departments, as Dr Samuel WONGhave already done their fair share. And there are departments, as Dr Samuel WONGhave already done their fair share. And there are departments, as Dr Samuel WONGhave already done their fair share. And there are departments, as Dr Samuel WONG

was saying just now, which have a shortage of staff. I understand that Mr SUEN iswas saying just now, which have a shortage of staff. I understand that Mr SUEN iswas saying just now, which have a shortage of staff. I understand that Mr SUEN iswas saying just now, which have a shortage of staff. I understand that Mr SUEN is

now conducting a review and I hope he will seriously consider if there is a need fornow conducting a review and I hope he will seriously consider if there is a need fornow conducting a review and I hope he will seriously consider if there is a need fornow conducting a review and I hope he will seriously consider if there is a need for

so many elite officers to be working in the same department. Maybe some of theseso many elite officers to be working in the same department. Maybe some of theseso many elite officers to be working in the same department. Maybe some of theseso many elite officers to be working in the same department. Maybe some of these

officers can be deployed to other government departments.officers can be deployed to other government departments.officers can be deployed to other government departments.officers can be deployed to other government departments.

Mr Deputy President,Mr Deputy President,Mr Deputy President,Mr Deputy President, another manpower issue concerns the appointment of the another manpower issue concerns the appointment of the another manpower issue concerns the appointment of the another manpower issue concerns the appointment of the

Supreme Court Judges. The Finance Committee has recently approved funding for theSupreme Court Judges. The Finance Committee has recently approved funding for theSupreme Court Judges. The Finance Committee has recently approved funding for theSupreme Court Judges. The Finance Committee has recently approved funding for the

appointment of three Judges because we understood that there were a lot of court casesappointment of three Judges because we understood that there were a lot of court casesappointment of three Judges because we understood that there were a lot of court casesappointment of three Judges because we understood that there were a lot of court cases

which had to wait a long time before they could be tried. But I made the point towhich had to wait a long time before they could be tried. But I made the point towhich had to wait a long time before they could be tried. But I made the point towhich had to wait a long time before they could be tried. But I made the point to

the Registrar of the Supreme Court at last week's meeting too, that I observed forthe Registrar of the Supreme Court at last week's meeting too, that I observed forthe Registrar of the Supreme Court at last week's meeting too, that I observed forthe Registrar of the Supreme Court at last week's meeting too, that I observed for

many weeks the court schedule published in the South China Morning Post of many Judgesmany weeks the court schedule published in the South China Morning Post of many Judgesmany weeks the court schedule published in the South China Morning Post of many Judgesmany weeks the court schedule published in the South China Morning Post of many Judges

who had very little work to do on a daily basis, some working possibly for less thanwho had very little work to do on a daily basis, some working possibly for less thanwho had very little work to do on a daily basis, some working possibly for less thanwho had very little work to do on a daily basis, some working possibly for less than

20 minutes each day. He later explained to me in writing that some cases needed longer20 minutes each day. He later explained to me in writing that some cases needed longer20 minutes each day. He later explained to me in writing that some cases needed longer20 minutes each day. He later explained to me in writing that some cases needed longer

preparation. But, Mr Deputy President, I have recently heard that the Supreme Courtpreparation. But, Mr Deputy President, I have recently heard that the Supreme Courtpreparation. But, Mr Deputy President, I have recently heard that the Supreme Courtpreparation. But, Mr Deputy President, I have recently heard that the Supreme Court

Judges were themselves complaining that they did not have enough cases to do. SoJudges were themselves complaining that they did not have enough cases to do. SoJudges were themselves complaining that they did not have enough cases to do. SoJudges were themselves complaining that they did not have enough cases to do. So

where does the problem lie? I hope that the Registrar of the Supreme Court willwhere does the problem lie? I hope that the Registrar of the Supreme Court willwhere does the problem lie? I hope that the Registrar of the Supreme Court willwhere does the problem lie? I hope that the Registrar of the Supreme Court will

examine the problem carefully. When he came to us for money, supporting his caseexamine the problem carefully. When he came to us for money, supporting his caseexamine the problem carefully. When he came to us for money, supporting his caseexamine the problem carefully. When he came to us for money, supporting his case

with this problem and that, my colleagues voted to let him have the money he wanted.with this problem and that, my colleagues voted to let him have the money he wanted.with this problem and that, my colleagues voted to let him have the money he wanted.with this problem and that, my colleagues voted to let him have the money he wanted.

But the problem has now surfaced which he did not inform us about, and this is whatBut the problem has now surfaced which he did not inform us about, and this is whatBut the problem has now surfaced which he did not inform us about, and this is whatBut the problem has now surfaced which he did not inform us about, and this is what

causes concern.causes concern.causes concern.causes concern.

Meanwhile, on the issue of police manpower, while there has been talk of a shortageMeanwhile, on the issue of police manpower, while there has been talk of a shortageMeanwhile, on the issue of police manpower, while there has been talk of a shortageMeanwhile, on the issue of police manpower, while there has been talk of a shortage

of manpower, I have recently heard a new version of the story. Some police officersof manpower, I have recently heard a new version of the story. Some police officersof manpower, I have recently heard a new version of the story. Some police officersof manpower, I have recently heard a new version of the story. Some police officers

told me that it is not necessarily a manpower shortage which we are facing becausetold me that it is not necessarily a manpower shortage which we are facing becausetold me that it is not necessarily a manpower shortage which we are facing becausetold me that it is not necessarily a manpower shortage which we are facing because

compared with other countries, Hong Kong is not so worse off in terms of policecompared with other countries, Hong Kong is not so worse off in terms of policecompared with other countries, Hong Kong is not so worse off in terms of policecompared with other countries, Hong Kong is not so worse off in terms of police

strength and we could even be better off than some countries in this respect. Thestrength and we could even be better off than some countries in this respect. Thestrength and we could even be better off than some countries in this respect. Thestrength and we could even be better off than some countries in this respect. The

problem is that the police force has done a lot of things which should not fall withinproblem is that the police force has done a lot of things which should not fall withinproblem is that the police force has done a lot of things which should not fall withinproblem is that the police force has done a lot of things which should not fall within

their duties. More importantly, many officers are stationed in police headquarterstheir duties. More importantly, many officers are stationed in police headquarterstheir duties. More importantly, many officers are stationed in police headquarterstheir duties. More importantly, many officers are stationed in police headquarters

leaving the patrol duties to the frontline police constables. The latter have toleaving the patrol duties to the frontline police constables. The latter have toleaving the patrol duties to the frontline police constables. The latter have toleaving the patrol duties to the frontline police constables. The latter have to

fight the tough war against gangsters who are not afraid to use live ammunition. Iffight the tough war against gangsters who are not afraid to use live ammunition. Iffight the tough war against gangsters who are not afraid to use live ammunition. Iffight the tough war against gangsters who are not afraid to use live ammunition. If

this is true, then it is not surprising at all that the morale of the police is falling.this is true, then it is not surprising at all that the morale of the police is falling.this is true, then it is not surprising at all that the morale of the police is falling.this is true, then it is not surprising at all that the morale of the police is falling.

I feel that the problem is very serious. I would very much like to see a workingI feel that the problem is very serious. I would very much like to see a workingI feel that the problem is very serious. I would very much like to see a workingI feel that the problem is very serious. I would very much like to see a working

group set up by the Government to look at the issue. Some Members will say that itgroup set up by the Government to look at the issue. Some Members will say that itgroup set up by the Government to look at the issue. Some Members will say that itgroup set up by the Government to look at the issue. Some Members will say that it

does not matter what problems the police have, they can always count on this Councildoes not matter what problems the police have, they can always count on this Councildoes not matter what problems the police have, they can always count on this Councildoes not matter what problems the police have, they can always count on this Council

giving them the funds they want. I think this kind of promise should not be madegiving them the funds they want. I think this kind of promise should not be madegiving them the funds they want. I think this kind of promise should not be madegiving them the funds they want. I think this kind of promise should not be made

so lightly. We as Legislative Councillors have to reconcile competing demands. Ifso lightly. We as Legislative Councillors have to reconcile competing demands. Ifso lightly. We as Legislative Councillors have to reconcile competing demands. Ifso lightly. We as Legislative Councillors have to reconcile competing demands. If

we say that to the police, then when other groups come to us (with similar demands),we say that to the police, then when other groups come to us (with similar demands),we say that to the police, then when other groups come to us (with similar demands),we say that to the police, then when other groups come to us (with similar demands),

how are we going to deal with them? Of course, we are very much concerned with thehow are we going to deal with them? Of course, we are very much concerned with thehow are we going to deal with them? Of course, we are very much concerned with thehow are we going to deal with them? Of course, we are very much concerned with the

police problem, but all problems are in fact inter-related. We cannot say to otherpolice problem, but all problems are in fact inter-related. We cannot say to otherpolice problem, but all problems are in fact inter-related. We cannot say to otherpolice problem, but all problems are in fact inter-related. We cannot say to other

disciplined forces that they are not as important as the police, that police officersdisciplined forces that they are not as important as the police, that police officersdisciplined forces that they are not as important as the police, that police officersdisciplined forces that they are not as important as the police, that police officers

are super officers, and that we should allocate all of the funds to them. This isare super officers, and that we should allocate all of the funds to them. This isare super officers, and that we should allocate all of the funds to them. This isare super officers, and that we should allocate all of the funds to them. This is

something which we have to handle with extreme care.something which we have to handle with extreme care.something which we have to handle with extreme care.something which we have to handle with extreme care.

Mr Deputy President, the Environmental Protection Department is the nextMr Deputy President, the Environmental Protection Department is the nextMr Deputy President, the Environmental Protection Department is the nextMr Deputy President, the Environmental Protection Department is the next

department which I think should be given more funds. I do not wish to speak at lengthdepartment which I think should be given more funds. I do not wish to speak at lengthdepartment which I think should be given more funds. I do not wish to speak at lengthdepartment which I think should be given more funds. I do not wish to speak at length

on this. I support the point made by Mr Peter WONG that the Government should doon this. I support the point made by Mr Peter WONG that the Government should doon this. I support the point made by Mr Peter WONG that the Government should doon this. I support the point made by Mr Peter WONG that the Government should do

its best to save our deteriorating environment. I support the principle, which Iits best to save our deteriorating environment. I support the principle, which Iits best to save our deteriorating environment. I support the principle, which Iits best to save our deteriorating environment. I support the principle, which I

understand the Government is studying, of getting the culprit of pollution to payunderstand the Government is studying, of getting the culprit of pollution to payunderstand the Government is studying, of getting the culprit of pollution to payunderstand the Government is studying, of getting the culprit of pollution to pay

for the damage done. I hope the result can be made known to the public soon.for the damage done. I hope the result can be made known to the public soon.for the damage done. I hope the result can be made known to the public soon.for the damage done. I hope the result can be made known to the public soon.

The Office of Members of the Executive and Legislative Councils (OMELCO) isThe Office of Members of the Executive and Legislative Councils (OMELCO) isThe Office of Members of the Executive and Legislative Councils (OMELCO) isThe Office of Members of the Executive and Legislative Councils (OMELCO) is

another applicant for more public funds. We all know that the workload of OMELCOanother applicant for more public funds. We all know that the workload of OMELCOanother applicant for more public funds. We all know that the workload of OMELCOanother applicant for more public funds. We all know that the workload of OMELCO

has increased tremendously, but I am very surprised that no additional funding hashas increased tremendously, but I am very surprised that no additional funding hashas increased tremendously, but I am very surprised that no additional funding hashas increased tremendously, but I am very surprised that no additional funding has

been provided to OMELCO this year. I am pleased that the Government announced atbeen provided to OMELCO this year. I am pleased that the Government announced atbeen provided to OMELCO this year. I am pleased that the Government announced atbeen provided to OMELCO this year. I am pleased that the Government announced at

the Finance Committee meeting last week that three new posts will be created. Inthe Finance Committee meeting last week that three new posts will be created. Inthe Finance Committee meeting last week that three new posts will be created. Inthe Finance Committee meeting last week that three new posts will be created. In

fact, we all know that OMELCO has to cope with extra workload as a result of thefact, we all know that OMELCO has to cope with extra workload as a result of thefact, we all know that OMELCO has to cope with extra workload as a result of thefact, we all know that OMELCO has to cope with extra workload as a result of the

Legislative Council being partially directly elected. If the Government makes lifeLegislative Council being partially directly elected. If the Government makes lifeLegislative Council being partially directly elected. If the Government makes lifeLegislative Council being partially directly elected. If the Government makes life

difficult for OMELCO, I think this will raise scepticism as to the extent of supportdifficult for OMELCO, I think this will raise scepticism as to the extent of supportdifficult for OMELCO, I think this will raise scepticism as to the extent of supportdifficult for OMELCO, I think this will raise scepticism as to the extent of support

the Government has for the development of representative government. Also, thethe Government has for the development of representative government. Also, thethe Government has for the development of representative government. Also, thethe Government has for the development of representative government. Also, the

Government seems to have misgivings about our desire to have an independent OMELCO.Government seems to have misgivings about our desire to have an independent OMELCO.Government seems to have misgivings about our desire to have an independent OMELCO.Government seems to have misgivings about our desire to have an independent OMELCO.

I hope the Financial Secretary will give us a clear statement of the Government'sI hope the Financial Secretary will give us a clear statement of the Government'sI hope the Financial Secretary will give us a clear statement of the Government'sI hope the Financial Secretary will give us a clear statement of the Government's

position on this issue next week. It is not only a matter of concern for theposition on this issue next week. It is not only a matter of concern for theposition on this issue next week. It is not only a matter of concern for theposition on this issue next week. It is not only a matter of concern for the

Councillors, but also for the OMELCO staff as well. This has a bearing on their morale.Councillors, but also for the OMELCO staff as well. This has a bearing on their morale.Councillors, but also for the OMELCO staff as well. This has a bearing on their morale.Councillors, but also for the OMELCO staff as well. This has a bearing on their morale.

I hope the Government will take a decision without further hesitation.I hope the Government will take a decision without further hesitation.I hope the Government will take a decision without further hesitation.I hope the Government will take a decision without further hesitation.

Many Members have spoken on the Hospital Authority which suffered from aMany Members have spoken on the Hospital Authority which suffered from aMany Members have spoken on the Hospital Authority which suffered from aMany Members have spoken on the Hospital Authority which suffered from a shortage shortage shortage shortage

of funds to start with but has now been over-endowed with funds. As many of myof funds to start with but has now been over-endowed with funds. As many of myof funds to start with but has now been over-endowed with funds. As many of myof funds to start with but has now been over-endowed with funds. As many of my

colleagues have pointed out, a lot of funds have been given to it but it seems thatcolleagues have pointed out, a lot of funds have been given to it but it seems thatcolleagues have pointed out, a lot of funds have been given to it but it seems thatcolleagues have pointed out, a lot of funds have been given to it but it seems that

there is very little monitoring. In this connection, I fully support the proposalthere is very little monitoring. In this connection, I fully support the proposalthere is very little monitoring. In this connection, I fully support the proposalthere is very little monitoring. In this connection, I fully support the proposal

of Mr Peter WONG and Dr LEONG Che-hung for an ad hoc group to be set up by this Councilof Mr Peter WONG and Dr LEONG Che-hung for an ad hoc group to be set up by this Councilof Mr Peter WONG and Dr LEONG Che-hung for an ad hoc group to be set up by this Councilof Mr Peter WONG and Dr LEONG Che-hung for an ad hoc group to be set up by this Council

to monitor our massive vote of $10 billion to the Hospital Authority.to monitor our massive vote of $10 billion to the Hospital Authority.to monitor our massive vote of $10 billion to the Hospital Authority.to monitor our massive vote of $10 billion to the Hospital Authority.

Mr Deputy President, I have mixed feelings about this Budget. I do not wish toMr Deputy President, I have mixed feelings about this Budget. I do not wish toMr Deputy President, I have mixed feelings about this Budget. I do not wish toMr Deputy President, I have mixed feelings about this Budget. I do not wish to

play the heroine, in the same manner suggested by Dr LAM Kui-chun. I know that weplay the heroine, in the same manner suggested by Dr LAM Kui-chun. I know that weplay the heroine, in the same manner suggested by Dr LAM Kui-chun. I know that weplay the heroine, in the same manner suggested by Dr LAM Kui-chun. I know that we

are here to represent the wishes of the people. The Budget is not all bad, only thatare here to represent the wishes of the people. The Budget is not all bad, only thatare here to represent the wishes of the people. The Budget is not all bad, only thatare here to represent the wishes of the people. The Budget is not all bad, only that

it has many problems. I feel the same way as Mrs Elsie TU. It is not my wish toit has many problems. I feel the same way as Mrs Elsie TU. It is not my wish toit has many problems. I feel the same way as Mrs Elsie TU. It is not my wish toit has many problems. I feel the same way as Mrs Elsie TU. It is not my wish to

vote no, but there are many amendments I wish the Financial Secretary would make.vote no, but there are many amendments I wish the Financial Secretary would make.vote no, but there are many amendments I wish the Financial Secretary would make.vote no, but there are many amendments I wish the Financial Secretary would make.

Therefore, I hope that he will do some serious thinking in the next couple of days.Therefore, I hope that he will do some serious thinking in the next couple of days.Therefore, I hope that he will do some serious thinking in the next couple of days.Therefore, I hope that he will do some serious thinking in the next couple of days.

He should know that many Members of this Council want to support him, but the thingsHe should know that many Members of this Council want to support him, but the thingsHe should know that many Members of this Council want to support him, but the thingsHe should know that many Members of this Council want to support him, but the things

the public want him to do, they want them done this year, not next year.the public want him to do, they want them done this year, not next year.the public want him to do, they want them done this year, not next year.the public want him to do, they want them done this year, not next year.

Thank you, Mr Deputy President.Thank you, Mr Deputy President.Thank you, Mr Deputy President.Thank you, Mr Deputy President.

MR LEE WING-TAT (in Cantonese): Mr Deputy President, my speech is in three parts.MR LEE WING-TAT (in Cantonese): Mr Deputy President, my speech is in three parts.MR LEE WING-TAT (in Cantonese): Mr Deputy President, my speech is in three parts.MR LEE WING-TAT (in Cantonese): Mr Deputy President, my speech is in three parts.

I will first of all speak on the issue of rates, then I will speak on the housingI will first of all speak on the issue of rates, then I will speak on the housingI will first of all speak on the issue of rates, then I will speak on the housingI will first of all speak on the issue of rates, then I will speak on the housing

problem of the general public. Finally, I will respond to the views made in theproblem of the general public. Finally, I will respond to the views made in theproblem of the general public. Finally, I will respond to the views made in theproblem of the general public. Finally, I will respond to the views made in the

Council on whether the Appropriation Bill should be voted down.Council on whether the Appropriation Bill should be voted down.Council on whether the Appropriation Bill should be voted down.Council on whether the Appropriation Bill should be voted down.

Mr Deputy President, the Financial Secretary proposes in the new BudgetMr Deputy President, the Financial Secretary proposes in the new BudgetMr Deputy President, the Financial Secretary proposes in the new BudgetMr Deputy President, the Financial Secretary proposes in the new Budget

increasing rates from 5.5% to 6% while at the same time abolishing the rates reliefincreasing rates from 5.5% to 6% while at the same time abolishing the rates reliefincreasing rates from 5.5% to 6% while at the same time abolishing the rates reliefincreasing rates from 5.5% to 6% while at the same time abolishing the rates relief

scheme which has been effective since April last year. That is a double blow to thescheme which has been effective since April last year. That is a double blow to thescheme which has been effective since April last year. That is a double blow to thescheme which has been effective since April last year. That is a double blow to the

man in the street. The Financial Secretary gives the following explanations forman in the street. The Financial Secretary gives the following explanations forman in the street. The Financial Secretary gives the following explanations forman in the street. The Financial Secretary gives the following explanations for

rates increase in his Budget Speech:rates increase in his Budget Speech:rates increase in his Budget Speech:rates increase in his Budget Speech:

(i)(i)(i)(i) RatesRatesRatesRates have never been lower than they are now, amounting to no more than 2% have never been lower than they are now, amounting to no more than 2% have never been lower than they are now, amounting to no more than 2% have never been lower than they are now, amounting to no more than 2%

for most households;for most households;for most households;for most households;

(ii)(ii)(ii)(ii) Rates as a proportion of rental values have fallen substantially, fromRates as a proportion of rental values have fallen substantially, fromRates as a proportion of rental values have fallen substantially, fromRates as a proportion of rental values have fallen substantially, from

8% to 4%. This means that rates charges have fallen proportionally to the total costs8% to 4%. This means that rates charges have fallen proportionally to the total costs8% to 4%. This means that rates charges have fallen proportionally to the total costs8% to 4%. This means that rates charges have fallen proportionally to the total costs

of accommodation;of accommodation;of accommodation;of accommodation;

(iii)(iii)(iii)(iii) Rates are linked to market rent, which largely reflects the affordabilityRates are linked to market rent, which largely reflects the affordabilityRates are linked to market rent, which largely reflects the affordabilityRates are linked to market rent, which largely reflects the affordability

of rate-payers;of rate-payers;of rate-payers;of rate-payers;

(iv)(iv)(iv)(iv) Rates are a steady and reliable source of revenue.Rates are a steady and reliable source of revenue.Rates are a steady and reliable source of revenue.Rates are a steady and reliable source of revenue.

Are these explanations acceptable?Are these explanations acceptable?Are these explanations acceptable?Are these explanations acceptable?

First of all, let us see whether the impactFirst of all, let us see whether the impactFirst of all, let us see whether the impactFirst of all, let us see whether the impact of rates increase on people's of rates increase on people's of rates increase on people's of rates increase on people's

livelihood is really as minimal as the Financial Secretary says it is. It is alivelihood is really as minimal as the Financial Secretary says it is. It is alivelihood is really as minimal as the Financial Secretary says it is. It is alivelihood is really as minimal as the Financial Secretary says it is. It is a

well-known fact that rent has risen by more than 10 times since the end of the war.well-known fact that rent has risen by more than 10 times since the end of the war.well-known fact that rent has risen by more than 10 times since the end of the war.well-known fact that rent has risen by more than 10 times since the end of the war.

Living expenditure of the general public has increased by great margins. For example,Living expenditure of the general public has increased by great margins. For example,Living expenditure of the general public has increased by great margins. For example,Living expenditure of the general public has increased by great margins. For example,

in the 1960s, rent accounted for about 10% the household expenditure of the averagein the 1960s, rent accounted for about 10% the household expenditure of the averagein the 1960s, rent accounted for about 10% the household expenditure of the averagein the 1960s, rent accounted for about 10% the household expenditure of the average

family; rent and rates together made up no more than 12% of the household expenditure.family; rent and rates together made up no more than 12% of the household expenditure.family; rent and rates together made up no more than 12% of the household expenditure.family; rent and rates together made up no more than 12% of the household expenditure.

But today, rent easily costs several thousand dollars and, with rates being set atBut today, rent easily costs several thousand dollars and, with rates being set atBut today, rent easily costs several thousand dollars and, with rates being set atBut today, rent easily costs several thousand dollars and, with rates being set at

5.5%, rates charges are not inconsiderable. The two housing costs have risen to5.5%, rates charges are not inconsiderable. The two housing costs have risen to5.5%, rates charges are not inconsiderable. The two housing costs have risen to5.5%, rates charges are not inconsiderable. The two housing costs have risen to

almost 40% of the household income, a percentage which is higher in Hong Kong thanalmost 40% of the household income, a percentage which is higher in Hong Kong thanalmost 40% of the household income, a percentage which is higher in Hong Kong thanalmost 40% of the household income, a percentage which is higher in Hong Kong than

in most affluent societies. The Financial Secretary has maintained that rates arein most affluent societies. The Financial Secretary has maintained that rates arein most affluent societies. The Financial Secretary has maintained that rates arein most affluent societies. The Financial Secretary has maintained that rates are

relatively lower than before but he has overlooked the fact that rent has risen byrelatively lower than before but he has overlooked the fact that rent has risen byrelatively lower than before but he has overlooked the fact that rent has risen byrelatively lower than before but he has overlooked the fact that rent has risen by

a far faster rate than income. In this regard, the inference that rates are actuallya far faster rate than income. In this regard, the inference that rates are actuallya far faster rate than income. In this regard, the inference that rates are actuallya far faster rate than income. In this regard, the inference that rates are actually

falling relative to the total housing cost is misleading. In addition, the proposedfalling relative to the total housing cost is misleading. In addition, the proposedfalling relative to the total housing cost is misleading. In addition, the proposedfalling relative to the total housing cost is misleading. In addition, the proposed

abolition of rates relief scheme will add to the burden of the people. The propertyabolition of rates relief scheme will add to the burden of the people. The propertyabolition of rates relief scheme will add to the burden of the people. The propertyabolition of rates relief scheme will add to the burden of the people. The property

re-evaluation conducted last year has pushed the rateable value of domestic premisesre-evaluation conducted last year has pushed the rateable value of domestic premisesre-evaluation conducted last year has pushed the rateable value of domestic premisesre-evaluation conducted last year has pushed the rateable value of domestic premises

up by 65% and that of non-domestic premises up by over 100%. The 0.5% rates increase,up by 65% and that of non-domestic premises up by over 100%. The 0.5% rates increase,up by 65% and that of non-domestic premises up by over 100%. The 0.5% rates increase,up by 65% and that of non-domestic premises up by over 100%. The 0.5% rates increase,

when implemented together with the abolition of the rates relief scheme, willwhen implemented together with the abolition of the rates relief scheme, willwhen implemented together with the abolition of the rates relief scheme, willwhen implemented together with the abolition of the rates relief scheme, will

effectively raise rates by over 50% for this financial year. People are complainingeffectively raise rates by over 50% for this financial year. People are complainingeffectively raise rates by over 50% for this financial year. People are complainingeffectively raise rates by over 50% for this financial year. People are complaining

that, while they can save no more than a hundred dollars or so on account of thethat, while they can save no more than a hundred dollars or so on account of thethat, while they can save no more than a hundred dollars or so on account of thethat, while they can save no more than a hundred dollars or so on account of the

increased personal allowance, they have to fork out a few hundred to a thousand dollarsincreased personal allowance, they have to fork out a few hundred to a thousand dollarsincreased personal allowance, they have to fork out a few hundred to a thousand dollarsincreased personal allowance, they have to fork out a few hundred to a thousand dollars

more to pay for the new rates. Such is the clever calculation of our Financialmore to pay for the new rates. Such is the clever calculation of our Financialmore to pay for the new rates. Such is the clever calculation of our Financialmore to pay for the new rates. Such is the clever calculation of our Financial

Secretary!Secretary!Secretary!Secretary!

Regarding the Financial Secretary's third explanation, we have to bear Regarding the Financial Secretary's third explanation, we have to bear Regarding the Financial Secretary's third explanation, we have to bear Regarding the Financial Secretary's third explanation, we have to bear in mindin mindin mindin mind

that housing is a basic need and, quite irrespective of the individual's ability tothat housing is a basic need and, quite irrespective of the individual's ability tothat housing is a basic need and, quite irrespective of the individual's ability tothat housing is a basic need and, quite irrespective of the individual's ability to

pay for rates, he has to find a place to live. Even though one may be a tenant orpay for rates, he has to find a place to live. Even though one may be a tenant orpay for rates, he has to find a place to live. Even though one may be a tenant orpay for rates, he has to find a place to live. Even though one may be a tenant or

a proprietor, it does not automatically follow that one will have the ability to afforda proprietor, it does not automatically follow that one will have the ability to afforda proprietor, it does not automatically follow that one will have the ability to afforda proprietor, it does not automatically follow that one will have the ability to afford

the present rates, let alone the fact that rates are set at a uniform percentage whichthe present rates, let alone the fact that rates are set at a uniform percentage whichthe present rates, let alone the fact that rates are set at a uniform percentage whichthe present rates, let alone the fact that rates are set at a uniform percentage which

is applicable to both the rich and the poor. Rates increases may have no impact atis applicable to both the rich and the poor. Rates increases may have no impact atis applicable to both the rich and the poor. Rates increases may have no impact atis applicable to both the rich and the poor. Rates increases may have no impact at

all on the rich living in a flat costing a monthly rent of $30,000 to $50,000. Butall on the rich living in a flat costing a monthly rent of $30,000 to $50,000. Butall on the rich living in a flat costing a monthly rent of $30,000 to $50,000. Butall on the rich living in a flat costing a monthly rent of $30,000 to $50,000. But

to the poor ordinary chap who has to put up with the high rent of a few thousand dollarsto the poor ordinary chap who has to put up with the high rent of a few thousand dollarsto the poor ordinary chap who has to put up with the high rent of a few thousand dollarsto the poor ordinary chap who has to put up with the high rent of a few thousand dollars

for a flat, the present rates may already be a tremendous burden. It is indeedfor a flat, the present rates may already be a tremendous burden. It is indeedfor a flat, the present rates may already be a tremendous burden. It is indeedfor a flat, the present rates may already be a tremendous burden. It is indeed

disappointing that the Budget Speech has failed to take account of the overalldisappointing that the Budget Speech has failed to take account of the overalldisappointing that the Budget Speech has failed to take account of the overalldisappointing that the Budget Speech has failed to take account of the overall

expenditure of the lower and middle classes. I believe that the only explanationexpenditure of the lower and middle classes. I believe that the only explanationexpenditure of the lower and middle classes. I believe that the only explanationexpenditure of the lower and middle classes. I believe that the only explanation

which stands is that rates are a steady and reliable source of revenue and that thewhich stands is that rates are a steady and reliable source of revenue and that thewhich stands is that rates are a steady and reliable source of revenue and that thewhich stands is that rates are a steady and reliable source of revenue and that the

other three explanations are totally unacceptable. Perhaps the revenueother three explanations are totally unacceptable. Perhaps the revenueother three explanations are totally unacceptable. Perhaps the revenueother three explanations are totally unacceptable. Perhaps the revenue

consideration is what has motivated the Financial Secretary to find explanations toconsideration is what has motivated the Financial Secretary to find explanations toconsideration is what has motivated the Financial Secretary to find explanations toconsideration is what has motivated the Financial Secretary to find explanations to

justify the rates increases in the first place. He has said on other occasions thatjustify the rates increases in the first place. He has said on other occasions thatjustify the rates increases in the first place. He has said on other occasions thatjustify the rates increases in the first place. He has said on other occasions that

rates increases provide a viable alternative to the introduction of sales tax, whichrates increases provide a viable alternative to the introduction of sales tax, whichrates increases provide a viable alternative to the introduction of sales tax, whichrates increases provide a viable alternative to the introduction of sales tax, which

is considered inappropriate at this stage. But let me warn him not to play theseis considered inappropriate at this stage. But let me warn him not to play theseis considered inappropriate at this stage. But let me warn him not to play theseis considered inappropriate at this stage. But let me warn him not to play these

despicable tactics for otherwise he will have to face the prospect of the proposeddespicable tactics for otherwise he will have to face the prospect of the proposeddespicable tactics for otherwise he will have to face the prospect of the proposeddespicable tactics for otherwise he will have to face the prospect of the proposed

rates increases being voted down.rates increases being voted down.rates increases being voted down.rates increases being voted down.

Speaking for the man in the street, the United Democrats of Hong Kong (UDHK) Speaking for the man in the street, the United Democrats of Hong Kong (UDHK) Speaking for the man in the street, the United Democrats of Hong Kong (UDHK) Speaking for the man in the street, the United Democrats of Hong Kong (UDHK) areareareare

firmly opposed to the rates increases. We reiterate our demand that the rates relieffirmly opposed to the rates increases. We reiterate our demand that the rates relieffirmly opposed to the rates increases. We reiterate our demand that the rates relieffirmly opposed to the rates increases. We reiterate our demand that the rates relief

scheme should be continued.scheme should be continued.scheme should be continued.scheme should be continued.

I hereby declare my discontent with the steep increase of rates charges for publicI hereby declare my discontent with the steep increase of rates charges for publicI hereby declare my discontent with the steep increase of rates charges for publicI hereby declare my discontent with the steep increase of rates charges for public

housing tenants. The Rating and Valuation Department evaluates the rateable valuehousing tenants. The Rating and Valuation Department evaluates the rateable valuehousing tenants. The Rating and Valuation Department evaluates the rateable valuehousing tenants. The Rating and Valuation Department evaluates the rateable value

by block assessment. I wonder whether upon the completion of the evaluation theby block assessment. I wonder whether upon the completion of the evaluation theby block assessment. I wonder whether upon the completion of the evaluation theby block assessment. I wonder whether upon the completion of the evaluation the

Housing Department will then inform the tenants individually, following the practiceHousing Department will then inform the tenants individually, following the practiceHousing Department will then inform the tenants individually, following the practiceHousing Department will then inform the tenants individually, following the practice

applicable to private property. The tenants' right to know what is going on and raiseapplicable to private property. The tenants' right to know what is going on and raiseapplicable to private property. The tenants' right to know what is going on and raiseapplicable to private property. The tenants' right to know what is going on and raise

objection will be denied in that scenario. I think the Government shouldobjection will be denied in that scenario. I think the Government shouldobjection will be denied in that scenario. I think the Government shouldobjection will be denied in that scenario. I think the Government should

expeditiously remedy the situation.expeditiously remedy the situation.expeditiously remedy the situation.expeditiously remedy the situation.

Mr Deputy President, the housing problem is not unique to the lower class. Indeed,Mr Deputy President, the housing problem is not unique to the lower class. Indeed,Mr Deputy President, the housing problem is not unique to the lower class. Indeed,Mr Deputy President, the housing problem is not unique to the lower class. Indeed,

we should also be more concerned with the people who have to pay the exorbitant rentwe should also be more concerned with the people who have to pay the exorbitant rentwe should also be more concerned with the people who have to pay the exorbitant rentwe should also be more concerned with the people who have to pay the exorbitant rent

of thousands of dollars for a room and the sandwich class who are not eligible forof thousands of dollars for a room and the sandwich class who are not eligible forof thousands of dollars for a room and the sandwich class who are not eligible forof thousands of dollars for a room and the sandwich class who are not eligible for

public housing. The Government has adopted a laissez-faire policy towards thepublic housing. The Government has adopted a laissez-faire policy towards thepublic housing. The Government has adopted a laissez-faire policy towards thepublic housing. The Government has adopted a laissez-faire policy towards the

property market over the years; indeed, private property prices have almost doubledproperty market over the years; indeed, private property prices have almost doubledproperty market over the years; indeed, private property prices have almost doubledproperty market over the years; indeed, private property prices have almost doubled

in the past two to three years, such that they are far detached from the affordabilityin the past two to three years, such that they are far detached from the affordabilityin the past two to three years, such that they are far detached from the affordabilityin the past two to three years, such that they are far detached from the affordability

of most people, including the middle class. An ordinary flat of 400 sq ft on theof most people, including the middle class. An ordinary flat of 400 sq ft on theof most people, including the middle class. An ordinary flat of 400 sq ft on theof most people, including the middle class. An ordinary flat of 400 sq ft on the

fringes of an urban area sells for at least $1.5 million. Given the prevailing 70%fringes of an urban area sells for at least $1.5 million. Given the prevailing 70%fringes of an urban area sells for at least $1.5 million. Given the prevailing 70%fringes of an urban area sells for at least $1.5 million. Given the prevailing 70%

mortgage, the home buyer has to have $450,000 savings ready for the down payment.mortgage, the home buyer has to have $450,000 savings ready for the down payment.mortgage, the home buyer has to have $450,000 savings ready for the down payment.mortgage, the home buyer has to have $450,000 savings ready for the down payment.

He cannot hope to buy private property without at least $550,000 in cash, if we includeHe cannot hope to buy private property without at least $550,000 in cash, if we includeHe cannot hope to buy private property without at least $550,000 in cash, if we includeHe cannot hope to buy private property without at least $550,000 in cash, if we include

in the cost stamp duty, legal charges and some interior decoration. According toin the cost stamp duty, legal charges and some interior decoration. According toin the cost stamp duty, legal charges and some interior decoration. According toin the cost stamp duty, legal charges and some interior decoration. According to

the annual report of the Rating and Valuation Department published early this year,the annual report of the Rating and Valuation Department published early this year,the annual report of the Rating and Valuation Department published early this year,the annual report of the Rating and Valuation Department published early this year,

the problem of vacant premises in the private property market is very serious, withthe problem of vacant premises in the private property market is very serious, withthe problem of vacant premises in the private property market is very serious, withthe problem of vacant premises in the private property market is very serious, with

the number of such premises over the past three years being put at anywhere betweenthe number of such premises over the past three years being put at anywhere betweenthe number of such premises over the past three years being put at anywhere betweenthe number of such premises over the past three years being put at anywhere between

20 000 to 30 000. It is an obvious sign that the developers and the large and small20 000 to 30 000. It is an obvious sign that the developers and the large and small20 000 to 30 000. It is an obvious sign that the developers and the large and small20 000 to 30 000. It is an obvious sign that the developers and the large and small

speculators are trying to lift up prices articifically or block buying by hoardingspeculators are trying to lift up prices articifically or block buying by hoardingspeculators are trying to lift up prices articifically or block buying by hoardingspeculators are trying to lift up prices articifically or block buying by hoarding

in order that they can reap the high profit they desire. Meanwhile, the banks havein order that they can reap the high profit they desire. Meanwhile, the banks havein order that they can reap the high profit they desire. Meanwhile, the banks havein order that they can reap the high profit they desire. Meanwhile, the banks have

adopted a positive mortgage policy towards the newly completed flats at the same timeadopted a positive mortgage policy towards the newly completed flats at the same timeadopted a positive mortgage policy towards the newly completed flats at the same timeadopted a positive mortgage policy towards the newly completed flats at the same time

as they apply a low mortgage rate to old flats, sometimes not accepting their mortgageas they apply a low mortgage rate to old flats, sometimes not accepting their mortgageas they apply a low mortgage rate to old flats, sometimes not accepting their mortgageas they apply a low mortgage rate to old flats, sometimes not accepting their mortgage

at all. This practice will reduce the supply and circulation of private property.at all. This practice will reduce the supply and circulation of private property.at all. This practice will reduce the supply and circulation of private property.at all. This practice will reduce the supply and circulation of private property.

The stamp duty on uncompleted flat buyers will only have a slight impact onThe stamp duty on uncompleted flat buyers will only have a slight impact onThe stamp duty on uncompleted flat buyers will only have a slight impact onThe stamp duty on uncompleted flat buyers will only have a slight impact on

property prices. The 70% mortgage rate offered by the banks will not put a stop toproperty prices. The 70% mortgage rate offered by the banks will not put a stop toproperty prices. The 70% mortgage rate offered by the banks will not put a stop toproperty prices. The 70% mortgage rate offered by the banks will not put a stop to

speculation. It is the view of the UDHK that a long and short-term solution to thespeculation. It is the view of the UDHK that a long and short-term solution to thespeculation. It is the view of the UDHK that a long and short-term solution to thespeculation. It is the view of the UDHK that a long and short-term solution to the

housing problem of the sandwich class should be found through different channels.housing problem of the sandwich class should be found through different channels.housing problem of the sandwich class should be found through different channels.housing problem of the sandwich class should be found through different channels.

Although I agree that the Government should give urgent consideration to a housingAlthough I agree that the Government should give urgent consideration to a housingAlthough I agree that the Government should give urgent consideration to a housingAlthough I agree that the Government should give urgent consideration to a housing

scheme for the middle class, I also wish that Members and the Government would notscheme for the middle class, I also wish that Members and the Government would notscheme for the middle class, I also wish that Members and the Government would notscheme for the middle class, I also wish that Members and the Government would not

use that scheme as a substitute to stop the speculative activities of the developersuse that scheme as a substitute to stop the speculative activities of the developersuse that scheme as a substitute to stop the speculative activities of the developersuse that scheme as a substitute to stop the speculative activities of the developers

and the speculators large and small.and the speculators large and small.and the speculators large and small.and the speculators large and small.

In the long term, the Government should:In the long term, the Government should:In the long term, the Government should:In the long term, the Government should:

(i)(i)(i)(i) study whether the supply of land is adequate;study whether the supply of land is adequate;study whether the supply of land is adequate;study whether the supply of land is adequate;

(ii)(ii)(ii)(ii) review the Long Term review the Long Term review the Long Term review the Long Term Housing Strategy; andHousing Strategy; andHousing Strategy; andHousing Strategy; and

(iii)(iii)(iii)(iii) study the possibility of introducing a capital gains tax on property.study the possibility of introducing a capital gains tax on property.study the possibility of introducing a capital gains tax on property.study the possibility of introducing a capital gains tax on property.

In the short term, the Government should immediately:In the short term, the Government should immediately:In the short term, the Government should immediately:In the short term, the Government should immediately:

(i)(i)(i)(i) study a housing scheme for the middle class;study a housing scheme for the middle class;study a housing scheme for the middle class;study a housing scheme for the middle class;

(ii)(ii)(ii)(ii) study the possibility of increasing rates study the possibility of increasing rates study the possibility of increasing rates study the possibility of increasing rates charges on vacant property;charges on vacant property;charges on vacant property;charges on vacant property;

(iii)(iii)(iii)(iii) encourage the banks to adopt a more positive mortgage policy towards theencourage the banks to adopt a more positive mortgage policy towards theencourage the banks to adopt a more positive mortgage policy towards theencourage the banks to adopt a more positive mortgage policy towards the

old premises; andold premises; andold premises; andold premises; and

(iv)(iv)(iv)(iv) study the possibility of further extending the application of stamp duty.study the possibility of further extending the application of stamp duty.study the possibility of further extending the application of stamp duty.study the possibility of further extending the application of stamp duty.

The review of the housing strategy is a very iThe review of the housing strategy is a very iThe review of the housing strategy is a very iThe review of the housing strategy is a very important aspect of the long-termmportant aspect of the long-termmportant aspect of the long-termmportant aspect of the long-term

solution. It is because the the Housing Authority is planning to reduce the annualsolution. It is because the the Housing Authority is planning to reduce the annualsolution. It is because the the Housing Authority is planning to reduce the annualsolution. It is because the the Housing Authority is planning to reduce the annual

production target of public housing units, from 48 000 in 1991-92 to 30 000 inproduction target of public housing units, from 48 000 in 1991-92 to 30 000 inproduction target of public housing units, from 48 000 in 1991-92 to 30 000 inproduction target of public housing units, from 48 000 in 1991-92 to 30 000 in

1999-2000. The falling production of public housing units will mean that the supply1999-2000. The falling production of public housing units will mean that the supply1999-2000. The falling production of public housing units will mean that the supply1999-2000. The falling production of public housing units will mean that the supply

of housing will decrease with the result that the private property market will notof housing will decrease with the result that the private property market will notof housing will decrease with the result that the private property market will notof housing will decrease with the result that the private property market will not

be effectively regulated.be effectively regulated.be effectively regulated.be effectively regulated.

The introduction of a capital gains tax on property is worth considering in thatThe introduction of a capital gains tax on property is worth considering in thatThe introduction of a capital gains tax on property is worth considering in thatThe introduction of a capital gains tax on property is worth considering in that

it will not only broaden the tax base but also control speculation.it will not only broaden the tax base but also control speculation.it will not only broaden the tax base but also control speculation.it will not only broaden the tax base but also control speculation.

In the middle to short term, the two priority tasks should be the implementationIn the middle to short term, the two priority tasks should be the implementationIn the middle to short term, the two priority tasks should be the implementationIn the middle to short term, the two priority tasks should be the implementation

of a housing scheme for the middle class and the clamp-down on vacant premises inof a housing scheme for the middle class and the clamp-down on vacant premises inof a housing scheme for the middle class and the clamp-down on vacant premises inof a housing scheme for the middle class and the clamp-down on vacant premises in

the private property market. The Housing Authority has recently raised the incomethe private property market. The Housing Authority has recently raised the incomethe private property market. The Housing Authority has recently raised the incomethe private property market. The Housing Authority has recently raised the income

ceiling of Home Ownership Scheme applicants to $18,000, but people whose householdceiling of Home Ownership Scheme applicants to $18,000, but people whose householdceiling of Home Ownership Scheme applicants to $18,000, but people whose householdceiling of Home Ownership Scheme applicants to $18,000, but people whose household

income is above this limit but less than $40,000 actually find it impossible, or veryincome is above this limit but less than $40,000 actually find it impossible, or veryincome is above this limit but less than $40,000 actually find it impossible, or veryincome is above this limit but less than $40,000 actually find it impossible, or very

difficult, to buy private property. Before setting this limit, we have to study adifficult, to buy private property. Before setting this limit, we have to study adifficult, to buy private property. Before setting this limit, we have to study adifficult, to buy private property. Before setting this limit, we have to study a

number of key points, including the objectives of the scheme, method of implementation,number of key points, including the objectives of the scheme, method of implementation,number of key points, including the objectives of the scheme, method of implementation,number of key points, including the objectives of the scheme, method of implementation,

annual housing output and price setting. Mr Stephen CHEONG said yesterday that,annual housing output and price setting. Mr Stephen CHEONG said yesterday that,annual housing output and price setting. Mr Stephen CHEONG said yesterday that,annual housing output and price setting. Mr Stephen CHEONG said yesterday that,

taking into account the costs of land production, building and administration, flatstaking into account the costs of land production, building and administration, flatstaking into account the costs of land production, building and administration, flatstaking into account the costs of land production, building and administration, flats

sold for the Housing Scheme for the middle class will cost 30% less than the currentsold for the Housing Scheme for the middle class will cost 30% less than the currentsold for the Housing Scheme for the middle class will cost 30% less than the currentsold for the Housing Scheme for the middle class will cost 30% less than the current

price on the free market. I would like Members to bear in mind that the pegging ofprice on the free market. I would like Members to bear in mind that the pegging ofprice on the free market. I would like Members to bear in mind that the pegging ofprice on the free market. I would like Members to bear in mind that the pegging of

Home Ownership Scheme prices to market value has resulted in the escalation of flatHome Ownership Scheme prices to market value has resulted in the escalation of flatHome Ownership Scheme prices to market value has resulted in the escalation of flatHome Ownership Scheme prices to market value has resulted in the escalation of flat

prices beyond the affordability of the residents. We should remember not to pushprices beyond the affordability of the residents. We should remember not to pushprices beyond the affordability of the residents. We should remember not to pushprices beyond the affordability of the residents. We should remember not to push

the middle class to the edge in setting the pricing formula under the scheme.the middle class to the edge in setting the pricing formula under the scheme.the middle class to the edge in setting the pricing formula under the scheme.the middle class to the edge in setting the pricing formula under the scheme.

In yesterday's debate on the housing scheme for middle class, it seemed to meIn yesterday's debate on the housing scheme for middle class, it seemed to meIn yesterday's debate on the housing scheme for middle class, it seemed to meIn yesterday's debate on the housing scheme for middle class, it seemed to me

that Members were evading the issue of the skyrocketing private property pricesthat Members were evading the issue of the skyrocketing private property pricesthat Members were evading the issue of the skyrocketing private property pricesthat Members were evading the issue of the skyrocketing private property prices

brought about by unscrupulous developers and speculators large and small. I hopebrought about by unscrupulous developers and speculators large and small. I hopebrought about by unscrupulous developers and speculators large and small. I hopebrought about by unscrupulous developers and speculators large and small. I hope

Members will not let go of the "big tiger", whether intentionally or otherwise.Members will not let go of the "big tiger", whether intentionally or otherwise.Members will not let go of the "big tiger", whether intentionally or otherwise.Members will not let go of the "big tiger", whether intentionally or otherwise.

Regarding the Regarding the Regarding the Regarding the issues of vacant premises and "price lifting" of private properties,issues of vacant premises and "price lifting" of private properties,issues of vacant premises and "price lifting" of private properties,issues of vacant premises and "price lifting" of private properties,

the Government should consider combating hoarding by raising rates.the Government should consider combating hoarding by raising rates.the Government should consider combating hoarding by raising rates.the Government should consider combating hoarding by raising rates.

Lastly, I wish to respond to a view expressed by certain Members yesterday onLastly, I wish to respond to a view expressed by certain Members yesterday onLastly, I wish to respond to a view expressed by certain Members yesterday onLastly, I wish to respond to a view expressed by certain Members yesterday on

the advisability of voting down the Appropriation Bill. Mr Allen LEE said that votingthe advisability of voting down the Appropriation Bill. Mr Allen LEE said that votingthe advisability of voting down the Appropriation Bill. Mr Allen LEE said that votingthe advisability of voting down the Appropriation Bill. Mr Allen LEE said that voting

down the Budget had serious implication and would paralyse the Government. Dr LAMdown the Budget had serious implication and would paralyse the Government. Dr LAMdown the Budget had serious implication and would paralyse the Government. Dr LAMdown the Budget had serious implication and would paralyse the Government. Dr LAM

Kui-chun said that if the Appropriation Bill was voted down, then patients would beKui-chun said that if the Appropriation Bill was voted down, then patients would beKui-chun said that if the Appropriation Bill was voted down, then patients would beKui-chun said that if the Appropriation Bill was voted down, then patients would be

denied hospital care and medication and the elderly would be denied their welfaredenied hospital care and medication and the elderly would be denied their welfaredenied hospital care and medication and the elderly would be denied their welfaredenied hospital care and medication and the elderly would be denied their welfare

allowances. However, Members, including Mr LEE and Dr LAM, will recall that on 8allowances. However, Members, including Mr LEE and Dr LAM, will recall that on 8allowances. However, Members, including Mr LEE and Dr LAM, will recall that on 8allowances. However, Members, including Mr LEE and Dr LAM, will recall that on 8

March, the Council has passed a resolution to appropriate $39 billion to theMarch, the Council has passed a resolution to appropriate $39 billion to theMarch, the Council has passed a resolution to appropriate $39 billion to theMarch, the Council has passed a resolution to appropriate $39 billion to the

Government in advance. We will not paralyse the Government by voting down theGovernment in advance. We will not paralyse the Government by voting down theGovernment in advance. We will not paralyse the Government by voting down theGovernment in advance. We will not paralyse the Government by voting down the

Appropriation Bill next Wednesday. It is indeed baffling that Mr LEE should beAppropriation Bill next Wednesday. It is indeed baffling that Mr LEE should beAppropriation Bill next Wednesday. It is indeed baffling that Mr LEE should beAppropriation Bill next Wednesday. It is indeed baffling that Mr LEE should be

ignorant of such common knowledge about the working of the Legislative Council bearingignorant of such common knowledge about the working of the Legislative Council bearingignorant of such common knowledge about the working of the Legislative Council bearingignorant of such common knowledge about the working of the Legislative Council bearing

in mind that he is the most senior Member among us. It may be the case that the jobin mind that he is the most senior Member among us. It may be the case that the jobin mind that he is the most senior Member among us. It may be the case that the jobin mind that he is the most senior Member among us. It may be the case that the job

of an Executive Councillor consists of feigning a critical stance but actuallyof an Executive Councillor consists of feigning a critical stance but actuallyof an Executive Councillor consists of feigning a critical stance but actuallyof an Executive Councillor consists of feigning a critical stance but actually

facilitating and cheering on the Government, and that it has nothing to do withfacilitating and cheering on the Government, and that it has nothing to do withfacilitating and cheering on the Government, and that it has nothing to do withfacilitating and cheering on the Government, and that it has nothing to do with

fighting consistently for the interests of the middle and lower classes.fighting consistently for the interests of the middle and lower classes.fighting consistently for the interests of the middle and lower classes.fighting consistently for the interests of the middle and lower classes.

TheTheTheThe voting down of the Appropriation Bill is the only potent weapon which the voting down of the Appropriation Bill is the only potent weapon which the voting down of the Appropriation Bill is the only potent weapon which the voting down of the Appropriation Bill is the only potent weapon which the

Legislative Council may use in its scrutiny of the Budget. Members are aware thatLegislative Council may use in its scrutiny of the Budget. Members are aware thatLegislative Council may use in its scrutiny of the Budget. Members are aware thatLegislative Council may use in its scrutiny of the Budget. Members are aware that

the Governor has already ruled out making any amendment to any part of the Budget.the Governor has already ruled out making any amendment to any part of the Budget.the Governor has already ruled out making any amendment to any part of the Budget.the Governor has already ruled out making any amendment to any part of the Budget.

The only way of getting the Government to re-consider the Budget co-operatively withThe only way of getting the Government to re-consider the Budget co-operatively withThe only way of getting the Government to re-consider the Budget co-operatively withThe only way of getting the Government to re-consider the Budget co-operatively with

the Legislative Council is for us to as a first move vote down the Appropriation Bill.the Legislative Council is for us to as a first move vote down the Appropriation Bill.the Legislative Council is for us to as a first move vote down the Appropriation Bill.the Legislative Council is for us to as a first move vote down the Appropriation Bill.

Mr Ronald ARCULLI said that voting down the Bill will not help the middle class, butMr Ronald ARCULLI said that voting down the Bill will not help the middle class, butMr Ronald ARCULLI said that voting down the Bill will not help the middle class, butMr Ronald ARCULLI said that voting down the Bill will not help the middle class, but

this view is wrong. It is only by voting down the Bill that the Government willthis view is wrong. It is only by voting down the Bill that the Government willthis view is wrong. It is only by voting down the Bill that the Government willthis view is wrong. It is only by voting down the Bill that the Government will

comprehensively re-consider with the Legislative Council the whole budgetarycomprehensively re-consider with the Legislative Council the whole budgetarycomprehensively re-consider with the Legislative Council the whole budgetarycomprehensively re-consider with the Legislative Council the whole budgetary

arrangements, including the fund appropriation and tax revenue aspects. And on thearrangements, including the fund appropriation and tax revenue aspects. And on thearrangements, including the fund appropriation and tax revenue aspects. And on thearrangements, including the fund appropriation and tax revenue aspects. And on the

issue of tax revenue, we can renegotiate the tax allowances and the tax bands. Byissue of tax revenue, we can renegotiate the tax allowances and the tax bands. Byissue of tax revenue, we can renegotiate the tax allowances and the tax bands. Byissue of tax revenue, we can renegotiate the tax allowances and the tax bands. By

voting no to the Rates Bill only is to give up one's most potent weapon and thevoting no to the Rates Bill only is to give up one's most potent weapon and thevoting no to the Rates Bill only is to give up one's most potent weapon and thevoting no to the Rates Bill only is to give up one's most potent weapon and the

opportunity to help the middle class with their overall tax burden.opportunity to help the middle class with their overall tax burden.opportunity to help the middle class with their overall tax burden.opportunity to help the middle class with their overall tax burden.

The Budget has come up against unprecedented critThe Budget has come up against unprecedented critThe Budget has come up against unprecedented critThe Budget has come up against unprecedented criticism and opposition,icism and opposition,icism and opposition,icism and opposition,

particularly in the aspects of personal allowance, tax band and rates. After theparticularly in the aspects of personal allowance, tax band and rates. After theparticularly in the aspects of personal allowance, tax band and rates. After theparticularly in the aspects of personal allowance, tax band and rates. After the

publication of the Budget, the Co-operative Resources Centre (CRC) initially put uppublication of the Budget, the Co-operative Resources Centre (CRC) initially put uppublication of the Budget, the Co-operative Resources Centre (CRC) initially put uppublication of the Budget, the Co-operative Resources Centre (CRC) initially put up

a courageous fight, challenging the Financial Secretary to make amendments. It isa courageous fight, challenging the Financial Secretary to make amendments. It isa courageous fight, challenging the Financial Secretary to make amendments. It isa courageous fight, challenging the Financial Secretary to make amendments. It is

unfortunate that they have not been able to persevere in their effort. They may notunfortunate that they have not been able to persevere in their effort. They may notunfortunate that they have not been able to persevere in their effort. They may notunfortunate that they have not been able to persevere in their effort. They may not

have made a complete U-turn, but at least they have dragged their feet. Now, manyhave made a complete U-turn, but at least they have dragged their feet. Now, manyhave made a complete U-turn, but at least they have dragged their feet. Now, manyhave made a complete U-turn, but at least they have dragged their feet. Now, many

Members are fighting for housing benefits for the middle class on high moral ground,Members are fighting for housing benefits for the middle class on high moral ground,Members are fighting for housing benefits for the middle class on high moral ground,Members are fighting for housing benefits for the middle class on high moral ground,

but despite their rhetoric, I am sure when the housing scheme for middle class comesbut despite their rhetoric, I am sure when the housing scheme for middle class comesbut despite their rhetoric, I am sure when the housing scheme for middle class comesbut despite their rhetoric, I am sure when the housing scheme for middle class comes

into conflict with the interests of the developers, the speculators and the wealthyinto conflict with the interests of the developers, the speculators and the wealthyinto conflict with the interests of the developers, the speculators and the wealthyinto conflict with the interests of the developers, the speculators and the wealthy

class generally, then the same Members who were championing the housing needs of theclass generally, then the same Members who were championing the housing needs of theclass generally, then the same Members who were championing the housing needs of theclass generally, then the same Members who were championing the housing needs of the

middle class yesterday will invariably make a U-turn. Alternatively, they may dragmiddle class yesterday will invariably make a U-turn. Alternatively, they may dragmiddle class yesterday will invariably make a U-turn. Alternatively, they may dragmiddle class yesterday will invariably make a U-turn. Alternatively, they may drag

their feet, or even become truly paralysed, not knowing what move to make.their feet, or even become truly paralysed, not knowing what move to make.their feet, or even become truly paralysed, not knowing what move to make.their feet, or even become truly paralysed, not knowing what move to make.

I did not get to hear a lot of children's stories as a child. But one story II did not get to hear a lot of children's stories as a child. But one story II did not get to hear a lot of children's stories as a child. But one story II did not get to hear a lot of children's stories as a child. But one story I

know is the one about the habitual liar crying wolf. The call for lessening the taxknow is the one about the habitual liar crying wolf. The call for lessening the taxknow is the one about the habitual liar crying wolf. The call for lessening the taxknow is the one about the habitual liar crying wolf. The call for lessening the tax

burden of the middle class is crying wolf for the first time. The call for solvingburden of the middle class is crying wolf for the first time. The call for solvingburden of the middle class is crying wolf for the first time. The call for solvingburden of the middle class is crying wolf for the first time. The call for solving

the housing problem of the middle class is crying wolf a second time. The self-the housing problem of the middle class is crying wolf a second time. The self-the housing problem of the middle class is crying wolf a second time. The self-the housing problem of the middle class is crying wolf a second time. The self-

styled champion of the rights of the middle class who are not prepared to continuestyled champion of the rights of the middle class who are not prepared to continuestyled champion of the rights of the middle class who are not prepared to continuestyled champion of the rights of the middle class who are not prepared to continue

their fight to the end should beware, no one will take you seriously when you crytheir fight to the end should beware, no one will take you seriously when you crytheir fight to the end should beware, no one will take you seriously when you crytheir fight to the end should beware, no one will take you seriously when you cry

wolf the third time around.wolf the third time around.wolf the third time around.wolf the third time around.

Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.

MR ERIC LI: Mr Deputy President,MR ERIC LI: Mr Deputy President,MR ERIC LI: Mr Deputy President,MR ERIC LI: Mr Deputy President,

I.I.I.I. Cause for celebration: but party in moderationCause for celebration: but party in moderationCause for celebration: but party in moderationCause for celebration: but party in moderation

If it is not against the Standing Order, I think the Financial Secretary wouldIf it is not against the Standing Order, I think the Financial Secretary wouldIf it is not against the Standing Order, I think the Financial Secretary wouldIf it is not against the Standing Order, I think the Financial Secretary would

rather pop a few bottles of champagne today in this Council than "to be tortured"rather pop a few bottles of champagne today in this Council than "to be tortured"rather pop a few bottles of champagne today in this Council than "to be tortured"rather pop a few bottles of champagne today in this Council than "to be tortured"

-- to quote I think the Honourable Samuel WONG -- by this very long-winded debate.-- to quote I think the Honourable Samuel WONG -- by this very long-winded debate.-- to quote I think the Honourable Samuel WONG -- by this very long-winded debate.-- to quote I think the Honourable Samuel WONG -- by this very long-winded debate.

Besides disproving an accusation that he has not been generous, a Budget surplus thatBesides disproving an accusation that he has not been generous, a Budget surplus thatBesides disproving an accusation that he has not been generous, a Budget surplus thatBesides disproving an accusation that he has not been generous, a Budget surplus that

exceeds even the wildest expectation has certainly given good cause for celebration.exceeds even the wildest expectation has certainly given good cause for celebration.exceeds even the wildest expectation has certainly given good cause for celebration.exceeds even the wildest expectation has certainly given good cause for celebration.

I am, of course, stretching my imaginI am, of course, stretching my imaginI am, of course, stretching my imaginI am, of course, stretching my imagination to think of flowing champagne and heapsation to think of flowing champagne and heapsation to think of flowing champagne and heapsation to think of flowing champagne and heaps

of caviar in this Council. For the whole afternoon today and yesterday we have onlyof caviar in this Council. For the whole afternoon today and yesterday we have onlyof caviar in this Council. For the whole afternoon today and yesterday we have onlyof caviar in this Council. For the whole afternoon today and yesterday we have only

been reminded of "sandwiches". Perhaps, that is more in keeping with our usual stylebeen reminded of "sandwiches". Perhaps, that is more in keeping with our usual stylebeen reminded of "sandwiches". Perhaps, that is more in keeping with our usual stylebeen reminded of "sandwiches". Perhaps, that is more in keeping with our usual style

of prudence and austerity. When public funds are at stake, even a party must beof prudence and austerity. When public funds are at stake, even a party must beof prudence and austerity. When public funds are at stake, even a party must beof prudence and austerity. When public funds are at stake, even a party must be

celebrated in moderation.celebrated in moderation.celebrated in moderation.celebrated in moderation.

II.II.II.II. No right answers: blame it on the Financial SecretaryNo right answers: blame it on the Financial SecretaryNo right answers: blame it on the Financial SecretaryNo right answers: blame it on the Financial Secretary

The serious Budget debate has already gone outside this Council for some threeThe serious Budget debate has already gone outside this Council for some threeThe serious Budget debate has already gone outside this Council for some threeThe serious Budget debate has already gone outside this Council for some three

weeks after 4 March. The dazzling manoeuvres performed by some of our new styleweeks after 4 March. The dazzling manoeuvres performed by some of our new styleweeks after 4 March. The dazzling manoeuvres performed by some of our new styleweeks after 4 March. The dazzling manoeuvres performed by some of our new style

politicians had probably attracted more media attention than speeches made in here.politicians had probably attracted more media attention than speeches made in here.politicians had probably attracted more media attention than speeches made in here.politicians had probably attracted more media attention than speeches made in here.

I cannot help but feel that today we are literally going through the motions of sayingI cannot help but feel that today we are literally going through the motions of sayingI cannot help but feel that today we are literally going through the motions of sayingI cannot help but feel that today we are literally going through the motions of saying

"Budget with no right answers, blame it on the Financial Secretary". Quite so, if"Budget with no right answers, blame it on the Financial Secretary". Quite so, if"Budget with no right answers, blame it on the Financial Secretary". Quite so, if"Budget with no right answers, blame it on the Financial Secretary". Quite so, if

he is still left in charge. But if it is the "clever lot" among us who succeed inhe is still left in charge. But if it is the "clever lot" among us who succeed inhe is still left in charge. But if it is the "clever lot" among us who succeed inhe is still left in charge. But if it is the "clever lot" among us who succeed in

taking over matters, then the full responsibilities become ours!taking over matters, then the full responsibilities become ours!taking over matters, then the full responsibilities become ours!taking over matters, then the full responsibilities become ours!

As a matter of fact, the new Financial Secretary has worked like a charm foAs a matter of fact, the new Financial Secretary has worked like a charm foAs a matter of fact, the new Financial Secretary has worked like a charm foAs a matter of fact, the new Financial Secretary has worked like a charm for Hongr Hongr Hongr Hong

Kong. He has wrung in plenty of cash and the prospect of the economy is looking bright.Kong. He has wrung in plenty of cash and the prospect of the economy is looking bright.Kong. He has wrung in plenty of cash and the prospect of the economy is looking bright.Kong. He has wrung in plenty of cash and the prospect of the economy is looking bright.

How can anyone be less than pleased with such an impressive result?How can anyone be less than pleased with such an impressive result?How can anyone be less than pleased with such an impressive result?How can anyone be less than pleased with such an impressive result?

A.A.A.A. Businessmen: seem pleasedBusinessmen: seem pleasedBusinessmen: seem pleasedBusinessmen: seem pleased

The businessmen seem reasonably pleased. They even reward The businessmen seem reasonably pleased. They even reward The businessmen seem reasonably pleased. They even reward The businessmen seem reasonably pleased. They even reward the Financialthe Financialthe Financialthe Financial

Secretary by conceding to a 1% increase in profits tax rate. They would even beSecretary by conceding to a 1% increase in profits tax rate. They would even beSecretary by conceding to a 1% increase in profits tax rate. They would even beSecretary by conceding to a 1% increase in profits tax rate. They would even be

prepared to shoulder quietly the substantial burden of additional rates levied onprepared to shoulder quietly the substantial burden of additional rates levied onprepared to shoulder quietly the substantial burden of additional rates levied onprepared to shoulder quietly the substantial burden of additional rates levied on

commercial and industrial properties.commercial and industrial properties.commercial and industrial properties.commercial and industrial properties.

The business community is clearly a smaThe business community is clearly a smaThe business community is clearly a smaThe business community is clearly a small minority in Hong Kong. But it is thell minority in Hong Kong. But it is thell minority in Hong Kong. But it is thell minority in Hong Kong. But it is the

all important sector to always keep in mind. They need constant protection by aall important sector to always keep in mind. They need constant protection by aall important sector to always keep in mind. They need constant protection by aall important sector to always keep in mind. They need constant protection by a

conscious policy to maintain the lowest possible tax rate. No matter how powerfulconscious policy to maintain the lowest possible tax rate. No matter how powerfulconscious policy to maintain the lowest possible tax rate. No matter how powerfulconscious policy to maintain the lowest possible tax rate. No matter how powerful

politicians may have become, they will never be powerful enough to take over the jobpoliticians may have become, they will never be powerful enough to take over the jobpoliticians may have become, they will never be powerful enough to take over the jobpoliticians may have become, they will never be powerful enough to take over the job

of the businessmen. Politicians are simply not apt to create wealth and to pay ourof the businessmen. Politicians are simply not apt to create wealth and to pay ourof the businessmen. Politicians are simply not apt to create wealth and to pay ourof the businessmen. Politicians are simply not apt to create wealth and to pay our

wages and bills. The cold reality is that politics which stand at odds with thewages and bills. The cold reality is that politics which stand at odds with thewages and bills. The cold reality is that politics which stand at odds with thewages and bills. The cold reality is that politics which stand at odds with the

business community will always succumb after bringing the economy down.business community will always succumb after bringing the economy down.business community will always succumb after bringing the economy down.business community will always succumb after bringing the economy down.

B.B.B.B. Salaries taxpayers: labourer fewSalaries taxpayers: labourer fewSalaries taxpayers: labourer fewSalaries taxpayers: labourer few

The Hong Kong salaries tax base is notoriously narrow. In this land where manyThe Hong Kong salaries tax base is notoriously narrow. In this land where manyThe Hong Kong salaries tax base is notoriously narrow. In this land where manyThe Hong Kong salaries tax base is notoriously narrow. In this land where many

would pry to share in harvest but few would labour, it is particularly important forwould pry to share in harvest but few would labour, it is particularly important forwould pry to share in harvest but few would labour, it is particularly important forwould pry to share in harvest but few would labour, it is particularly important for

the Government to justify the need for taxation. No doubt, the hard pressed middlethe Government to justify the need for taxation. No doubt, the hard pressed middlethe Government to justify the need for taxation. No doubt, the hard pressed middlethe Government to justify the need for taxation. No doubt, the hard pressed middle

income group is the most deserving group to get a tax break first of all and a moreincome group is the most deserving group to get a tax break first of all and a moreincome group is the most deserving group to get a tax break first of all and a moreincome group is the most deserving group to get a tax break first of all and a more

generous raise in personal allowance would make a surplus Budget more palatable. Ingenerous raise in personal allowance would make a surplus Budget more palatable. Ingenerous raise in personal allowance would make a surplus Budget more palatable. Ingenerous raise in personal allowance would make a surplus Budget more palatable. In

the light of the windfall surplus, I would generally support a revision of the Budgetthe light of the windfall surplus, I would generally support a revision of the Budgetthe light of the windfall surplus, I would generally support a revision of the Budgetthe light of the windfall surplus, I would generally support a revision of the Budget

in that direction.in that direction.in that direction.in that direction.

C.C.C.C. International investors: the bystandersInternational investors: the bystandersInternational investors: the bystandersInternational investors: the bystanders

Ironically, in my experience as a professional accountant, the "bystanders", theIronically, in my experience as a professional accountant, the "bystanders", theIronically, in my experience as a professional accountant, the "bystanders", theIronically, in my experience as a professional accountant, the "bystanders", the

bankers and creditors are frequently the most serious users of financial accounts.bankers and creditors are frequently the most serious users of financial accounts.bankers and creditors are frequently the most serious users of financial accounts.bankers and creditors are frequently the most serious users of financial accounts.

In the case of the Budget, it will be the community of international investors whoIn the case of the Budget, it will be the community of international investors whoIn the case of the Budget, it will be the community of international investors whoIn the case of the Budget, it will be the community of international investors who

would take the most objective and critical view.would take the most objective and critical view.would take the most objective and critical view.would take the most objective and critical view.

Hong Kong is at a crossroad. The year 1992-93 is going to be the crucial timeHong Kong is at a crossroad. The year 1992-93 is going to be the crucial timeHong Kong is at a crossroad. The year 1992-93 is going to be the crucial timeHong Kong is at a crossroad. The year 1992-93 is going to be the crucial time

for fund raising to finance our ambitious infrastructural projects. It is alsofor fund raising to finance our ambitious infrastructural projects. It is alsofor fund raising to finance our ambitious infrastructural projects. It is alsofor fund raising to finance our ambitious infrastructural projects. It is also

likely to be the last Budget before 1997 that the Financial Secretary can deliverlikely to be the last Budget before 1997 that the Financial Secretary can deliverlikely to be the last Budget before 1997 that the Financial Secretary can deliverlikely to be the last Budget before 1997 that the Financial Secretary can deliver

smiling to announce yet another surplus. Unlike some advanced economy such as thesmiling to announce yet another surplus. Unlike some advanced economy such as thesmiling to announce yet another surplus. Unlike some advanced economy such as thesmiling to announce yet another surplus. Unlike some advanced economy such as the

United States, Hong Kong is not self sufficient. We must still rely heavily onUnited States, Hong Kong is not self sufficient. We must still rely heavily onUnited States, Hong Kong is not self sufficient. We must still rely heavily onUnited States, Hong Kong is not self sufficient. We must still rely heavily on

foreign capital and expertise. Before responding to our invitations to tender forforeign capital and expertise. Before responding to our invitations to tender forforeign capital and expertise. Before responding to our invitations to tender forforeign capital and expertise. Before responding to our invitations to tender for

capital work projects, international investors will judge us harshly on the basiscapital work projects, international investors will judge us harshly on the basiscapital work projects, international investors will judge us harshly on the basiscapital work projects, international investors will judge us harshly on the basis

of our financial track records, level of savings and most important of all, the qualityof our financial track records, level of savings and most important of all, the qualityof our financial track records, level of savings and most important of all, the qualityof our financial track records, level of savings and most important of all, the quality

of financial management. No shrewd investor will take an interest to work with aof financial management. No shrewd investor will take an interest to work with aof financial management. No shrewd investor will take an interest to work with aof financial management. No shrewd investor will take an interest to work with a

government that is lame in decision-making and jittery in its handling of politiciansgovernment that is lame in decision-making and jittery in its handling of politiciansgovernment that is lame in decision-making and jittery in its handling of politiciansgovernment that is lame in decision-making and jittery in its handling of politicians

who have obviously a different sense of priority.who have obviously a different sense of priority.who have obviously a different sense of priority.who have obviously a different sense of priority.

D.D.D.D. No right answers: may be the wrong question askedNo right answers: may be the wrong question askedNo right answers: may be the wrong question askedNo right answers: may be the wrong question asked

Depending on one's subjective viewpoints, we all have our own perfect solutionDepending on one's subjective viewpoints, we all have our own perfect solutionDepending on one's subjective viewpoints, we all have our own perfect solutionDepending on one's subjective viewpoints, we all have our own perfect solution

to the Budget. The Financial Secretary cannot possibly have the right answers forto the Budget. The Financial Secretary cannot possibly have the right answers forto the Budget. The Financial Secretary cannot possibly have the right answers forto the Budget. The Financial Secretary cannot possibly have the right answers for

everyone. However, if we accept as our primary aim to serve the long-term economiceveryone. However, if we accept as our primary aim to serve the long-term economiceveryone. However, if we accept as our primary aim to serve the long-term economiceveryone. However, if we accept as our primary aim to serve the long-term economic

interests of the economy as a whole, then there is a right time to do the right thing.interests of the economy as a whole, then there is a right time to do the right thing.interests of the economy as a whole, then there is a right time to do the right thing.interests of the economy as a whole, then there is a right time to do the right thing.

The key issues of this debate should no longer be a rush to hand back the few hundredThe key issues of this debate should no longer be a rush to hand back the few hundredThe key issues of this debate should no longer be a rush to hand back the few hundredThe key issues of this debate should no longer be a rush to hand back the few hundred

dollars in tax saving to the middle income group; we must first think through moredollars in tax saving to the middle income group; we must first think through moredollars in tax saving to the middle income group; we must first think through moredollars in tax saving to the middle income group; we must first think through more

coherently some of the fundamental issues raised by different Councillors, today andcoherently some of the fundamental issues raised by different Councillors, today andcoherently some of the fundamental issues raised by different Councillors, today andcoherently some of the fundamental issues raised by different Councillors, today and

yesterday:yesterday:yesterday:yesterday:

(1)(1)(1)(1) Has the Airport Core Programme, in short ACP, adversely affected the fundingHas the Airport Core Programme, in short ACP, adversely affected the fundingHas the Airport Core Programme, in short ACP, adversely affected the fundingHas the Airport Core Programme, in short ACP, adversely affected the funding

of other essential social services?of other essential social services?of other essential social services?of other essential social services?

(2)(2)(2)(2) In the light of the first question, are we then overtaxing or underspending?In the light of the first question, are we then overtaxing or underspending?In the light of the first question, are we then overtaxing or underspending?In the light of the first question, are we then overtaxing or underspending?

(3)(3)(3)(3) Can we now plan in greater confidence with a healthy reserve?Can we now plan in greater confidence with a healthy reserve?Can we now plan in greater confidence with a healthy reserve?Can we now plan in greater confidence with a healthy reserve?

III.III.III.III. Budget: a tool to confidently planBudget: a tool to confidently planBudget: a tool to confidently planBudget: a tool to confidently plan

A Budget is essentially a management planning tool to hA Budget is essentially a management planning tool to hA Budget is essentially a management planning tool to hA Budget is essentially a management planning tool to help deal with futureelp deal with futureelp deal with futureelp deal with future

uncertainties. The world economy was beset by uncertainties in the last few years.uncertainties. The world economy was beset by uncertainties in the last few years.uncertainties. The world economy was beset by uncertainties in the last few years.uncertainties. The world economy was beset by uncertainties in the last few years.

However, most, if not all, of these external uncertainties have now been resolved.However, most, if not all, of these external uncertainties have now been resolved.However, most, if not all, of these external uncertainties have now been resolved.However, most, if not all, of these external uncertainties have now been resolved.

Internally, the Government has put on a much tighter reign over pInternally, the Government has put on a much tighter reign over pInternally, the Government has put on a much tighter reign over pInternally, the Government has put on a much tighter reign over public expenditure.ublic expenditure.ublic expenditure.ublic expenditure.

There is already in place the much publicized austerity drive in the course of theThere is already in place the much publicized austerity drive in the course of theThere is already in place the much publicized austerity drive in the course of theThere is already in place the much publicized austerity drive in the course of the

coming three years. The fixed term price contracts would also imply greatercoming three years. The fixed term price contracts would also imply greatercoming three years. The fixed term price contracts would also imply greatercoming three years. The fixed term price contracts would also imply greater

certainty of cost control over major capital works. Unless there is still some hiddencertainty of cost control over major capital works. Unless there is still some hiddencertainty of cost control over major capital works. Unless there is still some hiddencertainty of cost control over major capital works. Unless there is still some hidden

agenda, for example, civil service pensions, the Government has not been placed inagenda, for example, civil service pensions, the Government has not been placed inagenda, for example, civil service pensions, the Government has not been placed inagenda, for example, civil service pensions, the Government has not been placed in

such a favourable position for some time to be able to plan confidently ahead.such a favourable position for some time to be able to plan confidently ahead.such a favourable position for some time to be able to plan confidently ahead.such a favourable position for some time to be able to plan confidently ahead.

IV.IV.IV.IV. Airport core programme (ACP): separate item in fundsAirport core programme (ACP): separate item in fundsAirport core programme (ACP): separate item in fundsAirport core programme (ACP): separate item in funds

The next step of confideThe next step of confideThe next step of confideThe next step of confident planning is to identify priority areas and to isolatent planning is to identify priority areas and to isolatent planning is to identify priority areas and to isolatent planning is to identify priority areas and to isolate

material risk factors. On both scores, the ACP stands out a mile from the rest. Hongmaterial risk factors. On both scores, the ACP stands out a mile from the rest. Hongmaterial risk factors. On both scores, the ACP stands out a mile from the rest. Hongmaterial risk factors. On both scores, the ACP stands out a mile from the rest. Hong

Kong is now irrevocably committed to building the new airport and its core programmes.Kong is now irrevocably committed to building the new airport and its core programmes.Kong is now irrevocably committed to building the new airport and its core programmes.Kong is now irrevocably committed to building the new airport and its core programmes.

The project is an one-off exercise of extraordinary magnitude. Except for governmentThe project is an one-off exercise of extraordinary magnitude. Except for governmentThe project is an one-off exercise of extraordinary magnitude. Except for governmentThe project is an one-off exercise of extraordinary magnitude. Except for government

funding and the requirement for construction workers, the ACP would not really crowdfunding and the requirement for construction workers, the ACP would not really crowdfunding and the requirement for construction workers, the ACP would not really crowdfunding and the requirement for construction workers, the ACP would not really crowd

out any scarce local resource. At least in principle, the project is supposed toout any scarce local resource. At least in principle, the project is supposed toout any scarce local resource. At least in principle, the project is supposed toout any scarce local resource. At least in principle, the project is supposed to

be managed along commercial lines and would attract new foreign investment capital.be managed along commercial lines and would attract new foreign investment capital.be managed along commercial lines and would attract new foreign investment capital.be managed along commercial lines and would attract new foreign investment capital.

It is therefore evident that the nature of the ACP expenditure can be distinguishedIt is therefore evident that the nature of the ACP expenditure can be distinguishedIt is therefore evident that the nature of the ACP expenditure can be distinguishedIt is therefore evident that the nature of the ACP expenditure can be distinguished

from other public expenditure and therefore lend itself to separate accountingfrom other public expenditure and therefore lend itself to separate accountingfrom other public expenditure and therefore lend itself to separate accountingfrom other public expenditure and therefore lend itself to separate accounting

treatment.treatment.treatment.treatment.

I suggest that the estI suggest that the estI suggest that the estI suggest that the estimated $120 billion costs of ACP be accounted for as aimated $120 billion costs of ACP be accounted for as aimated $120 billion costs of ACP be accounted for as aimated $120 billion costs of ACP be accounted for as a

separate item under Funds. The separate accounting will enable the public to easilyseparate item under Funds. The separate accounting will enable the public to easilyseparate item under Funds. The separate accounting will enable the public to easilyseparate item under Funds. The separate accounting will enable the public to easily

relate the size of tax increases, the transfer from Reserves to the need of therelate the size of tax increases, the transfer from Reserves to the need of therelate the size of tax increases, the transfer from Reserves to the need of therelate the size of tax increases, the transfer from Reserves to the need of the

appropriation to the Fund for the next five years in the medium-term forecast. Itappropriation to the Fund for the next five years in the medium-term forecast. Itappropriation to the Fund for the next five years in the medium-term forecast. Itappropriation to the Fund for the next five years in the medium-term forecast. It

also facilitates the effective monitoring of the overall progress and potential costalso facilitates the effective monitoring of the overall progress and potential costalso facilitates the effective monitoring of the overall progress and potential costalso facilitates the effective monitoring of the overall progress and potential cost

overrun. Last but certainly not least, I think that the costs of ACP ought to beoverrun. Last but certainly not least, I think that the costs of ACP ought to beoverrun. Last but certainly not least, I think that the costs of ACP ought to beoverrun. Last but certainly not least, I think that the costs of ACP ought to be

excluded from the trend calculations of total public expenditure against GDP and otherexcluded from the trend calculations of total public expenditure against GDP and otherexcluded from the trend calculations of total public expenditure against GDP and otherexcluded from the trend calculations of total public expenditure against GDP and other

guidelines such as "half our capital expenditure must be funded by a surplus onguidelines such as "half our capital expenditure must be funded by a surplus onguidelines such as "half our capital expenditure must be funded by a surplus onguidelines such as "half our capital expenditure must be funded by a surplus on

recurrent account".recurrent account".recurrent account".recurrent account".

I have great sympathy for the argument that the ACP should not adversely affectI have great sympathy for the argument that the ACP should not adversely affectI have great sympathy for the argument that the ACP should not adversely affectI have great sympathy for the argument that the ACP should not adversely affect

the normal pattern of recurrent public expenditure. Despite numerous accusationsthe normal pattern of recurrent public expenditure. Despite numerous accusationsthe normal pattern of recurrent public expenditure. Despite numerous accusationsthe normal pattern of recurrent public expenditure. Despite numerous accusations

that it will, the evidence is actually not clear. The Government has insisted thatthat it will, the evidence is actually not clear. The Government has insisted thatthat it will, the evidence is actually not clear. The Government has insisted thatthat it will, the evidence is actually not clear. The Government has insisted that

it can afford both. However, to lump the wildly fluctuating ACP costs in the trendit can afford both. However, to lump the wildly fluctuating ACP costs in the trendit can afford both. However, to lump the wildly fluctuating ACP costs in the trendit can afford both. However, to lump the wildly fluctuating ACP costs in the trend

calculations will seriously distort the issues in the eyes of the public. In thecalculations will seriously distort the issues in the eyes of the public. In thecalculations will seriously distort the issues in the eyes of the public. In thecalculations will seriously distort the issues in the eyes of the public. In the

short term, it may help the Government to hide its errors in cost control and mayshort term, it may help the Government to hide its errors in cost control and mayshort term, it may help the Government to hide its errors in cost control and mayshort term, it may help the Government to hide its errors in cost control and may

even indirectly help the cause of an austerity drive. However, in the long term,even indirectly help the cause of an austerity drive. However, in the long term,even indirectly help the cause of an austerity drive. However, in the long term,even indirectly help the cause of an austerity drive. However, in the long term,

when the ACP is completed, say, after 10 years, it would be exceedingly difficultwhen the ACP is completed, say, after 10 years, it would be exceedingly difficultwhen the ACP is completed, say, after 10 years, it would be exceedingly difficultwhen the ACP is completed, say, after 10 years, it would be exceedingly difficult

to argue the other way. For example, how can we convince the public to restoreto argue the other way. For example, how can we convince the public to restoreto argue the other way. For example, how can we convince the public to restoreto argue the other way. For example, how can we convince the public to restore

expenditure level back to the 16% GDP? The refinement in accounting will help usexpenditure level back to the 16% GDP? The refinement in accounting will help usexpenditure level back to the 16% GDP? The refinement in accounting will help usexpenditure level back to the 16% GDP? The refinement in accounting will help us

plan with greater precision and confidence.plan with greater precision and confidence.plan with greater precision and confidence.plan with greater precision and confidence.

V.V.V.V. Surplus: Surplus: Surplus: Surplus: are we overtaxing or underspendingare we overtaxing or underspendingare we overtaxing or underspendingare we overtaxing or underspending

My position on the level of taxation is clear. I have stated in the previousMy position on the level of taxation is clear. I have stated in the previousMy position on the level of taxation is clear. I have stated in the previousMy position on the level of taxation is clear. I have stated in the previous

motion debate on the overall review of taxation that I do not believe anyone in Hongmotion debate on the overall review of taxation that I do not believe anyone in Hongmotion debate on the overall review of taxation that I do not believe anyone in Hongmotion debate on the overall review of taxation that I do not believe anyone in Hong

Kong is being overtaxed. Despite the relatively heavier tax burden levied on theKong is being overtaxed. Despite the relatively heavier tax burden levied on theKong is being overtaxed. Despite the relatively heavier tax burden levied on theKong is being overtaxed. Despite the relatively heavier tax burden levied on the

middle income group, they are, on the whole, still better paid and less heavily taxedmiddle income group, they are, on the whole, still better paid and less heavily taxedmiddle income group, they are, on the whole, still better paid and less heavily taxedmiddle income group, they are, on the whole, still better paid and less heavily taxed

than their counterparts in many other developed countries.than their counterparts in many other developed countries.than their counterparts in many other developed countries.than their counterparts in many other developed countries.

I implore Members to think of social equalities not in terms of less civic dutyI implore Members to think of social equalities not in terms of less civic dutyI implore Members to think of social equalities not in terms of less civic dutyI implore Members to think of social equalities not in terms of less civic duty

but more in the way that we should spend on essential social services. At a timebut more in the way that we should spend on essential social services. At a timebut more in the way that we should spend on essential social services. At a timebut more in the way that we should spend on essential social services. At a time

when priority for new public spending is high but not always high enough, we mustwhen priority for new public spending is high but not always high enough, we mustwhen priority for new public spending is high but not always high enough, we mustwhen priority for new public spending is high but not always high enough, we must

first think of an increase in essential public expenditure rather than to save tax.first think of an increase in essential public expenditure rather than to save tax.first think of an increase in essential public expenditure rather than to save tax.first think of an increase in essential public expenditure rather than to save tax.

I believe that there is room for reviewing the total public expenditure ceiling ofI believe that there is room for reviewing the total public expenditure ceiling ofI believe that there is room for reviewing the total public expenditure ceiling ofI believe that there is room for reviewing the total public expenditure ceiling of

16% of estimated GDP. The rule of thumb was established well before the decision to16% of estimated GDP. The rule of thumb was established well before the decision to16% of estimated GDP. The rule of thumb was established well before the decision to16% of estimated GDP. The rule of thumb was established well before the decision to

go ahead with the ACP and there appears to be growing evidence that substantial wealthgo ahead with the ACP and there appears to be growing evidence that substantial wealthgo ahead with the ACP and there appears to be growing evidence that substantial wealthgo ahead with the ACP and there appears to be growing evidence that substantial wealth

of the Hong Kong people is now hidden overseas and in the Pearl River Delta. Theof the Hong Kong people is now hidden overseas and in the Pearl River Delta. Theof the Hong Kong people is now hidden overseas and in the Pearl River Delta. Theof the Hong Kong people is now hidden overseas and in the Pearl River Delta. The

GDP is rapidly losing its function as an accurate measurement of the real growth inGDP is rapidly losing its function as an accurate measurement of the real growth inGDP is rapidly losing its function as an accurate measurement of the real growth inGDP is rapidly losing its function as an accurate measurement of the real growth in

wealth of the Hong Kong people, and consequently their ability to pay tax. Persistentwealth of the Hong Kong people, and consequently their ability to pay tax. Persistentwealth of the Hong Kong people, and consequently their ability to pay tax. Persistentwealth of the Hong Kong people, and consequently their ability to pay tax. Persistent

underestimation of the above could lead to a growing gap between the tax collectedunderestimation of the above could lead to a growing gap between the tax collectedunderestimation of the above could lead to a growing gap between the tax collectedunderestimation of the above could lead to a growing gap between the tax collected

and the planned expenditure, in other words, greater surpluses. It could alsoand the planned expenditure, in other words, greater surpluses. It could alsoand the planned expenditure, in other words, greater surpluses. It could alsoand the planned expenditure, in other words, greater surpluses. It could also

undermine the overriding principle of allowing public spending to remain in line withundermine the overriding principle of allowing public spending to remain in line withundermine the overriding principle of allowing public spending to remain in line withundermine the overriding principle of allowing public spending to remain in line with

real economic growth.real economic growth.real economic growth.real economic growth.

It also seems apparent to me that the business community has been against socialIt also seems apparent to me that the business community has been against socialIt also seems apparent to me that the business community has been against socialIt also seems apparent to me that the business community has been against social

engineering. I will not presume that it is their wish to pay more profits tax justengineering. I will not presume that it is their wish to pay more profits tax justengineering. I will not presume that it is their wish to pay more profits tax justengineering. I will not presume that it is their wish to pay more profits tax just

to enable another group of taxpayers to pay less. In my personal view, it seems moreto enable another group of taxpayers to pay less. In my personal view, it seems moreto enable another group of taxpayers to pay less. In my personal view, it seems moreto enable another group of taxpayers to pay less. In my personal view, it seems more

likely that they are willing to contribute more mainly because of their support forlikely that they are willing to contribute more mainly because of their support forlikely that they are willing to contribute more mainly because of their support forlikely that they are willing to contribute more mainly because of their support for

the ACP and for the improvement of other essential services such as law and order,the ACP and for the improvement of other essential services such as law and order,the ACP and for the improvement of other essential services such as law and order,the ACP and for the improvement of other essential services such as law and order,

better education for our children, care for the disabled and the elderly.better education for our children, care for the disabled and the elderly.better education for our children, care for the disabled and the elderly.better education for our children, care for the disabled and the elderly.

VI.VI.VI.VI. Additional resAdditional resAdditional resAdditional reserves: help plan with commitmenterves: help plan with commitmenterves: help plan with commitmenterves: help plan with commitment

The people of Hong Kong believe that public expenditures nowadays evolve entirelyThe people of Hong Kong believe that public expenditures nowadays evolve entirelyThe people of Hong Kong believe that public expenditures nowadays evolve entirelyThe people of Hong Kong believe that public expenditures nowadays evolve entirely

around the ACP. The ACP seems to be the only certainty and everything else will havearound the ACP. The ACP seems to be the only certainty and everything else will havearound the ACP. The ACP seems to be the only certainty and everything else will havearound the ACP. The ACP seems to be the only certainty and everything else will have

to wait and see. From the way the Government handles its resource allocation exerciseto wait and see. From the way the Government handles its resource allocation exerciseto wait and see. From the way the Government handles its resource allocation exerciseto wait and see. From the way the Government handles its resource allocation exercise

and the apparent difficulties shown by some Policy Secretaries in making firmand the apparent difficulties shown by some Policy Secretaries in making firmand the apparent difficulties shown by some Policy Secretaries in making firmand the apparent difficulties shown by some Policy Secretaries in making firm

financial commitments beyond the next 12 months, it is probably not far from the truth.financial commitments beyond the next 12 months, it is probably not far from the truth.financial commitments beyond the next 12 months, it is probably not far from the truth.financial commitments beyond the next 12 months, it is probably not far from the truth.

In this increasingly political era, the Government ougIn this increasingly political era, the Government ougIn this increasingly political era, the Government ougIn this increasingly political era, the Government ought to demonstrate anht to demonstrate anht to demonstrate anht to demonstrate an

ability to make firm long-term commitments. Like politicians, Policy Secretariesability to make firm long-term commitments. Like politicians, Policy Secretariesability to make firm long-term commitments. Like politicians, Policy Secretariesability to make firm long-term commitments. Like politicians, Policy Secretaries

must be given some assurance that they can eventually deliver. At present, all Policymust be given some assurance that they can eventually deliver. At present, all Policymust be given some assurance that they can eventually deliver. At present, all Policymust be given some assurance that they can eventually deliver. At present, all Policy

Secretaries will have to return savings to a central pool and the reallocation ofSecretaries will have to return savings to a central pool and the reallocation ofSecretaries will have to return savings to a central pool and the reallocation ofSecretaries will have to return savings to a central pool and the reallocation of

the additional resources will be subject to protracted negotiations. Policythe additional resources will be subject to protracted negotiations. Policythe additional resources will be subject to protracted negotiations. Policythe additional resources will be subject to protracted negotiations. Policy

Secretaries are not guaranteed a satisfactory minimum baseline for the next year,Secretaries are not guaranteed a satisfactory minimum baseline for the next year,Secretaries are not guaranteed a satisfactory minimum baseline for the next year,Secretaries are not guaranteed a satisfactory minimum baseline for the next year,

let alone in future years. If such a restraint is placed on their heads, how can Policylet alone in future years. If such a restraint is placed on their heads, how can Policylet alone in future years. If such a restraint is placed on their heads, how can Policylet alone in future years. If such a restraint is placed on their heads, how can Policy

Secretaries sound committed in policy debates. The hollow tones that ring in theirSecretaries sound committed in policy debates. The hollow tones that ring in theirSecretaries sound committed in policy debates. The hollow tones that ring in theirSecretaries sound committed in policy debates. The hollow tones that ring in their

speeches make them easy preys for politicians. They lose more than just personalspeeches make them easy preys for politicians. They lose more than just personalspeeches make them easy preys for politicians. They lose more than just personalspeeches make them easy preys for politicians. They lose more than just personal

credibility. It is the collective image of the Government that is at stake.credibility. It is the collective image of the Government that is at stake.credibility. It is the collective image of the Government that is at stake.credibility. It is the collective image of the Government that is at stake.

From From From From the point where I stand, if the Government is unable to plan firmly ahead,the point where I stand, if the Government is unable to plan firmly ahead,the point where I stand, if the Government is unable to plan firmly ahead,the point where I stand, if the Government is unable to plan firmly ahead,

we might just as well hold the Motion of Thanks to the Governor's annual address afterwe might just as well hold the Motion of Thanks to the Governor's annual address afterwe might just as well hold the Motion of Thanks to the Governor's annual address afterwe might just as well hold the Motion of Thanks to the Governor's annual address after

the Budget debate. However, a positive attitude towards the use of our vast reservethe Budget debate. However, a positive attitude towards the use of our vast reservethe Budget debate. However, a positive attitude towards the use of our vast reservethe Budget debate. However, a positive attitude towards the use of our vast reserve

and a greater commitment to forward planning can change the story. I urge theand a greater commitment to forward planning can change the story. I urge theand a greater commitment to forward planning can change the story. I urge theand a greater commitment to forward planning can change the story. I urge the

Financial Secretary to openly commit to a minimum of 4.5% real growth on recurrentFinancial Secretary to openly commit to a minimum of 4.5% real growth on recurrentFinancial Secretary to openly commit to a minimum of 4.5% real growth on recurrentFinancial Secretary to openly commit to a minimum of 4.5% real growth on recurrent

expenditure for the next three years in each area of essential social servicesexpenditure for the next three years in each area of essential social servicesexpenditure for the next three years in each area of essential social servicesexpenditure for the next three years in each area of essential social services

including education, social welfare and law and order. The minimum growth rateincluding education, social welfare and law and order. The minimum growth rateincluding education, social welfare and law and order. The minimum growth rateincluding education, social welfare and law and order. The minimum growth rate

should be reviewed each year under a triennial rolling programme. The reserve willshould be reviewed each year under a triennial rolling programme. The reserve willshould be reviewed each year under a triennial rolling programme. The reserve willshould be reviewed each year under a triennial rolling programme. The reserve will

act as a buffer in the event that the actual GDP growth falls below 4.5%. The requestact as a buffer in the event that the actual GDP growth falls below 4.5%. The requestact as a buffer in the event that the actual GDP growth falls below 4.5%. The requestact as a buffer in the event that the actual GDP growth falls below 4.5%. The request

is absolutely in line with the confidence and forward planning that the Financialis absolutely in line with the confidence and forward planning that the Financialis absolutely in line with the confidence and forward planning that the Financialis absolutely in line with the confidence and forward planning that the Financial

Secretary preaches when he has decided not to adhere to the balanced budget approachSecretary preaches when he has decided not to adhere to the balanced budget approachSecretary preaches when he has decided not to adhere to the balanced budget approachSecretary preaches when he has decided not to adhere to the balanced budget approach

on a year to year basis.on a year to year basis.on a year to year basis.on a year to year basis.

VII.VII.VII.VII. Conclusion: do not leave the Government to plan ahead in fearConclusion: do not leave the Government to plan ahead in fearConclusion: do not leave the Government to plan ahead in fearConclusion: do not leave the Government to plan ahead in fear

Even before the BudgeEven before the BudgeEven before the BudgeEven before the Budget speech, I have publicly stated that I would accept a 1%t speech, I have publicly stated that I would accept a 1%t speech, I have publicly stated that I would accept a 1%t speech, I have publicly stated that I would accept a 1%

rise in profits tax if the Financial Secretary would give an undertaking not to raiserise in profits tax if the Financial Secretary would give an undertaking not to raiserise in profits tax if the Financial Secretary would give an undertaking not to raiserise in profits tax if the Financial Secretary would give an undertaking not to raise

it again in the next three years. I have also suggested a gradual increase of personalit again in the next three years. I have also suggested a gradual increase of personalit again in the next three years. I have also suggested a gradual increase of personalit again in the next three years. I have also suggested a gradual increase of personal

allowance over and above inflation rate during the same period of time.allowance over and above inflation rate during the same period of time.allowance over and above inflation rate during the same period of time.allowance over and above inflation rate during the same period of time.

With these provisos in place, I was one of the first among Members of this CouncilWith these provisos in place, I was one of the first among Members of this CouncilWith these provisos in place, I was one of the first among Members of this CouncilWith these provisos in place, I was one of the first among Members of this Council

to openly pledge support to the Budget. I did so not because of a desire to performto openly pledge support to the Budget. I did so not because of a desire to performto openly pledge support to the Budget. I did so not because of a desire to performto openly pledge support to the Budget. I did so not because of a desire to perform

some great feat to please the Financial Secretary, or for that matter, any othersome great feat to please the Financial Secretary, or for that matter, any othersome great feat to please the Financial Secretary, or for that matter, any othersome great feat to please the Financial Secretary, or for that matter, any other

audience. A point that I wish to emphasize is that in the realms of finance andaudience. A point that I wish to emphasize is that in the realms of finance andaudience. A point that I wish to emphasize is that in the realms of finance andaudience. A point that I wish to emphasize is that in the realms of finance and

taxation, there is great virture in certainty and stability of policy. We must nottaxation, there is great virture in certainty and stability of policy. We must nottaxation, there is great virture in certainty and stability of policy. We must nottaxation, there is great virture in certainty and stability of policy. We must not

leave the Government to plan ahead in fear. A lot of us would even be prepared toleave the Government to plan ahead in fear. A lot of us would even be prepared toleave the Government to plan ahead in fear. A lot of us would even be prepared toleave the Government to plan ahead in fear. A lot of us would even be prepared to

make a small personal sacrifice in the interest of the whole economy.make a small personal sacrifice in the interest of the whole economy.make a small personal sacrifice in the interest of the whole economy.make a small personal sacrifice in the interest of the whole economy.

The people of Hong Kong have now entrusted the Financial Secretary with a lotThe people of Hong Kong have now entrusted the Financial Secretary with a lotThe people of Hong Kong have now entrusted the Financial Secretary with a lotThe people of Hong Kong have now entrusted the Financial Secretary with a lot

of their hard earned savings. He has the responsibility to explain in greater detailof their hard earned savings. He has the responsibility to explain in greater detailof their hard earned savings. He has the responsibility to explain in greater detailof their hard earned savings. He has the responsibility to explain in greater detail

how he is to use that reserve. The vast reserves can be regarded by us as an insurancehow he is to use that reserve. The vast reserves can be regarded by us as an insurancehow he is to use that reserve. The vast reserves can be regarded by us as an insurancehow he is to use that reserve. The vast reserves can be regarded by us as an insurance

premium over and above a balanced budget and it would enable the Government to planpremium over and above a balanced budget and it would enable the Government to planpremium over and above a balanced budget and it would enable the Government to planpremium over and above a balanced budget and it would enable the Government to plan

ahead with confidence. The confidence in the Financial Secretary however can beahead with confidence. The confidence in the Financial Secretary however can beahead with confidence. The confidence in the Financial Secretary however can beahead with confidence. The confidence in the Financial Secretary however can be

destroyed if he insists on keeping his cards close to his chest and decides to makedestroyed if he insists on keeping his cards close to his chest and decides to makedestroyed if he insists on keeping his cards close to his chest and decides to makedestroyed if he insists on keeping his cards close to his chest and decides to make

up his own rules as he plays his hands. I therefore look forward to a frank andup his own rules as he plays his hands. I therefore look forward to a frank andup his own rules as he plays his hands. I therefore look forward to a frank andup his own rules as he plays his hands. I therefore look forward to a frank and

committed response from him in his reply next Wednesday.committed response from him in his reply next Wednesday.committed response from him in his reply next Wednesday.committed response from him in his reply next Wednesday.

With these remarks, MWith these remarks, MWith these remarks, MWith these remarks, Mr Deputy President, I support the motion.r Deputy President, I support the motion.r Deputy President, I support the motion.r Deputy President, I support the motion.

MR FRED LI (in Cantonese): Mr Deputy President, I and two other Members of MeetingMR FRED LI (in Cantonese): Mr Deputy President, I and two other Members of MeetingMR FRED LI (in Cantonese): Mr Deputy President, I and two other Members of MeetingMR FRED LI (in Cantonese): Mr Deputy President, I and two other Members of Meeting

Point in this Council will speak on different areas covered in the Budget Speech.Point in this Council will speak on different areas covered in the Budget Speech.Point in this Council will speak on different areas covered in the Budget Speech.Point in this Council will speak on different areas covered in the Budget Speech.

I will concentrate on the relationship between government expenditure and the GrossI will concentrate on the relationship between government expenditure and the GrossI will concentrate on the relationship between government expenditure and the GrossI will concentrate on the relationship between government expenditure and the Gross

Domestic Product, and social welfare spending. Mr TIK Chi-yuen will be speaking onDomestic Product, and social welfare spending. Mr TIK Chi-yuen will be speaking onDomestic Product, and social welfare spending. Mr TIK Chi-yuen will be speaking onDomestic Product, and social welfare spending. Mr TIK Chi-yuen will be speaking on

the tax burden of the middle class and public spending on education and medical andthe tax burden of the middle class and public spending on education and medical andthe tax burden of the middle class and public spending on education and medical andthe tax burden of the middle class and public spending on education and medical and

health services. Finally, Mr WONG Wai-yin will give a detailed analysis of the gaphealth services. Finally, Mr WONG Wai-yin will give a detailed analysis of the gaphealth services. Finally, Mr WONG Wai-yin will give a detailed analysis of the gaphealth services. Finally, Mr WONG Wai-yin will give a detailed analysis of the gap

between the rich and the poor.between the rich and the poor.between the rich and the poor.between the rich and the poor.

In presenting the Budget for 1992-93 the Government has adopted a more open policyIn presenting the Budget for 1992-93 the Government has adopted a more open policyIn presenting the Budget for 1992-93 the Government has adopted a more open policyIn presenting the Budget for 1992-93 the Government has adopted a more open policy

than was the case on previous occasions. It has taken the initiative at an earlythan was the case on previous occasions. It has taken the initiative at an earlythan was the case on previous occasions. It has taken the initiative at an earlythan was the case on previous occasions. It has taken the initiative at an early

stage to disseminate data to the media and conduct briefings on the key contents ofstage to disseminate data to the media and conduct briefings on the key contents ofstage to disseminate data to the media and conduct briefings on the key contents ofstage to disseminate data to the media and conduct briefings on the key contents of

the Budget. Meeting Point welcomes such sensible move which we believe is in linethe Budget. Meeting Point welcomes such sensible move which we believe is in linethe Budget. Meeting Point welcomes such sensible move which we believe is in linethe Budget. Meeting Point welcomes such sensible move which we believe is in line

with the political trend. It is unfortunate, however, that the formulation of thewith the political trend. It is unfortunate, however, that the formulation of thewith the political trend. It is unfortunate, however, that the formulation of thewith the political trend. It is unfortunate, however, that the formulation of the

Budget was done in absolute secrecy. I believe that not even the Executive Council,Budget was done in absolute secrecy. I believe that not even the Executive Council,Budget was done in absolute secrecy. I believe that not even the Executive Council,Budget was done in absolute secrecy. I believe that not even the Executive Council,

the Governor's closest advisory body was consulted on the Budget. The Executivethe Governor's closest advisory body was consulted on the Budget. The Executivethe Governor's closest advisory body was consulted on the Budget. The Executivethe Governor's closest advisory body was consulted on the Budget. The Executive

Councillors were only informed of its contents one day, twenty four hours to be exact,Councillors were only informed of its contents one day, twenty four hours to be exact,Councillors were only informed of its contents one day, twenty four hours to be exact,Councillors were only informed of its contents one day, twenty four hours to be exact,

before Members of this Council. It is not surprising then that even the Executivebefore Members of this Council. It is not surprising then that even the Executivebefore Members of this Council. It is not surprising then that even the Executivebefore Members of this Council. It is not surprising then that even the Executive

Councillors have found the Budget barely acceptable. But, after all, they will haveCouncillors have found the Budget barely acceptable. But, after all, they will haveCouncillors have found the Budget barely acceptable. But, after all, they will haveCouncillors have found the Budget barely acceptable. But, after all, they will have

to accept it.to accept it.to accept it.to accept it.

Before his Budget Speech, the Financial Secretary published an article in whichBefore his Budget Speech, the Financial Secretary published an article in whichBefore his Budget Speech, the Financial Secretary published an article in whichBefore his Budget Speech, the Financial Secretary published an article in which

he has indicated that he has forsaken the policy of positive non-intervention.he has indicated that he has forsaken the policy of positive non-intervention.he has indicated that he has forsaken the policy of positive non-intervention.he has indicated that he has forsaken the policy of positive non-intervention.

However, in the face of the structural transformation of our economy, demographicHowever, in the face of the structural transformation of our economy, demographicHowever, in the face of the structural transformation of our economy, demographicHowever, in the face of the structural transformation of our economy, demographic

changes, slow progress in the upgrading of our technological level, high inflation,changes, slow progress in the upgrading of our technological level, high inflation,changes, slow progress in the upgrading of our technological level, high inflation,changes, slow progress in the upgrading of our technological level, high inflation,

uneven distribution of wealth and revenues, and narrow tax base, people are actuallyuneven distribution of wealth and revenues, and narrow tax base, people are actuallyuneven distribution of wealth and revenues, and narrow tax base, people are actuallyuneven distribution of wealth and revenues, and narrow tax base, people are actually

hoping that the Financial Secretary will in his maiden Budget Speech lay down a morehoping that the Financial Secretary will in his maiden Budget Speech lay down a morehoping that the Financial Secretary will in his maiden Budget Speech lay down a morehoping that the Financial Secretary will in his maiden Budget Speech lay down a more

systematic and forward looking strategy to tackle our problems and to redefine thesystematic and forward looking strategy to tackle our problems and to redefine thesystematic and forward looking strategy to tackle our problems and to redefine thesystematic and forward looking strategy to tackle our problems and to redefine the

economic roles of the Hong Kong Government. It is unfortunate indeed that he waseconomic roles of the Hong Kong Government. It is unfortunate indeed that he waseconomic roles of the Hong Kong Government. It is unfortunate indeed that he waseconomic roles of the Hong Kong Government. It is unfortunate indeed that he was

only able in his speech moving the second reading of the motion to offer a veryonly able in his speech moving the second reading of the motion to offer a veryonly able in his speech moving the second reading of the motion to offer a veryonly able in his speech moving the second reading of the motion to offer a very

simplistic view of the key problems with which we are faced today. He effectivelysimplistic view of the key problems with which we are faced today. He effectivelysimplistic view of the key problems with which we are faced today. He effectivelysimplistic view of the key problems with which we are faced today. He effectively

reiterated the free market philosophy which has helped bring prosperity to Hong Kongreiterated the free market philosophy which has helped bring prosperity to Hong Kongreiterated the free market philosophy which has helped bring prosperity to Hong Kongreiterated the free market philosophy which has helped bring prosperity to Hong Kong

people. The Government's responsibility was very abstractly described to be one ofpeople. The Government's responsibility was very abstractly described to be one ofpeople. The Government's responsibility was very abstractly described to be one ofpeople. The Government's responsibility was very abstractly described to be one of

improving public services and to encourage enterprise and strike a right balanceimproving public services and to encourage enterprise and strike a right balanceimproving public services and to encourage enterprise and strike a right balanceimproving public services and to encourage enterprise and strike a right balance

between different kinds of investments by means of a liberal economic policy. Therebetween different kinds of investments by means of a liberal economic policy. Therebetween different kinds of investments by means of a liberal economic policy. Therebetween different kinds of investments by means of a liberal economic policy. There

is a lack of consistency between his words and deeds. I believe that the Governmentis a lack of consistency between his words and deeds. I believe that the Governmentis a lack of consistency between his words and deeds. I believe that the Governmentis a lack of consistency between his words and deeds. I believe that the Government

has failed to inspire confidence in its economic and fiscal policy among the varioushas failed to inspire confidence in its economic and fiscal policy among the varioushas failed to inspire confidence in its economic and fiscal policy among the varioushas failed to inspire confidence in its economic and fiscal policy among the various

sectors of society. We are still not getting any closer to finding a systematicsectors of society. We are still not getting any closer to finding a systematicsectors of society. We are still not getting any closer to finding a systematicsectors of society. We are still not getting any closer to finding a systematic

solution to any of the problems which Members said Hong Kong was faced with.solution to any of the problems which Members said Hong Kong was faced with.solution to any of the problems which Members said Hong Kong was faced with.solution to any of the problems which Members said Hong Kong was faced with.

Lately, the Government has been talking about controlling the size of the publicLately, the Government has been talking about controlling the size of the publicLately, the Government has been talking about controlling the size of the publicLately, the Government has been talking about controlling the size of the public

sector. On the one hand, the public spending to GDP ratio has to be controlled; onsector. On the one hand, the public spending to GDP ratio has to be controlled; onsector. On the one hand, the public spending to GDP ratio has to be controlled; onsector. On the one hand, the public spending to GDP ratio has to be controlled; on

the other hand, balance has to be maintained so that as much reserve as possible canthe other hand, balance has to be maintained so that as much reserve as possible canthe other hand, balance has to be maintained so that as much reserve as possible canthe other hand, balance has to be maintained so that as much reserve as possible can

be accumulated. It is on the basis of this philosophy that the recurrent spendingbe accumulated. It is on the basis of this philosophy that the recurrent spendingbe accumulated. It is on the basis of this philosophy that the recurrent spendingbe accumulated. It is on the basis of this philosophy that the recurrent spending

on the various public services has been undergoing retrenchment. Recurrent spendingon the various public services has been undergoing retrenchment. Recurrent spendingon the various public services has been undergoing retrenchment. Recurrent spendingon the various public services has been undergoing retrenchment. Recurrent spending

on existing services has to be cut on a yearly basis on the understanding that theon existing services has to be cut on a yearly basis on the understanding that theon existing services has to be cut on a yearly basis on the understanding that theon existing services has to be cut on a yearly basis on the understanding that the

cutback percentages over the three years will be in the order of 1%, 2.2% and 2.6%,cutback percentages over the three years will be in the order of 1%, 2.2% and 2.6%,cutback percentages over the three years will be in the order of 1%, 2.2% and 2.6%,cutback percentages over the three years will be in the order of 1%, 2.2% and 2.6%,

successively. Strong protest has been aired by both the providers and recipientssuccessively. Strong protest has been aired by both the providers and recipientssuccessively. Strong protest has been aired by both the providers and recipientssuccessively. Strong protest has been aired by both the providers and recipients

of the public services who have had to confront unnecessary difficulties. Theof the public services who have had to confront unnecessary difficulties. Theof the public services who have had to confront unnecessary difficulties. Theof the public services who have had to confront unnecessary difficulties. The

slashing of welfare spending is a case in point which I will elaborate on in a moment.slashing of welfare spending is a case in point which I will elaborate on in a moment.slashing of welfare spending is a case in point which I will elaborate on in a moment.slashing of welfare spending is a case in point which I will elaborate on in a moment.

However, the Government has evidently over-reacted, according to the data containedHowever, the Government has evidently over-reacted, according to the data containedHowever, the Government has evidently over-reacted, according to the data containedHowever, the Government has evidently over-reacted, according to the data contained

in the Budget for next financial year. The public spending ratio to GDP for 1991in the Budget for next financial year. The public spending ratio to GDP for 1991in the Budget for next financial year. The public spending ratio to GDP for 1991in the Budget for next financial year. The public spending ratio to GDP for 1991

- 92 has been revised from the projected 20.4% to merely 17.8%. Meanwhile, the- 92 has been revised from the projected 20.4% to merely 17.8%. Meanwhile, the- 92 has been revised from the projected 20.4% to merely 17.8%. Meanwhile, the- 92 has been revised from the projected 20.4% to merely 17.8%. Meanwhile, the

Sino-British Airport Memorandum, which many Members have touched upon in theirSino-British Airport Memorandum, which many Members have touched upon in theirSino-British Airport Memorandum, which many Members have touched upon in theirSino-British Airport Memorandum, which many Members have touched upon in their

speeches, has originally provided for a minimum reserve of $25 billion in 1997 tospeeches, has originally provided for a minimum reserve of $25 billion in 1997 tospeeches, has originally provided for a minimum reserve of $25 billion in 1997 tospeeches, has originally provided for a minimum reserve of $25 billion in 1997 to

be left to the SAR Government; now we figure the amount has already risen to $71.6be left to the SAR Government; now we figure the amount has already risen to $71.6be left to the SAR Government; now we figure the amount has already risen to $71.6be left to the SAR Government; now we figure the amount has already risen to $71.6

billion. It is our view that a flexibility should be exercised in the implementationbillion. It is our view that a flexibility should be exercised in the implementationbillion. It is our view that a flexibility should be exercised in the implementationbillion. It is our view that a flexibility should be exercised in the implementation

of the retrenchment on key areas so that provision will not lose its flexibility norof the retrenchment on key areas so that provision will not lose its flexibility norof the retrenchment on key areas so that provision will not lose its flexibility norof the retrenchment on key areas so that provision will not lose its flexibility nor

will social services be sacrificed as a result. Regarding the size of the public sector,will social services be sacrificed as a result. Regarding the size of the public sector,will social services be sacrificed as a result. Regarding the size of the public sector,will social services be sacrificed as a result. Regarding the size of the public sector,

in the affluent American and European societies, the public spending to GDP ratioin the affluent American and European societies, the public spending to GDP ratioin the affluent American and European societies, the public spending to GDP ratioin the affluent American and European societies, the public spending to GDP ratio

is in excess of 30% and the ratio is over 20% on average in Asia. The Budget predictsis in excess of 30% and the ratio is over 20% on average in Asia. The Budget predictsis in excess of 30% and the ratio is over 20% on average in Asia. The Budget predictsis in excess of 30% and the ratio is over 20% on average in Asia. The Budget predicts

that in the run-up to 1997 public spending will continue to account for under 20%that in the run-up to 1997 public spending will continue to account for under 20%that in the run-up to 1997 public spending will continue to account for under 20%that in the run-up to 1997 public spending will continue to account for under 20%

of the GDP so practically, there is no need for the Government to over-react.of the GDP so practically, there is no need for the Government to over-react.of the GDP so practically, there is no need for the Government to over-react.of the GDP so practically, there is no need for the Government to over-react.

As a social worker I like toAs a social worker I like toAs a social worker I like toAs a social worker I like to use the time now to offer my view on welfare spending. use the time now to offer my view on welfare spending. use the time now to offer my view on welfare spending. use the time now to offer my view on welfare spending.

I think there is a lot of confusion regarding welfare spending which varied from theI think there is a lot of confusion regarding welfare spending which varied from theI think there is a lot of confusion regarding welfare spending which varied from theI think there is a lot of confusion regarding welfare spending which varied from the

estimated figure given in the Budget for next year to the figure which appeared inestimated figure given in the Budget for next year to the figure which appeared inestimated figure given in the Budget for next year to the figure which appeared inestimated figure given in the Budget for next year to the figure which appeared in

the interim revision. Different stories are making their rounds with one saying thatthe interim revision. Different stories are making their rounds with one saying thatthe interim revision. Different stories are making their rounds with one saying thatthe interim revision. Different stories are making their rounds with one saying that

there will be a rise of 2.8%, and another saying that there will be an increase ofthere will be a rise of 2.8%, and another saying that there will be an increase ofthere will be a rise of 2.8%, and another saying that there will be an increase ofthere will be a rise of 2.8%, and another saying that there will be an increase of

over 10%. I like to quote the figure given in the most official reply to date, byover 10%. I like to quote the figure given in the most official reply to date, byover 10%. I like to quote the figure given in the most official reply to date, byover 10%. I like to quote the figure given in the most official reply to date, by

the Secretary for the Treasury, Mr YEUNG Kai-yin, which is 3.6%. Welfare spendingthe Secretary for the Treasury, Mr YEUNG Kai-yin, which is 3.6%. Welfare spendingthe Secretary for the Treasury, Mr YEUNG Kai-yin, which is 3.6%. Welfare spendingthe Secretary for the Treasury, Mr YEUNG Kai-yin, which is 3.6%. Welfare spending

in real terms for 1992-93 will be up over the previous year 1991-92 by 3.6%. I believein real terms for 1992-93 will be up over the previous year 1991-92 by 3.6%. I believein real terms for 1992-93 will be up over the previous year 1991-92 by 3.6%. I believein real terms for 1992-93 will be up over the previous year 1991-92 by 3.6%. I believe

that this, when compared to the commitment made in the White Paper on Social Welfarethat this, when compared to the commitment made in the White Paper on Social Welfarethat this, when compared to the commitment made in the White Paper on Social Welfarethat this, when compared to the commitment made in the White Paper on Social Welfare

for an annual increase of 4.5%, is already on the low side. Given the enormous reservefor an annual increase of 4.5%, is already on the low side. Given the enormous reservefor an annual increase of 4.5%, is already on the low side. Given the enormous reservefor an annual increase of 4.5%, is already on the low side. Given the enormous reserve

we have achieved this year, there is no reason whatsoever why social welfare spendingwe have achieved this year, there is no reason whatsoever why social welfare spendingwe have achieved this year, there is no reason whatsoever why social welfare spendingwe have achieved this year, there is no reason whatsoever why social welfare spending

should be squeezed. It has been effectively cut back to a level lower than that givenshould be squeezed. It has been effectively cut back to a level lower than that givenshould be squeezed. It has been effectively cut back to a level lower than that givenshould be squeezed. It has been effectively cut back to a level lower than that given

in some of the guidelines in the "Social Welfare into the 1990s and Beyond" --in some of the guidelines in the "Social Welfare into the 1990s and Beyond" --in some of the guidelines in the "Social Welfare into the 1990s and Beyond" --in some of the guidelines in the "Social Welfare into the 1990s and Beyond" --

published last year.published last year.published last year.published last year.

Many services which have been identified for improvement will not see anyMany services which have been identified for improvement will not see anyMany services which have been identified for improvement will not see anyMany services which have been identified for improvement will not see any

amelioration this financial year 1992-93. For example the Government has undertakenamelioration this financial year 1992-93. For example the Government has undertakenamelioration this financial year 1992-93. For example the Government has undertakenamelioration this financial year 1992-93. For example the Government has undertaken

to improve the ratio of school social worker to students from 1 to 3 000 to 1 toto improve the ratio of school social worker to students from 1 to 3 000 to 1 toto improve the ratio of school social worker to students from 1 to 3 000 to 1 toto improve the ratio of school social worker to students from 1 to 3 000 to 1 to

2 500, but this improvement is unlikely to materialize in 1992-93, unless extra funds2 500, but this improvement is unlikely to materialize in 1992-93, unless extra funds2 500, but this improvement is unlikely to materialize in 1992-93, unless extra funds2 500, but this improvement is unlikely to materialize in 1992-93, unless extra funds

are forthcoming. A total of eight elderly centres cannot open in this year due toare forthcoming. A total of eight elderly centres cannot open in this year due toare forthcoming. A total of eight elderly centres cannot open in this year due toare forthcoming. A total of eight elderly centres cannot open in this year due to

the financial constraint. Recently the OMELCO has received petitions (there isthe financial constraint. Recently the OMELCO has received petitions (there isthe financial constraint. Recently the OMELCO has received petitions (there isthe financial constraint. Recently the OMELCO has received petitions (there is

another scheduled tomorrow) from organizations which are opposed to the slashing ofanother scheduled tomorrow) from organizations which are opposed to the slashing ofanother scheduled tomorrow) from organizations which are opposed to the slashing ofanother scheduled tomorrow) from organizations which are opposed to the slashing of

recurrent spending on youth centres, with each centre sustaining a cutback of $15,000recurrent spending on youth centres, with each centre sustaining a cutback of $15,000recurrent spending on youth centres, with each centre sustaining a cutback of $15,000recurrent spending on youth centres, with each centre sustaining a cutback of $15,000

to $21,000. The figure sounds small but to the centres involved, which are runningto $21,000. The figure sounds small but to the centres involved, which are runningto $21,000. The figure sounds small but to the centres involved, which are runningto $21,000. The figure sounds small but to the centres involved, which are running

on a monthly budget of slightly over $1,000, any further reduction will cause extremeon a monthly budget of slightly over $1,000, any further reduction will cause extremeon a monthly budget of slightly over $1,000, any further reduction will cause extremeon a monthly budget of slightly over $1,000, any further reduction will cause extreme

hardship. Youth services are of course under review at this point, but even beforehardship. Youth services are of course under review at this point, but even beforehardship. Youth services are of course under review at this point, but even beforehardship. Youth services are of course under review at this point, but even before

the review in 1992-93 is conducted, they have already been affected by thethe review in 1992-93 is conducted, they have already been affected by thethe review in 1992-93 is conducted, they have already been affected by thethe review in 1992-93 is conducted, they have already been affected by the

retrenchment policy. Even at a time when economic conditions are relativelyretrenchment policy. Even at a time when economic conditions are relativelyretrenchment policy. Even at a time when economic conditions are relativelyretrenchment policy. Even at a time when economic conditions are relatively

favourable, social welfare spending has to be controlled like this. When thefavourable, social welfare spending has to be controlled like this. When thefavourable, social welfare spending has to be controlled like this. When thefavourable, social welfare spending has to be controlled like this. When the

conditions are less favourable than they are now, social welfare will definitely beconditions are less favourable than they are now, social welfare will definitely beconditions are less favourable than they are now, social welfare will definitely beconditions are less favourable than they are now, social welfare will definitely be

the first to fall victim to the expected belt-tightening measures. As a matter ofthe first to fall victim to the expected belt-tightening measures. As a matter ofthe first to fall victim to the expected belt-tightening measures. As a matter ofthe first to fall victim to the expected belt-tightening measures. As a matter of

fact, social welfare spending has always been maintained at a very low level,fact, social welfare spending has always been maintained at a very low level,fact, social welfare spending has always been maintained at a very low level,fact, social welfare spending has always been maintained at a very low level,

accounting for 6.5% of the total public expenditure. The percentage will fall toaccounting for 6.5% of the total public expenditure. The percentage will fall toaccounting for 6.5% of the total public expenditure. The percentage will fall toaccounting for 6.5% of the total public expenditure. The percentage will fall to

5.9% in 1992-93, and 5.5% in 1993-94. This prompts me to ask whether the prospect5.9% in 1992-93, and 5.5% in 1993-94. This prompts me to ask whether the prospect5.9% in 1992-93, and 5.5% in 1993-94. This prompts me to ask whether the prospect5.9% in 1992-93, and 5.5% in 1993-94. This prompts me to ask whether the prospect

of social welfare will be gloomier and our own and indeed the Government's commitmentof social welfare will be gloomier and our own and indeed the Government's commitmentof social welfare will be gloomier and our own and indeed the Government's commitmentof social welfare will be gloomier and our own and indeed the Government's commitment

to social welfare will become lesser.to social welfare will become lesser.to social welfare will become lesser.to social welfare will become lesser.

On the question of tax revenue, since mOn the question of tax revenue, since mOn the question of tax revenue, since mOn the question of tax revenue, since many Members have already offered theirany Members have already offered theirany Members have already offered theirany Members have already offered their

views from the three perspectives, I do not think it is appropriate to repeat theviews from the three perspectives, I do not think it is appropriate to repeat theviews from the three perspectives, I do not think it is appropriate to repeat theviews from the three perspectives, I do not think it is appropriate to repeat the

points they have made, except maybe to quote (which some Members have also done so)points they have made, except maybe to quote (which some Members have also done so)points they have made, except maybe to quote (which some Members have also done so)points they have made, except maybe to quote (which some Members have also done so)

an opinion survey commissioned by the media. The survey indicates that 80% of thean opinion survey commissioned by the media. The survey indicates that 80% of thean opinion survey commissioned by the media. The survey indicates that 80% of thean opinion survey commissioned by the media. The survey indicates that 80% of the

people are against the proposed raise of the personal allowance to a mere $46,000.people are against the proposed raise of the personal allowance to a mere $46,000.people are against the proposed raise of the personal allowance to a mere $46,000.people are against the proposed raise of the personal allowance to a mere $46,000.

Of this 80%, 70% suggested that the allowance be raised to between $50,000 and $60,000.Of this 80%, 70% suggested that the allowance be raised to between $50,000 and $60,000.Of this 80%, 70% suggested that the allowance be raised to between $50,000 and $60,000.Of this 80%, 70% suggested that the allowance be raised to between $50,000 and $60,000.

Indeed, the personal allowance proposed by our colleagues of the Co-operativeIndeed, the personal allowance proposed by our colleagues of the Co-operativeIndeed, the personal allowance proposed by our colleagues of the Co-operativeIndeed, the personal allowance proposed by our colleagues of the Co-operative

Resources Centre (CRC) has the clear support of 29.1% of the people polled. We,Resources Centre (CRC) has the clear support of 29.1% of the people polled. We,Resources Centre (CRC) has the clear support of 29.1% of the people polled. We,Resources Centre (CRC) has the clear support of 29.1% of the people polled. We,

Meeting Point Members, have proposed a personal allowance of $60,000, which enjoysMeeting Point Members, have proposed a personal allowance of $60,000, which enjoysMeeting Point Members, have proposed a personal allowance of $60,000, which enjoysMeeting Point Members, have proposed a personal allowance of $60,000, which enjoys

a close 25.6% support. If CRC and Meeting Point can join forces with the Uniteda close 25.6% support. If CRC and Meeting Point can join forces with the Uniteda close 25.6% support. If CRC and Meeting Point can join forces with the Uniteda close 25.6% support. If CRC and Meeting Point can join forces with the United

Democrats of Hong Kong (UDHK) and do some hard bargaining with the threat of votingDemocrats of Hong Kong (UDHK) and do some hard bargaining with the threat of votingDemocrats of Hong Kong (UDHK) and do some hard bargaining with the threat of votingDemocrats of Hong Kong (UDHK) and do some hard bargaining with the threat of voting

down the Appropriation Bill, then I have very good reason to believe that thedown the Appropriation Bill, then I have very good reason to believe that thedown the Appropriation Bill, then I have very good reason to believe that thedown the Appropriation Bill, then I have very good reason to believe that the

Government will on the basis of such strongly expressed public opinion raise theGovernment will on the basis of such strongly expressed public opinion raise theGovernment will on the basis of such strongly expressed public opinion raise theGovernment will on the basis of such strongly expressed public opinion raise the

personal allowance. It is unfortunate that three weeks have elapsed and my dreampersonal allowance. It is unfortunate that three weeks have elapsed and my dreampersonal allowance. It is unfortunate that three weeks have elapsed and my dreampersonal allowance. It is unfortunate that three weeks have elapsed and my dream

of collaboration has burst like a bubble.of collaboration has burst like a bubble.of collaboration has burst like a bubble.of collaboration has burst like a bubble.

On the issue of tax band, there is not much I wish to add because I unreservedlyOn the issue of tax band, there is not much I wish to add because I unreservedlyOn the issue of tax band, there is not much I wish to add because I unreservedlyOn the issue of tax band, there is not much I wish to add because I unreservedly

support the views expressed by all Members on the plight of the middle income earners,support the views expressed by all Members on the plight of the middle income earners,support the views expressed by all Members on the plight of the middle income earners,support the views expressed by all Members on the plight of the middle income earners,

or the sandwich class if I may borrow a term which Mr Eric LI said we have been usingor the sandwich class if I may borrow a term which Mr Eric LI said we have been usingor the sandwich class if I may borrow a term which Mr Eric LI said we have been usingor the sandwich class if I may borrow a term which Mr Eric LI said we have been using

a lot the past couple of days. I am all for widening the tax band; even the proposala lot the past couple of days. I am all for widening the tax band; even the proposala lot the past couple of days. I am all for widening the tax band; even the proposala lot the past couple of days. I am all for widening the tax band; even the proposal

of CRC to broaden it from $20,000 to $30,000 has my full support.of CRC to broaden it from $20,000 to $30,000 has my full support.of CRC to broaden it from $20,000 to $30,000 has my full support.of CRC to broaden it from $20,000 to $30,000 has my full support.

Regarding next year's Budget, I would like to appeal to the Financial SecretaryRegarding next year's Budget, I would like to appeal to the Financial SecretaryRegarding next year's Budget, I would like to appeal to the Financial SecretaryRegarding next year's Budget, I would like to appeal to the Financial Secretary

to give serious consideration to the tax burden of the middle income earners. Into give serious consideration to the tax burden of the middle income earners. Into give serious consideration to the tax burden of the middle income earners. Into give serious consideration to the tax burden of the middle income earners. In

his speech later today Mr WONG Wai-yin will speak on the phenomenon that, in termshis speech later today Mr WONG Wai-yin will speak on the phenomenon that, in termshis speech later today Mr WONG Wai-yin will speak on the phenomenon that, in termshis speech later today Mr WONG Wai-yin will speak on the phenomenon that, in terms

of revenue from direct tax, the proportional contribution of salaries tax has becomeof revenue from direct tax, the proportional contribution of salaries tax has becomeof revenue from direct tax, the proportional contribution of salaries tax has becomeof revenue from direct tax, the proportional contribution of salaries tax has become

increasingly large while that of profits tax has become increasingly small and theincreasingly large while that of profits tax has become increasingly small and theincreasingly large while that of profits tax has become increasingly small and theincreasingly large while that of profits tax has become increasingly small and the

fact that this has translated into a particularly heavy tax burden for the middlefact that this has translated into a particularly heavy tax burden for the middlefact that this has translated into a particularly heavy tax burden for the middlefact that this has translated into a particularly heavy tax burden for the middle

income group.income group.income group.income group.

On the issue of rates, according to the data from the Rating and ValuationOn the issue of rates, according to the data from the Rating and ValuationOn the issue of rates, according to the data from the Rating and ValuationOn the issue of rates, according to the data from the Rating and Valuation

Department, a 2.5% rates increase for next year will mean effectively additionalDepartment, a 2.5% rates increase for next year will mean effectively additionalDepartment, a 2.5% rates increase for next year will mean effectively additionalDepartment, a 2.5% rates increase for next year will mean effectively additional

charges by 25% for 5.5% of residential premises and 50.1% of non-residential premises,charges by 25% for 5.5% of residential premises and 50.1% of non-residential premises,charges by 25% for 5.5% of residential premises and 50.1% of non-residential premises,charges by 25% for 5.5% of residential premises and 50.1% of non-residential premises,

and additional charges by 73% for office premises on average. These increases willand additional charges by 73% for office premises on average. These increases willand additional charges by 73% for office premises on average. These increases willand additional charges by 73% for office premises on average. These increases will

definitely further aggravate inflation. In 1994, barring anything unexpected, adefinitely further aggravate inflation. In 1994, barring anything unexpected, adefinitely further aggravate inflation. In 1994, barring anything unexpected, adefinitely further aggravate inflation. In 1994, barring anything unexpected, a

reassessment will be conducted of rateable value; even if in the odd event of areassessment will be conducted of rateable value; even if in the odd event of areassessment will be conducted of rateable value; even if in the odd event of areassessment will be conducted of rateable value; even if in the odd event of a

reassessment being conducted in 1993, the raised charges will account for a largerreassessment being conducted in 1993, the raised charges will account for a largerreassessment being conducted in 1993, the raised charges will account for a largerreassessment being conducted in 1993, the raised charges will account for a larger

proportion of people's income. Although the Government has repeatedly defendedproportion of people's income. Although the Government has repeatedly defendedproportion of people's income. Although the Government has repeatedly defendedproportion of people's income. Although the Government has repeatedly defended

itself by saying that rates were set at as high as 18% in 1976 and that the presentitself by saying that rates were set at as high as 18% in 1976 and that the presentitself by saying that rates were set at as high as 18% in 1976 and that the presentitself by saying that rates were set at as high as 18% in 1976 and that the present

5.6% or 6% is in fact extremely low. But we can see from the figures that revenue5.6% or 6% is in fact extremely low. But we can see from the figures that revenue5.6% or 6% is in fact extremely low. But we can see from the figures that revenue5.6% or 6% is in fact extremely low. But we can see from the figures that revenue

from rates has consistently been rather considerable in real terms, be the percentagefrom rates has consistently been rather considerable in real terms, be the percentagefrom rates has consistently been rather considerable in real terms, be the percentagefrom rates has consistently been rather considerable in real terms, be the percentage

set at 18%, 17%, 16% or even a low 5.5%. The recurring review of rateable value isset at 18%, 17%, 16% or even a low 5.5%. The recurring review of rateable value isset at 18%, 17%, 16% or even a low 5.5%. The recurring review of rateable value isset at 18%, 17%, 16% or even a low 5.5%. The recurring review of rateable value is

the reason for this. As such, the lowering of rates does not have any impact on thethe reason for this. As such, the lowering of rates does not have any impact on thethe reason for this. As such, the lowering of rates does not have any impact on thethe reason for this. As such, the lowering of rates does not have any impact on the

actual revenue of the Government. In this connection, I wish the Government wouldactual revenue of the Government. In this connection, I wish the Government wouldactual revenue of the Government. In this connection, I wish the Government wouldactual revenue of the Government. In this connection, I wish the Government would

not present the calculation of rates by means of percentages; we should be able tonot present the calculation of rates by means of percentages; we should be able tonot present the calculation of rates by means of percentages; we should be able tonot present the calculation of rates by means of percentages; we should be able to

see that rates have been a large source of revenue to the Government coffers.see that rates have been a large source of revenue to the Government coffers.see that rates have been a large source of revenue to the Government coffers.see that rates have been a large source of revenue to the Government coffers.

Since I am giving my speech a bit later than many Members who have already madeSince I am giving my speech a bit later than many Members who have already madeSince I am giving my speech a bit later than many Members who have already madeSince I am giving my speech a bit later than many Members who have already made

their responses to the political incident, which in fact has just been mentioned bytheir responses to the political incident, which in fact has just been mentioned bytheir responses to the political incident, which in fact has just been mentioned bytheir responses to the political incident, which in fact has just been mentioned by

Mr LEE Wing-tat, I will try to be very brief on this point. As a new Member to theMr LEE Wing-tat, I will try to be very brief on this point. As a new Member to theMr LEE Wing-tat, I will try to be very brief on this point. As a new Member to theMr LEE Wing-tat, I will try to be very brief on this point. As a new Member to the

Council, and commenting on the Budget for the first time, I am afraid I will makeCouncil, and commenting on the Budget for the first time, I am afraid I will makeCouncil, and commenting on the Budget for the first time, I am afraid I will makeCouncil, and commenting on the Budget for the first time, I am afraid I will make

some redundant points which I hope colleagues will not mind, because these are issuessome redundant points which I hope colleagues will not mind, because these are issuessome redundant points which I hope colleagues will not mind, because these are issuessome redundant points which I hope colleagues will not mind, because these are issues

which have been very much on my mind.which have been very much on my mind.which have been very much on my mind.which have been very much on my mind.

If, in order to sustain the credibility of the Government, no amendments may beIf, in order to sustain the credibility of the Government, no amendments may beIf, in order to sustain the credibility of the Government, no amendments may beIf, in order to sustain the credibility of the Government, no amendments may be

made to the Budget, no objection may be raised, and no other alternatives but to acceptmade to the Budget, no objection may be raised, and no other alternatives but to acceptmade to the Budget, no objection may be raised, and no other alternatives but to acceptmade to the Budget, no objection may be raised, and no other alternatives but to accept

the Government's two postdated-cheque promises, then I cannot but wonder whatthe Government's two postdated-cheque promises, then I cannot but wonder whatthe Government's two postdated-cheque promises, then I cannot but wonder whatthe Government's two postdated-cheque promises, then I cannot but wonder what

credibility and what kind of status do we have as Legislative Councillors in thecredibility and what kind of status do we have as Legislative Councillors in thecredibility and what kind of status do we have as Legislative Councillors in thecredibility and what kind of status do we have as Legislative Councillors in the

public's mind. And what of our reliability as elected Members? What are the voterspublic's mind. And what of our reliability as elected Members? What are the voterspublic's mind. And what of our reliability as elected Members? What are the voterspublic's mind. And what of our reliability as elected Members? What are the voters

expecting of us? Can we just leave the Budget as it is and let it pass without raisingexpecting of us? Can we just leave the Budget as it is and let it pass without raisingexpecting of us? Can we just leave the Budget as it is and let it pass without raisingexpecting of us? Can we just leave the Budget as it is and let it pass without raising

any objection or making any amendment? The Legislative Council has been regardedany objection or making any amendment? The Legislative Council has been regardedany objection or making any amendment? The Legislative Council has been regardedany objection or making any amendment? The Legislative Council has been regarded

as an advisory body by the Chinese Government in a rather dismissive manner. Thisas an advisory body by the Chinese Government in a rather dismissive manner. Thisas an advisory body by the Chinese Government in a rather dismissive manner. Thisas an advisory body by the Chinese Government in a rather dismissive manner. This

view has been rebutted by the Governor who makes it clear that the Legislative Councilview has been rebutted by the Governor who makes it clear that the Legislative Councilview has been rebutted by the Governor who makes it clear that the Legislative Councilview has been rebutted by the Governor who makes it clear that the Legislative Council

is a potent body which has the power to control Government finance and to passis a potent body which has the power to control Government finance and to passis a potent body which has the power to control Government finance and to passis a potent body which has the power to control Government finance and to pass

legislation. Obviously, we can now exercise the power of whether or not to vote forlegislation. Obviously, we can now exercise the power of whether or not to vote forlegislation. Obviously, we can now exercise the power of whether or not to vote forlegislation. Obviously, we can now exercise the power of whether or not to vote for

the appropriation of funds, whether or not indeed to endorse the Budget. However,the appropriation of funds, whether or not indeed to endorse the Budget. However,the appropriation of funds, whether or not indeed to endorse the Budget. However,the appropriation of funds, whether or not indeed to endorse the Budget. However,

we have been asked repeatedly by the Government not to make amendments; we have beenwe have been asked repeatedly by the Government not to make amendments; we have beenwe have been asked repeatedly by the Government not to make amendments; we have beenwe have been asked repeatedly by the Government not to make amendments; we have been

told in fact that no amendment or objection is acceptable. Our proposed motion fortold in fact that no amendment or objection is acceptable. Our proposed motion fortold in fact that no amendment or objection is acceptable. Our proposed motion fortold in fact that no amendment or objection is acceptable. Our proposed motion for

amendments has been rejected. Is this not a typical example of double standard?amendments has been rejected. Is this not a typical example of double standard?amendments has been rejected. Is this not a typical example of double standard?amendments has been rejected. Is this not a typical example of double standard?

I think Mr MacLEOD is a I think Mr MacLEOD is a I think Mr MacLEOD is a I think Mr MacLEOD is a very responsible Financial Secretary. Since his Budgetvery responsible Financial Secretary. Since his Budgetvery responsible Financial Secretary. Since his Budgetvery responsible Financial Secretary. Since his Budget

Speech, he has met twice with Members of this Council and finally made two promises.Speech, he has met twice with Members of this Council and finally made two promises.Speech, he has met twice with Members of this Council and finally made two promises.Speech, he has met twice with Members of this Council and finally made two promises.

I think he has done that purely in view of the one weapon which we have, namely, toI think he has done that purely in view of the one weapon which we have, namely, toI think he has done that purely in view of the one weapon which we have, namely, toI think he has done that purely in view of the one weapon which we have, namely, to

vote down the Appropriation Bill. If we declared at the outset that we would notvote down the Appropriation Bill. If we declared at the outset that we would notvote down the Appropriation Bill. If we declared at the outset that we would notvote down the Appropriation Bill. If we declared at the outset that we would not

resort to this weapon, then we are totally defenceless because we have literallyresort to this weapon, then we are totally defenceless because we have literallyresort to this weapon, then we are totally defenceless because we have literallyresort to this weapon, then we are totally defenceless because we have literally

surrendered already. I am reluctant to use this weapon, but recently, in a numbersurrendered already. I am reluctant to use this weapon, but recently, in a numbersurrendered already. I am reluctant to use this weapon, but recently, in a numbersurrendered already. I am reluctant to use this weapon, but recently, in a number

of meetings with my constituents (I am not sure if Mr Andrew WONG has done likewise),of meetings with my constituents (I am not sure if Mr Andrew WONG has done likewise),of meetings with my constituents (I am not sure if Mr Andrew WONG has done likewise),of meetings with my constituents (I am not sure if Mr Andrew WONG has done likewise),

I made a point of informing them of the pros and cons of voting down the AppropriationI made a point of informing them of the pros and cons of voting down the AppropriationI made a point of informing them of the pros and cons of voting down the AppropriationI made a point of informing them of the pros and cons of voting down the Appropriation

Bill, and the crisis which the Government will be faced with if the AppropriationBill, and the crisis which the Government will be faced with if the AppropriationBill, and the crisis which the Government will be faced with if the AppropriationBill, and the crisis which the Government will be faced with if the Appropriation

Bill is voted down. But they voiced no objection to my rejection of the Bill andBill is voted down. But they voiced no objection to my rejection of the Bill andBill is voted down. But they voiced no objection to my rejection of the Bill andBill is voted down. But they voiced no objection to my rejection of the Bill and

were all for me to exercise my right to cast a dissenting vote. I have to be answerablewere all for me to exercise my right to cast a dissenting vote. I have to be answerablewere all for me to exercise my right to cast a dissenting vote. I have to be answerablewere all for me to exercise my right to cast a dissenting vote. I have to be answerable

to my constituents and act as requested.to my constituents and act as requested.to my constituents and act as requested.to my constituents and act as requested.

I agree perfectly that voting is a very serious matter and to cast a dissentingI agree perfectly that voting is a very serious matter and to cast a dissentingI agree perfectly that voting is a very serious matter and to cast a dissentingI agree perfectly that voting is a very serious matter and to cast a dissenting

vote has serious consequences. But I will reject the Bill in the hope that amendmentsvote has serious consequences. But I will reject the Bill in the hope that amendmentsvote has serious consequences. But I will reject the Bill in the hope that amendmentsvote has serious consequences. But I will reject the Bill in the hope that amendments

can be made to the Budget and in the hope that the Government can give us a positivecan be made to the Budget and in the hope that the Government can give us a positivecan be made to the Budget and in the hope that the Government can give us a positivecan be made to the Budget and in the hope that the Government can give us a positive

response on 1 April.response on 1 April.response on 1 April.response on 1 April.

Mr Deputy President, with these remarks, I cannot accept the moMr Deputy President, with these remarks, I cannot accept the moMr Deputy President, with these remarks, I cannot accept the moMr Deputy President, with these remarks, I cannot accept the motion.tion.tion.tion.

PROF FELICE LIEH MAK: Mr Deputy President, the Financial Secretary must bePROF FELICE LIEH MAK: Mr Deputy President, the Financial Secretary must bePROF FELICE LIEH MAK: Mr Deputy President, the Financial Secretary must bePROF FELICE LIEH MAK: Mr Deputy President, the Financial Secretary must be

congratulated on a Budget that is both prudent and eminently sensible. I appreciatecongratulated on a Budget that is both prudent and eminently sensible. I appreciatecongratulated on a Budget that is both prudent and eminently sensible. I appreciatecongratulated on a Budget that is both prudent and eminently sensible. I appreciate

the pains he has taken in attempting to make the Budget presentation simple andthe pains he has taken in attempting to make the Budget presentation simple andthe pains he has taken in attempting to make the Budget presentation simple andthe pains he has taken in attempting to make the Budget presentation simple and

comprehensible while also allowing us to study the proposed expenditure in detail.comprehensible while also allowing us to study the proposed expenditure in detail.comprehensible while also allowing us to study the proposed expenditure in detail.comprehensible while also allowing us to study the proposed expenditure in detail.

Unfortunately for him, this approach also rendered it much easier for all and sundryUnfortunately for him, this approach also rendered it much easier for all and sundryUnfortunately for him, this approach also rendered it much easier for all and sundryUnfortunately for him, this approach also rendered it much easier for all and sundry

to pick holes in his Budget and to criticize it. These few weeks must be veryto pick holes in his Budget and to criticize it. These few weeks must be veryto pick holes in his Budget and to criticize it. These few weeks must be veryto pick holes in his Budget and to criticize it. These few weeks must be very

difficult ones for him and his team. My department is in fact both willing and abledifficult ones for him and his team. My department is in fact both willing and abledifficult ones for him and his team. My department is in fact both willing and abledifficult ones for him and his team. My department is in fact both willing and able

to extend our services should there be any need.to extend our services should there be any need.to extend our services should there be any need.to extend our services should there be any need.

The Financial Secretary went to great length to explain how he would deal withThe Financial Secretary went to great length to explain how he would deal withThe Financial Secretary went to great length to explain how he would deal withThe Financial Secretary went to great length to explain how he would deal with

inflation. Despite this, most people doubt whether inflation would be kept to ainflation. Despite this, most people doubt whether inflation would be kept to ainflation. Despite this, most people doubt whether inflation would be kept to ainflation. Despite this, most people doubt whether inflation would be kept to a

single digit. It is therefore crucial that he should keep this very serious problemsingle digit. It is therefore crucial that he should keep this very serious problemsingle digit. It is therefore crucial that he should keep this very serious problemsingle digit. It is therefore crucial that he should keep this very serious problem

in mind when looking at increases in fees and charges as well as the pay rise forin mind when looking at increases in fees and charges as well as the pay rise forin mind when looking at increases in fees and charges as well as the pay rise forin mind when looking at increases in fees and charges as well as the pay rise for

the Civil Service later this year. The business community is generally bullish aboutthe Civil Service later this year. The business community is generally bullish aboutthe Civil Service later this year. The business community is generally bullish aboutthe Civil Service later this year. The business community is generally bullish about

economic growth in Hong Kong but the Financial Secretary must take heed of theeconomic growth in Hong Kong but the Financial Secretary must take heed of theeconomic growth in Hong Kong but the Financial Secretary must take heed of theeconomic growth in Hong Kong but the Financial Secretary must take heed of the

Honourable Vincent CHENG's warning about the tight labour situation and how it canHonourable Vincent CHENG's warning about the tight labour situation and how it canHonourable Vincent CHENG's warning about the tight labour situation and how it canHonourable Vincent CHENG's warning about the tight labour situation and how it can

constrain growth. The Budget surplus of $14 billion came as a pleasant surprise.constrain growth. The Budget surplus of $14 billion came as a pleasant surprise.constrain growth. The Budget surplus of $14 billion came as a pleasant surprise.constrain growth. The Budget surplus of $14 billion came as a pleasant surprise.

However if we discount $5.6 billion due to underspending resulting from the slippageHowever if we discount $5.6 billion due to underspending resulting from the slippageHowever if we discount $5.6 billion due to underspending resulting from the slippageHowever if we discount $5.6 billion due to underspending resulting from the slippage

in the airport core programme, the surplus becomes less impressive. However, whenin the airport core programme, the surplus becomes less impressive. However, whenin the airport core programme, the surplus becomes less impressive. However, whenin the airport core programme, the surplus becomes less impressive. However, when

we look at the other surplus which is the $4.7 billion due to buoyant revenues, thiswe look at the other surplus which is the $4.7 billion due to buoyant revenues, thiswe look at the other surplus which is the $4.7 billion due to buoyant revenues, thiswe look at the other surplus which is the $4.7 billion due to buoyant revenues, this

was largely due to the increased confidence in Hong Kong after the signing of thewas largely due to the increased confidence in Hong Kong after the signing of thewas largely due to the increased confidence in Hong Kong after the signing of thewas largely due to the increased confidence in Hong Kong after the signing of the

Memorandum which sent the Hang Seng Index soaring and increased revenues from landMemorandum which sent the Hang Seng Index soaring and increased revenues from landMemorandum which sent the Hang Seng Index soaring and increased revenues from landMemorandum which sent the Hang Seng Index soaring and increased revenues from land

sales. This demonstrates the importance of the airport and port projects not onlysales. This demonstrates the importance of the airport and port projects not onlysales. This demonstrates the importance of the airport and port projects not onlysales. This demonstrates the importance of the airport and port projects not only

as a confidence booster but also as an enormous investment for our future. Thereas a confidence booster but also as an enormous investment for our future. Thereas a confidence booster but also as an enormous investment for our future. Thereas a confidence booster but also as an enormous investment for our future. There

is life and there has to be life after 1997. The new airport and its relatedis life and there has to be life after 1997. The new airport and its relatedis life and there has to be life after 1997. The new airport and its relatedis life and there has to be life after 1997. The new airport and its related

developments will undoubtedly contribute to the improvement of that life. However,developments will undoubtedly contribute to the improvement of that life. However,developments will undoubtedly contribute to the improvement of that life. However,developments will undoubtedly contribute to the improvement of that life. However,

this must not distract us from assuring that it will not have serious cost overruns.this must not distract us from assuring that it will not have serious cost overruns.this must not distract us from assuring that it will not have serious cost overruns.this must not distract us from assuring that it will not have serious cost overruns.

On the expenditure side, it is worrying to see a continued growth in governmentOn the expenditure side, it is worrying to see a continued growth in governmentOn the expenditure side, it is worrying to see a continued growth in governmentOn the expenditure side, it is worrying to see a continued growth in government

spending at a share of the GDP from 15% in 1987-88 to 18.3% in 1992-93. Let us forspending at a share of the GDP from 15% in 1987-88 to 18.3% in 1992-93. Let us forspending at a share of the GDP from 15% in 1987-88 to 18.3% in 1992-93. Let us forspending at a share of the GDP from 15% in 1987-88 to 18.3% in 1992-93. Let us for

a moment take note of what happens in the OECD nations where between the mid-1960sa moment take note of what happens in the OECD nations where between the mid-1960sa moment take note of what happens in the OECD nations where between the mid-1960sa moment take note of what happens in the OECD nations where between the mid-1960s

and the early 1980s, total government spending relative to the economy as a wholeand the early 1980s, total government spending relative to the economy as a wholeand the early 1980s, total government spending relative to the economy as a wholeand the early 1980s, total government spending relative to the economy as a whole

increased by 50% while the economy experienced a reduction of 60% in the average growthincreased by 50% while the economy experienced a reduction of 60% in the average growthincreased by 50% while the economy experienced a reduction of 60% in the average growthincreased by 50% while the economy experienced a reduction of 60% in the average growth

rate. This serves to demonstrate that increased public expenditure can adverselyrate. This serves to demonstrate that increased public expenditure can adverselyrate. This serves to demonstrate that increased public expenditure can adverselyrate. This serves to demonstrate that increased public expenditure can adversely

affect capital formation, growth, and the job creation process. It is thereforeaffect capital formation, growth, and the job creation process. It is thereforeaffect capital formation, growth, and the job creation process. It is thereforeaffect capital formation, growth, and the job creation process. It is therefore

prudent for the Government to keep a tight control over expenditure. For those whoprudent for the Government to keep a tight control over expenditure. For those whoprudent for the Government to keep a tight control over expenditure. For those whoprudent for the Government to keep a tight control over expenditure. For those who

are clamouring for more welfare spending, it may be useful to look at the Northare clamouring for more welfare spending, it may be useful to look at the Northare clamouring for more welfare spending, it may be useful to look at the Northare clamouring for more welfare spending, it may be useful to look at the North

American experience. Federal spending on welfare increased from 8.2% to 18.7% ofAmerican experience. Federal spending on welfare increased from 8.2% to 18.7% ofAmerican experience. Federal spending on welfare increased from 8.2% to 18.7% ofAmerican experience. Federal spending on welfare increased from 8.2% to 18.7% of

the GNP between 1950 and 1980. Yet the protection provided by the American welfarethe GNP between 1950 and 1980. Yet the protection provided by the American welfarethe GNP between 1950 and 1980. Yet the protection provided by the American welfarethe GNP between 1950 and 1980. Yet the protection provided by the American welfare

state against degradation and insecurity is only partial and often even counter-state against degradation and insecurity is only partial and often even counter-state against degradation and insecurity is only partial and often even counter-state against degradation and insecurity is only partial and often even counter-

productive. Instead of securing the poor more effectively against misfortune,productive. Instead of securing the poor more effectively against misfortune,productive. Instead of securing the poor more effectively against misfortune,productive. Instead of securing the poor more effectively against misfortune,

increased welfare benefits have subsidized personal and social responsibility. Toincreased welfare benefits have subsidized personal and social responsibility. Toincreased welfare benefits have subsidized personal and social responsibility. Toincreased welfare benefits have subsidized personal and social responsibility. To

avoid going down the slippery road, welfare spending must be more focused by providingavoid going down the slippery road, welfare spending must be more focused by providingavoid going down the slippery road, welfare spending must be more focused by providingavoid going down the slippery road, welfare spending must be more focused by providing

for those who are not able to help themselves, by improving productivity from ourfor those who are not able to help themselves, by improving productivity from ourfor those who are not able to help themselves, by improving productivity from ourfor those who are not able to help themselves, by improving productivity from our

staff, by minimizing areas of overlaps and by encouraging the community not only tostaff, by minimizing areas of overlaps and by encouraging the community not only tostaff, by minimizing areas of overlaps and by encouraging the community not only tostaff, by minimizing areas of overlaps and by encouraging the community not only to

look after themselves but also others. The best way, in fact, to help the poor islook after themselves but also others. The best way, in fact, to help the poor islook after themselves but also others. The best way, in fact, to help the poor islook after themselves but also others. The best way, in fact, to help the poor is

to provide them with the opportunities to improve themselves through the acquisitionto provide them with the opportunities to improve themselves through the acquisitionto provide them with the opportunities to improve themselves through the acquisitionto provide them with the opportunities to improve themselves through the acquisition

of marketable skills and for the children to have better educational opportunities.of marketable skills and for the children to have better educational opportunities.of marketable skills and for the children to have better educational opportunities.of marketable skills and for the children to have better educational opportunities.

It is in fact gratifying to see that close to 70% of students in the tertiaryIt is in fact gratifying to see that close to 70% of students in the tertiaryIt is in fact gratifying to see that close to 70% of students in the tertiaryIt is in fact gratifying to see that close to 70% of students in the tertiary

institutions are from the lower social class. The Government can certainly do moreinstitutions are from the lower social class. The Government can certainly do moreinstitutions are from the lower social class. The Government can certainly do moreinstitutions are from the lower social class. The Government can certainly do more

for education for that is the only passport to upward mobility. However, jobs mustfor education for that is the only passport to upward mobility. However, jobs mustfor education for that is the only passport to upward mobility. However, jobs mustfor education for that is the only passport to upward mobility. However, jobs must

be available for those who have been trained or educated.be available for those who have been trained or educated.be available for those who have been trained or educated.be available for those who have been trained or educated.

This can onlyThis can onlyThis can onlyThis can only be achieved by continual expansion of our economy. Yesterday, the be achieved by continual expansion of our economy. Yesterday, the be achieved by continual expansion of our economy. Yesterday, the be achieved by continual expansion of our economy. Yesterday, the

Honourable Allen LEE and the Honourable NGAI Siu-kit spoke on the direction to beHonourable Allen LEE and the Honourable NGAI Siu-kit spoke on the direction to beHonourable Allen LEE and the Honourable NGAI Siu-kit spoke on the direction to beHonourable Allen LEE and the Honourable NGAI Siu-kit spoke on the direction to be

taken for further growth. Today I shall leave this topic to the Honourable Henrytaken for further growth. Today I shall leave this topic to the Honourable Henrytaken for further growth. Today I shall leave this topic to the Honourable Henrytaken for further growth. Today I shall leave this topic to the Honourable Henry

TANG and the Honourable Steven POON. As to matters relating to public security, thereTANG and the Honourable Steven POON. As to matters relating to public security, thereTANG and the Honourable Steven POON. As to matters relating to public security, thereTANG and the Honourable Steven POON. As to matters relating to public security, there

is generally support and sympathy for increased funding but these should, by no means,is generally support and sympathy for increased funding but these should, by no means,is generally support and sympathy for increased funding but these should, by no means,is generally support and sympathy for increased funding but these should, by no means,

be construed as a blank cheque. In seeking additional funding, the Commissioner ofbe construed as a blank cheque. In seeking additional funding, the Commissioner ofbe construed as a blank cheque. In seeking additional funding, the Commissioner ofbe construed as a blank cheque. In seeking additional funding, the Commissioner of

Police and the Secretary for Security will have to put up good reasons for doing so.Police and the Secretary for Security will have to put up good reasons for doing so.Police and the Secretary for Security will have to put up good reasons for doing so.Police and the Secretary for Security will have to put up good reasons for doing so.

There are half of the problems that cannot be solved by throwing money at them. ThereThere are half of the problems that cannot be solved by throwing money at them. ThereThere are half of the problems that cannot be solved by throwing money at them. ThereThere are half of the problems that cannot be solved by throwing money at them. There

are leadership and management problems that need to be addressed.are leadership and management problems that need to be addressed.are leadership and management problems that need to be addressed.are leadership and management problems that need to be addressed.

I would like to see an early start forI would like to see an early start forI would like to see an early start forI would like to see an early start for the inter-departmental study involving the inter-departmental study involving the inter-departmental study involving the inter-departmental study involving

the police, the Security Branch, the Civil Service and the Finance Branch.the police, the Security Branch, the Civil Service and the Finance Branch.the police, the Security Branch, the Civil Service and the Finance Branch.the police, the Security Branch, the Civil Service and the Finance Branch.

Furthermore, the police should take steps to focus their priorities and to improveFurthermore, the police should take steps to focus their priorities and to improveFurthermore, the police should take steps to focus their priorities and to improveFurthermore, the police should take steps to focus their priorities and to improve

their efficiency. The recent improvements in apprehending armed robbers andtheir efficiency. The recent improvements in apprehending armed robbers andtheir efficiency. The recent improvements in apprehending armed robbers andtheir efficiency. The recent improvements in apprehending armed robbers and

smugglers are, in fact, well appreciated and this is in the absence of additionalsmugglers are, in fact, well appreciated and this is in the absence of additionalsmugglers are, in fact, well appreciated and this is in the absence of additionalsmugglers are, in fact, well appreciated and this is in the absence of additional

funding.funding.funding.funding.

The Civil Service has become too large. Yesterday both the Honourable Mrs SelinaThe Civil Service has become too large. Yesterday both the Honourable Mrs SelinaThe Civil Service has become too large. Yesterday both the Honourable Mrs SelinaThe Civil Service has become too large. Yesterday both the Honourable Mrs Selina

CHOW and the Honourable Mrs Miriam LAU, and today the Honourable Ronald ARCULLI,CHOW and the Honourable Mrs Miriam LAU, and today the Honourable Ronald ARCULLI,CHOW and the Honourable Mrs Miriam LAU, and today the Honourable Ronald ARCULLI,CHOW and the Honourable Mrs Miriam LAU, and today the Honourable Ronald ARCULLI,

proposed ways to increase efficiency and to work towards a slimmer and leaner civilproposed ways to increase efficiency and to work towards a slimmer and leaner civilproposed ways to increase efficiency and to work towards a slimmer and leaner civilproposed ways to increase efficiency and to work towards a slimmer and leaner civil

service. Suffice it for me to say that it has become conventional wisdom to preferservice. Suffice it for me to say that it has become conventional wisdom to preferservice. Suffice it for me to say that it has become conventional wisdom to preferservice. Suffice it for me to say that it has become conventional wisdom to prefer

an imperfect market than an imperfect and large government.an imperfect market than an imperfect and large government.an imperfect market than an imperfect and large government.an imperfect market than an imperfect and large government.

TurninTurninTurninTurning now to revenue matters, I frankly do not see the rationale for liftingg now to revenue matters, I frankly do not see the rationale for liftingg now to revenue matters, I frankly do not see the rationale for liftingg now to revenue matters, I frankly do not see the rationale for lifting

the duty on soft drinks and the entertainment tax. This move has no significantthe duty on soft drinks and the entertainment tax. This move has no significantthe duty on soft drinks and the entertainment tax. This move has no significantthe duty on soft drinks and the entertainment tax. This move has no significant

effect on inflation and just serves to narrow the tax base. If I may be so bold aseffect on inflation and just serves to narrow the tax base. If I may be so bold aseffect on inflation and just serves to narrow the tax base. If I may be so bold aseffect on inflation and just serves to narrow the tax base. If I may be so bold as

to suggest -- and I know it is not possible in the Financial Secretary's way of settingto suggest -- and I know it is not possible in the Financial Secretary's way of settingto suggest -- and I know it is not possible in the Financial Secretary's way of settingto suggest -- and I know it is not possible in the Financial Secretary's way of setting

up the Budget and expenditure -- in fact it will be better to keep these sources ofup the Budget and expenditure -- in fact it will be better to keep these sources ofup the Budget and expenditure -- in fact it will be better to keep these sources ofup the Budget and expenditure -- in fact it will be better to keep these sources of

revenue in order to improve provisions for primary and secondary education.revenue in order to improve provisions for primary and secondary education.revenue in order to improve provisions for primary and secondary education.revenue in order to improve provisions for primary and secondary education.

As to the expenditure foAs to the expenditure foAs to the expenditure foAs to the expenditure for health, emphasis should be on health education. Inr health, emphasis should be on health education. Inr health, emphasis should be on health education. Inr health, emphasis should be on health education. In

North America, education programmes on healthy lifestyles have already made an impactNorth America, education programmes on healthy lifestyles have already made an impactNorth America, education programmes on healthy lifestyles have already made an impactNorth America, education programmes on healthy lifestyles have already made an impact

in reducing heart diseases. A large sum of money was used to fund the Hospitalin reducing heart diseases. A large sum of money was used to fund the Hospitalin reducing heart diseases. A large sum of money was used to fund the Hospitalin reducing heart diseases. A large sum of money was used to fund the Hospital

Authority, and I would like to see that we do get a better and more efficient serviceAuthority, and I would like to see that we do get a better and more efficient serviceAuthority, and I would like to see that we do get a better and more efficient serviceAuthority, and I would like to see that we do get a better and more efficient service

before more money is poured in. In his whole Budget, the Financial Secretary hasbefore more money is poured in. In his whole Budget, the Financial Secretary hasbefore more money is poured in. In his whole Budget, the Financial Secretary hasbefore more money is poured in. In his whole Budget, the Financial Secretary has

not only been unable to provide for the "sandwich class", but in fact has increasednot only been unable to provide for the "sandwich class", but in fact has increasednot only been unable to provide for the "sandwich class", but in fact has increasednot only been unable to provide for the "sandwich class", but in fact has increased

their burden through the increase in rates, and later in the year they will also betheir burden through the increase in rates, and later in the year they will also betheir burden through the increase in rates, and later in the year they will also betheir burden through the increase in rates, and later in the year they will also be

hit by the increasing fees and charges.hit by the increasing fees and charges.hit by the increasing fees and charges.hit by the increasing fees and charges.

I would like to speak for the colleagues with whom I work, and they include theI would like to speak for the colleagues with whom I work, and they include theI would like to speak for the colleagues with whom I work, and they include theI would like to speak for the colleagues with whom I work, and they include the

nurses, the teachers, the technicians, social workers, the occupational therapistsnurses, the teachers, the technicians, social workers, the occupational therapistsnurses, the teachers, the technicians, social workers, the occupational therapistsnurses, the teachers, the technicians, social workers, the occupational therapists

and the physiotherapists. These people have the choice of leaving Hong Kong toand the physiotherapists. These people have the choice of leaving Hong Kong toand the physiotherapists. These people have the choice of leaving Hong Kong toand the physiotherapists. These people have the choice of leaving Hong Kong to

countries where their skills are welcome, but they have chosen to stay. It is,countries where their skills are welcome, but they have chosen to stay. It is,countries where their skills are welcome, but they have chosen to stay. It is,countries where their skills are welcome, but they have chosen to stay. It is,

therefore, time that we should seriously consider their needs.therefore, time that we should seriously consider their needs.therefore, time that we should seriously consider their needs.therefore, time that we should seriously consider their needs.

With these remarks, I support the motiWith these remarks, I support the motiWith these remarks, I support the motiWith these remarks, I support the motion.on.on.on.

MR ALBERT CHAN (in Cantonese): Mr Deputy President, the Financial Secretary's BudgetMR ALBERT CHAN (in Cantonese): Mr Deputy President, the Financial Secretary's BudgetMR ALBERT CHAN (in Cantonese): Mr Deputy President, the Financial Secretary's BudgetMR ALBERT CHAN (in Cantonese): Mr Deputy President, the Financial Secretary's Budget

for 1992-93 has been presented to a Legislative Council with Members who have beenfor 1992-93 has been presented to a Legislative Council with Members who have beenfor 1992-93 has been presented to a Legislative Council with Members who have beenfor 1992-93 has been presented to a Legislative Council with Members who have been

returned from direct elections for the first time in its history. It is apparentreturned from direct elections for the first time in its history. It is apparentreturned from direct elections for the first time in its history. It is apparentreturned from direct elections for the first time in its history. It is apparent

that, as the Financial Secretary was putting together his budgetary plans for thethat, as the Financial Secretary was putting together his budgetary plans for thethat, as the Financial Secretary was putting together his budgetary plans for thethat, as the Financial Secretary was putting together his budgetary plans for the

next financial year, he had given thoughts to the demands of certain politicalnext financial year, he had given thoughts to the demands of certain politicalnext financial year, he had given thoughts to the demands of certain politicalnext financial year, he had given thoughts to the demands of certain political

organizations. But in terms of the distribution of resources, I have a personalorganizations. But in terms of the distribution of resources, I have a personalorganizations. But in terms of the distribution of resources, I have a personalorganizations. But in terms of the distribution of resources, I have a personal

feeling that no departure has been made from the spirit of the traditional colonialfeeling that no departure has been made from the spirit of the traditional colonialfeeling that no departure has been made from the spirit of the traditional colonialfeeling that no departure has been made from the spirit of the traditional colonial

fiscal policy, with its emphasis on cost-effectiveness. The present practice is tofiscal policy, with its emphasis on cost-effectiveness. The present practice is tofiscal policy, with its emphasis on cost-effectiveness. The present practice is tofiscal policy, with its emphasis on cost-effectiveness. The present practice is to

control the growth of the public sector. It is unfortunate that not enoughcontrol the growth of the public sector. It is unfortunate that not enoughcontrol the growth of the public sector. It is unfortunate that not enoughcontrol the growth of the public sector. It is unfortunate that not enough

consideration has been given to the impact of economic policy on people's livelihoodconsideration has been given to the impact of economic policy on people's livelihoodconsideration has been given to the impact of economic policy on people's livelihoodconsideration has been given to the impact of economic policy on people's livelihood

and on the different social strata. Meanwhile, the Budget this year has been oneand on the different social strata. Meanwhile, the Budget this year has been oneand on the different social strata. Meanwhile, the Budget this year has been oneand on the different social strata. Meanwhile, the Budget this year has been one

which is overshadowed by a mammoth infrastructural development project. Althoughwhich is overshadowed by a mammoth infrastructural development project. Althoughwhich is overshadowed by a mammoth infrastructural development project. Althoughwhich is overshadowed by a mammoth infrastructural development project. Although

the Financial Secretary has not highlighted this factor of infrasturcturalthe Financial Secretary has not highlighted this factor of infrasturcturalthe Financial Secretary has not highlighted this factor of infrasturcturalthe Financial Secretary has not highlighted this factor of infrasturctural

development, it is very clear that the Government is bound by many fiscal constraintsdevelopment, it is very clear that the Government is bound by many fiscal constraintsdevelopment, it is very clear that the Government is bound by many fiscal constraintsdevelopment, it is very clear that the Government is bound by many fiscal constraints

in the the face of the airport project. The conclusion that resources have to bein the the face of the airport project. The conclusion that resources have to bein the the face of the airport project. The conclusion that resources have to bein the the face of the airport project. The conclusion that resources have to be

saved for future infrastructural development and enlargement of the reserve issaved for future infrastructural development and enlargement of the reserve issaved for future infrastructural development and enlargement of the reserve issaved for future infrastructural development and enlargement of the reserve is

incontestable to the extent that, despite our windfall surplus of $14.1 billion, weincontestable to the extent that, despite our windfall surplus of $14.1 billion, weincontestable to the extent that, despite our windfall surplus of $14.1 billion, weincontestable to the extent that, despite our windfall surplus of $14.1 billion, we

are still forced to increase taxation and put the squeeze on recurrent funding ofare still forced to increase taxation and put the squeeze on recurrent funding ofare still forced to increase taxation and put the squeeze on recurrent funding ofare still forced to increase taxation and put the squeeze on recurrent funding of

the public sector. Today, I will concentrate on the issue of infrastructuralthe public sector. Today, I will concentrate on the issue of infrastructuralthe public sector. Today, I will concentrate on the issue of infrastructuralthe public sector. Today, I will concentrate on the issue of infrastructural

development and equitable distribution of resources. Infrastructural developmentdevelopment and equitable distribution of resources. Infrastructural developmentdevelopment and equitable distribution of resources. Infrastructural developmentdevelopment and equitable distribution of resources. Infrastructural development

has significant implication for the future social and economic development of Honghas significant implication for the future social and economic development of Honghas significant implication for the future social and economic development of Honghas significant implication for the future social and economic development of Hong

Kong. But the issue has so far been discussed only from the perspectives of politicalKong. But the issue has so far been discussed only from the perspectives of politicalKong. But the issue has so far been discussed only from the perspectives of politicalKong. But the issue has so far been discussed only from the perspectives of political

viability and cost effectiveness. Every government project will bring with it bothviability and cost effectiveness. Every government project will bring with it bothviability and cost effectiveness. Every government project will bring with it bothviability and cost effectiveness. Every government project will bring with it both

benefit and loss to different sectors of society, let alone the Airport Core Programmebenefit and loss to different sectors of society, let alone the Airport Core Programmebenefit and loss to different sectors of society, let alone the Airport Core Programmebenefit and loss to different sectors of society, let alone the Airport Core Programme

(ACP) costing $98.6 billion at 1991 prices. It is up to the Government to intervene(ACP) costing $98.6 billion at 1991 prices. It is up to the Government to intervene(ACP) costing $98.6 billion at 1991 prices. It is up to the Government to intervene(ACP) costing $98.6 billion at 1991 prices. It is up to the Government to intervene

appropriately in the financial arrangement, when and where necessary, to make sureappropriately in the financial arrangement, when and where necessary, to make sureappropriately in the financial arrangement, when and where necessary, to make sureappropriately in the financial arrangement, when and where necessary, to make sure

no one sector of society will benefit or lose out excessively in the process. Ofno one sector of society will benefit or lose out excessively in the process. Ofno one sector of society will benefit or lose out excessively in the process. Ofno one sector of society will benefit or lose out excessively in the process. Of

course, the best arrangement will be for everyone to benefit, but this is not possiblecourse, the best arrangement will be for everyone to benefit, but this is not possiblecourse, the best arrangement will be for everyone to benefit, but this is not possiblecourse, the best arrangement will be for everyone to benefit, but this is not possible

realistically. The Financial Secretary should not in drawing up his Budget haverealistically. The Financial Secretary should not in drawing up his Budget haverealistically. The Financial Secretary should not in drawing up his Budget haverealistically. The Financial Secretary should not in drawing up his Budget have

treated the distribution of resources as an exercise in adjusting the various accountstreated the distribution of resources as an exercise in adjusting the various accountstreated the distribution of resources as an exercise in adjusting the various accountstreated the distribution of resources as an exercise in adjusting the various accounts

of public expenditure. Social benefits and social costs must be shared equitably.of public expenditure. Social benefits and social costs must be shared equitably.of public expenditure. Social benefits and social costs must be shared equitably.of public expenditure. Social benefits and social costs must be shared equitably.

Although the Government has often commissioned consultancies on the study of costAlthough the Government has often commissioned consultancies on the study of costAlthough the Government has often commissioned consultancies on the study of costAlthough the Government has often commissioned consultancies on the study of cost

effectiveness, the equitable distribution of resources cannot be engineered byeffectiveness, the equitable distribution of resources cannot be engineered byeffectiveness, the equitable distribution of resources cannot be engineered byeffectiveness, the equitable distribution of resources cannot be engineered by

experts. It is something to be resolved through political deliberation andexperts. It is something to be resolved through political deliberation andexperts. It is something to be resolved through political deliberation andexperts. It is something to be resolved through political deliberation and

consultation. The irony is that the better part of the spending involved in theconsultation. The irony is that the better part of the spending involved in theconsultation. The irony is that the better part of the spending involved in theconsultation. The irony is that the better part of the spending involved in the

commission of the experts and consultants has translated into benefits for thecommission of the experts and consultants has translated into benefits for thecommission of the experts and consultants has translated into benefits for thecommission of the experts and consultants has translated into benefits for the

consortia and companies from overseas.consortia and companies from overseas.consortia and companies from overseas.consortia and companies from overseas.

1111 An analysis may be made as follows of the gainers and losers iAn analysis may be made as follows of the gainers and losers iAn analysis may be made as follows of the gainers and losers iAn analysis may be made as follows of the gainers and losers in the distributionn the distributionn the distributionn the distribution

of resources for building of the physical infrastructureof resources for building of the physical infrastructureof resources for building of the physical infrastructureof resources for building of the physical infrastructure

1.11.11.11.1 Benefits to the multinationals, developers and the building sectorBenefits to the multinationals, developers and the building sectorBenefits to the multinationals, developers and the building sectorBenefits to the multinationals, developers and the building sector

The largest gainers of the airport project are the participating overseasThe largest gainers of the airport project are the participating overseasThe largest gainers of the airport project are the participating overseasThe largest gainers of the airport project are the participating overseas

contractors, financiers, developers, the financial sector and the variouscontractors, financiers, developers, the financial sector and the variouscontractors, financiers, developers, the financial sector and the variouscontractors, financiers, developers, the financial sector and the various

consultancy firms. The $500 million new airport transit centre contract has beenconsultancy firms. The $500 million new airport transit centre contract has beenconsultancy firms. The $500 million new airport transit centre contract has beenconsultancy firms. The $500 million new airport transit centre contract has been

awarded to a British-led financial group. Indeed, the winner of the invitation forawarded to a British-led financial group. Indeed, the winner of the invitation forawarded to a British-led financial group. Indeed, the winner of the invitation forawarded to a British-led financial group. Indeed, the winner of the invitation for

tenders for the Tsing Ma Bridge project is going to be an overseas group. ACP items,tenders for the Tsing Ma Bridge project is going to be an overseas group. ACP items,tenders for the Tsing Ma Bridge project is going to be an overseas group. ACP items,tenders for the Tsing Ma Bridge project is going to be an overseas group. ACP items,

including related consultancy services, will become the monopoly of overseas groupsincluding related consultancy services, will become the monopoly of overseas groupsincluding related consultancy services, will become the monopoly of overseas groupsincluding related consultancy services, will become the monopoly of overseas groups

due to the high level of scientific and technological know-how involved. It is alsodue to the high level of scientific and technological know-how involved. It is alsodue to the high level of scientific and technological know-how involved. It is alsodue to the high level of scientific and technological know-how involved. It is also

estimated that the developers will, as a result of the airport project, also benefitestimated that the developers will, as a result of the airport project, also benefitestimated that the developers will, as a result of the airport project, also benefitestimated that the developers will, as a result of the airport project, also benefit

a great deal from the redevelopment of West Kowloon and the development of Lantaua great deal from the redevelopment of West Kowloon and the development of Lantaua great deal from the redevelopment of West Kowloon and the development of Lantaua great deal from the redevelopment of West Kowloon and the development of Lantau

Island. Suppliers of building and construction materials will also be able to makeIsland. Suppliers of building and construction materials will also be able to makeIsland. Suppliers of building and construction materials will also be able to makeIsland. Suppliers of building and construction materials will also be able to make

considerable profits from the infrastructural engineering contracts.considerable profits from the infrastructural engineering contracts.considerable profits from the infrastructural engineering contracts.considerable profits from the infrastructural engineering contracts.

1.21.21.21.2 Critique of the squeeze on the public sector expenditure and social servicesCritique of the squeeze on the public sector expenditure and social servicesCritique of the squeeze on the public sector expenditure and social servicesCritique of the squeeze on the public sector expenditure and social services

Public expenditure will definitely increase substantially with the inception ofPublic expenditure will definitely increase substantially with the inception ofPublic expenditure will definitely increase substantially with the inception ofPublic expenditure will definitely increase substantially with the inception of

the infrastructural works. Government reserve for the capital reserve fund this yearthe infrastructural works. Government reserve for the capital reserve fund this yearthe infrastructural works. Government reserve for the capital reserve fund this yearthe infrastructural works. Government reserve for the capital reserve fund this year

has seen an over 40% growth over last year. By comparison, growth of individualhas seen an over 40% growth over last year. By comparison, growth of individualhas seen an over 40% growth over last year. By comparison, growth of individualhas seen an over 40% growth over last year. By comparison, growth of individual

departments has been controlled within a low 1%, with some departments not benefitingdepartments has been controlled within a low 1%, with some departments not benefitingdepartments has been controlled within a low 1%, with some departments not benefitingdepartments has been controlled within a low 1%, with some departments not benefiting

from any growth at all. Meanwhile, there has been further cutback to the fundingfrom any growth at all. Meanwhile, there has been further cutback to the fundingfrom any growth at all. Meanwhile, there has been further cutback to the fundingfrom any growth at all. Meanwhile, there has been further cutback to the funding

for government departments, going from 1% in 1992-93 to 2.7% in 1993-94, and furtherfor government departments, going from 1% in 1992-93 to 2.7% in 1993-94, and furtherfor government departments, going from 1% in 1992-93 to 2.7% in 1993-94, and furtherfor government departments, going from 1% in 1992-93 to 2.7% in 1993-94, and further

to 2.6% in 1994-95. Recurrent funding on social welfare, education, medical andto 2.6% in 1994-95. Recurrent funding on social welfare, education, medical andto 2.6% in 1994-95. Recurrent funding on social welfare, education, medical andto 2.6% in 1994-95. Recurrent funding on social welfare, education, medical and

health services, which has a great bearing on people's livelihood, has recorded modesthealth services, which has a great bearing on people's livelihood, has recorded modesthealth services, which has a great bearing on people's livelihood, has recorded modesthealth services, which has a great bearing on people's livelihood, has recorded modest

growths only, by 2.8%, 1.6% and 2.7% respectively. Since these services are mainlygrowths only, by 2.8%, 1.6% and 2.7% respectively. Since these services are mainlygrowths only, by 2.8%, 1.6% and 2.7% respectively. Since these services are mainlygrowths only, by 2.8%, 1.6% and 2.7% respectively. Since these services are mainly

for the benefit of the lower middle and sandwich classes, the airport project willfor the benefit of the lower middle and sandwich classes, the airport project willfor the benefit of the lower middle and sandwich classes, the airport project willfor the benefit of the lower middle and sandwich classes, the airport project will

have a negative impact on them.have a negative impact on them.have a negative impact on them.have a negative impact on them.

Spending on the airport project accounts for one quarterSpending on the airport project accounts for one quarterSpending on the airport project accounts for one quarterSpending on the airport project accounts for one quarter of the total public of the total public of the total public of the total public

expenditure, according to the Budget, but that estimation is only a camouflage ofexpenditure, according to the Budget, but that estimation is only a camouflage ofexpenditure, according to the Budget, but that estimation is only a camouflage ofexpenditure, according to the Budget, but that estimation is only a camouflage of

real spending. The Government, apart from financing the airport project from thereal spending. The Government, apart from financing the airport project from thereal spending. The Government, apart from financing the airport project from thereal spending. The Government, apart from financing the airport project from the

capital works reserve fund and the capital fund, also pays for the costs of ACP workscapital works reserve fund and the capital fund, also pays for the costs of ACP workscapital works reserve fund and the capital fund, also pays for the costs of ACP workscapital works reserve fund and the capital fund, also pays for the costs of ACP works

and related studies as well as administrative costs by saving on the recurrent fundingand related studies as well as administrative costs by saving on the recurrent fundingand related studies as well as administrative costs by saving on the recurrent fundingand related studies as well as administrative costs by saving on the recurrent funding

for the various departments. Public sector spending has been cut back on the onefor the various departments. Public sector spending has been cut back on the onefor the various departments. Public sector spending has been cut back on the onefor the various departments. Public sector spending has been cut back on the one

hand, and on the other hand resources have to be saved and diverted to infrastructuralhand, and on the other hand resources have to be saved and diverted to infrastructuralhand, and on the other hand resources have to be saved and diverted to infrastructuralhand, and on the other hand resources have to be saved and diverted to infrastructural

building. This will have a definite impact on the operation of some departments.building. This will have a definite impact on the operation of some departments.building. This will have a definite impact on the operation of some departments.building. This will have a definite impact on the operation of some departments.

Insofar as the Civil Engineering Department is concerned, 90 new posts will be createdInsofar as the Civil Engineering Department is concerned, 90 new posts will be createdInsofar as the Civil Engineering Department is concerned, 90 new posts will be createdInsofar as the Civil Engineering Department is concerned, 90 new posts will be created

for 1992-93 for the ACP. Projects which are not related to the ACP, such as a massivefor 1992-93 for the ACP. Projects which are not related to the ACP, such as a massivefor 1992-93 for the ACP. Projects which are not related to the ACP, such as a massivefor 1992-93 for the ACP. Projects which are not related to the ACP, such as a massive

sewage treatment plant and some community facilities, have not been able to receivesewage treatment plant and some community facilities, have not been able to receivesewage treatment plant and some community facilities, have not been able to receivesewage treatment plant and some community facilities, have not been able to receive

extra government funding.extra government funding.extra government funding.extra government funding.

The Government has this year, at the initial stage of the airport project, feltThe Government has this year, at the initial stage of the airport project, feltThe Government has this year, at the initial stage of the airport project, feltThe Government has this year, at the initial stage of the airport project, felt

the need to cut back on the various investment items involving people's livelihoodthe need to cut back on the various investment items involving people's livelihoodthe need to cut back on the various investment items involving people's livelihoodthe need to cut back on the various investment items involving people's livelihood

and social investment. I cannot bear to imagine the measures to which the Governmentand social investment. I cannot bear to imagine the measures to which the Governmentand social investment. I cannot bear to imagine the measures to which the Governmentand social investment. I cannot bear to imagine the measures to which the Government

would resort to further reduce spending on social services when the airport projectwould resort to further reduce spending on social services when the airport projectwould resort to further reduce spending on social services when the airport projectwould resort to further reduce spending on social services when the airport project

is in full swing, particularly between the years 1994 and 1996.is in full swing, particularly between the years 1994 and 1996.is in full swing, particularly between the years 1994 and 1996.is in full swing, particularly between the years 1994 and 1996.

1.31.31.31.3 Inflation and foreign labourInflation and foreign labourInflation and foreign labourInflation and foreign labour

The Financial Secretary has put inflation in the next six years at an averageThe Financial Secretary has put inflation in the next six years at an averageThe Financial Secretary has put inflation in the next six years at an averageThe Financial Secretary has put inflation in the next six years at an average

8.5%, but I believe it is an over-optimistic projection. Given the immense scale8.5%, but I believe it is an over-optimistic projection. Given the immense scale8.5%, but I believe it is an over-optimistic projection. Given the immense scale8.5%, but I believe it is an over-optimistic projection. Given the immense scale

of the infrastructural projects, and given the perceived need for these projects whichof the infrastructural projects, and given the perceived need for these projects whichof the infrastructural projects, and given the perceived need for these projects whichof the infrastructural projects, and given the perceived need for these projects which

together cost $98.6 billion to be completed in a short span of time, inflation willtogether cost $98.6 billion to be completed in a short span of time, inflation willtogether cost $98.6 billion to be completed in a short span of time, inflation willtogether cost $98.6 billion to be completed in a short span of time, inflation will

definitely be led by the strong demands for manpower, materials and other resources.definitely be led by the strong demands for manpower, materials and other resources.definitely be led by the strong demands for manpower, materials and other resources.definitely be led by the strong demands for manpower, materials and other resources.

Some economists have projected that inflation would go up to 15% between the yearsSome economists have projected that inflation would go up to 15% between the yearsSome economists have projected that inflation would go up to 15% between the yearsSome economists have projected that inflation would go up to 15% between the years

1994-96 when the airport project gets into full swing. While inflation will have1994-96 when the airport project gets into full swing. While inflation will have1994-96 when the airport project gets into full swing. While inflation will have1994-96 when the airport project gets into full swing. While inflation will have

an impact on people of every social stratum, the lower stratum will have to bear thean impact on people of every social stratum, the lower stratum will have to bear thean impact on people of every social stratum, the lower stratum will have to bear thean impact on people of every social stratum, the lower stratum will have to bear the

brunt of inflation because they have neither political nor market leverage.brunt of inflation because they have neither political nor market leverage.brunt of inflation because they have neither political nor market leverage.brunt of inflation because they have neither political nor market leverage.

Meanwhile, the Government has plans to import no less than 2 000 foreign skilled andMeanwhile, the Government has plans to import no less than 2 000 foreign skilled andMeanwhile, the Government has plans to import no less than 2 000 foreign skilled andMeanwhile, the Government has plans to import no less than 2 000 foreign skilled and

non-skilled workers for the ACP projects. These workers will benefit from theirnon-skilled workers for the ACP projects. These workers will benefit from theirnon-skilled workers for the ACP projects. These workers will benefit from theirnon-skilled workers for the ACP projects. These workers will benefit from their

participation in infrastructural building on the one hand, and help suppress localparticipation in infrastructural building on the one hand, and help suppress localparticipation in infrastructural building on the one hand, and help suppress localparticipation in infrastructural building on the one hand, and help suppress local

wages and retire our middle to old aged workers, who do not have top productivity,wages and retire our middle to old aged workers, who do not have top productivity,wages and retire our middle to old aged workers, who do not have top productivity,wages and retire our middle to old aged workers, who do not have top productivity,

on the other. This scenario is not exactly fair to our middle to old aged workers.on the other. This scenario is not exactly fair to our middle to old aged workers.on the other. This scenario is not exactly fair to our middle to old aged workers.on the other. This scenario is not exactly fair to our middle to old aged workers.

1.41.41.41.4 Intergenerational benefits and the issue of uneven distribution ofIntergenerational benefits and the issue of uneven distribution ofIntergenerational benefits and the issue of uneven distribution ofIntergenerational benefits and the issue of uneven distribution of economic economic economic economic

benefitsbenefitsbenefitsbenefits

Infrastructural development is massive public works undertaken for the long term.Infrastructural development is massive public works undertaken for the long term.Infrastructural development is massive public works undertaken for the long term.Infrastructural development is massive public works undertaken for the long term.

From the perspective of social costs and benefits, there is a long time gap betweenFrom the perspective of social costs and benefits, there is a long time gap betweenFrom the perspective of social costs and benefits, there is a long time gap betweenFrom the perspective of social costs and benefits, there is a long time gap between

investment and dividend. The first runway and other core projects will be completedinvestment and dividend. The first runway and other core projects will be completedinvestment and dividend. The first runway and other core projects will be completedinvestment and dividend. The first runway and other core projects will be completed

in five years' time, but the economic benefits of the new airport will be obtainedin five years' time, but the economic benefits of the new airport will be obtainedin five years' time, but the economic benefits of the new airport will be obtainedin five years' time, but the economic benefits of the new airport will be obtained

after 1997, perhaps a longer time after. The Sino-British Memorandum ofafter 1997, perhaps a longer time after. The Sino-British Memorandum ofafter 1997, perhaps a longer time after. The Sino-British Memorandum ofafter 1997, perhaps a longer time after. The Sino-British Memorandum of

Understanding states that neither side wishes to see infrastructural developmentUnderstanding states that neither side wishes to see infrastructural developmentUnderstanding states that neither side wishes to see infrastructural developmentUnderstanding states that neither side wishes to see infrastructural development

become a financial burden to the SAR Government. However, it is extremely unfairbecome a financial burden to the SAR Government. However, it is extremely unfairbecome a financial burden to the SAR Government. However, it is extremely unfairbecome a financial burden to the SAR Government. However, it is extremely unfair

too for the people of Hong Kong to be made now to bear the entire cost oftoo for the people of Hong Kong to be made now to bear the entire cost oftoo for the people of Hong Kong to be made now to bear the entire cost oftoo for the people of Hong Kong to be made now to bear the entire cost of

infrastructural development. The Government has always made it clear that it hasinfrastructural development. The Government has always made it clear that it hasinfrastructural development. The Government has always made it clear that it hasinfrastructural development. The Government has always made it clear that it has

the ability to build the entire airport project, but I believe it is not so much athe ability to build the entire airport project, but I believe it is not so much athe ability to build the entire airport project, but I believe it is not so much athe ability to build the entire airport project, but I believe it is not so much a

question of ability as one of advisability. The question is whether it is advisablequestion of ability as one of advisability. The question is whether it is advisablequestion of ability as one of advisability. The question is whether it is advisablequestion of ability as one of advisability. The question is whether it is advisable

to wholly finance infrastructural development, with the use of a large portion ofto wholly finance infrastructural development, with the use of a large portion ofto wholly finance infrastructural development, with the use of a large portion ofto wholly finance infrastructural development, with the use of a large portion of

the past savings of Hong Kong people, with tax increases and cutbacks on our resourcesthe past savings of Hong Kong people, with tax increases and cutbacks on our resourcesthe past savings of Hong Kong people, with tax increases and cutbacks on our resourcesthe past savings of Hong Kong people, with tax increases and cutbacks on our resources

for social services. A fairer way is let both our present population and the futurefor social services. A fairer way is let both our present population and the futurefor social services. A fairer way is let both our present population and the futurefor social services. A fairer way is let both our present population and the future

residents of the Hong Kong SAR share the burden over a mutually agreed time span,residents of the Hong Kong SAR share the burden over a mutually agreed time span,residents of the Hong Kong SAR share the burden over a mutually agreed time span,residents of the Hong Kong SAR share the burden over a mutually agreed time span,

instead of getting Hong Kong people to bear the entire burden over the next five toinstead of getting Hong Kong people to bear the entire burden over the next five toinstead of getting Hong Kong people to bear the entire burden over the next five toinstead of getting Hong Kong people to bear the entire burden over the next five to

six years time. Many large projects normally call for the issue of long-term bondssix years time. Many large projects normally call for the issue of long-term bondssix years time. Many large projects normally call for the issue of long-term bondssix years time. Many large projects normally call for the issue of long-term bonds

and external borrowing to pay for their related works. This is a fairer and moreand external borrowing to pay for their related works. This is a fairer and moreand external borrowing to pay for their related works. This is a fairer and moreand external borrowing to pay for their related works. This is a fairer and more

just practice. On the other hand, if the Government wishes the public to pay forjust practice. On the other hand, if the Government wishes the public to pay forjust practice. On the other hand, if the Government wishes the public to pay forjust practice. On the other hand, if the Government wishes the public to pay for

the cost of the infrastructural development, it should at least release relevantthe cost of the infrastructural development, it should at least release relevantthe cost of the infrastructural development, it should at least release relevantthe cost of the infrastructural development, it should at least release relevant

details of economic viability and efficiency assessment of the future airport so thatdetails of economic viability and efficiency assessment of the future airport so thatdetails of economic viability and efficiency assessment of the future airport so thatdetails of economic viability and efficiency assessment of the future airport so that

the public, the Legislative Council in particular, may be in a position to study themthe public, the Legislative Council in particular, may be in a position to study themthe public, the Legislative Council in particular, may be in a position to study themthe public, the Legislative Council in particular, may be in a position to study them

and give comment.and give comment.and give comment.and give comment.

1.51.51.51.5 Prosperity resulting from infrastructural building and harm done to newProsperity resulting from infrastructural building and harm done to newProsperity resulting from infrastructural building and harm done to newProsperity resulting from infrastructural building and harm done to new

Territories SouthTerritories SouthTerritories SouthTerritories South

A Legislative Councillor should of course be concerned with the overall communityA Legislative Councillor should of course be concerned with the overall communityA Legislative Councillor should of course be concerned with the overall communityA Legislative Councillor should of course be concerned with the overall community

interest. Being a directly elected Member representing the New Territories Southinterest. Being a directly elected Member representing the New Territories Southinterest. Being a directly elected Member representing the New Territories Southinterest. Being a directly elected Member representing the New Territories South

Constituency, I cannot however turn a blind eye to the likely impact ofConstituency, I cannot however turn a blind eye to the likely impact ofConstituency, I cannot however turn a blind eye to the likely impact ofConstituency, I cannot however turn a blind eye to the likely impact of

infrastructural development on my constituents. Over half of the 10 ACP projectsinfrastructural development on my constituents. Over half of the 10 ACP projectsinfrastructural development on my constituents. Over half of the 10 ACP projectsinfrastructural development on my constituents. Over half of the 10 ACP projects

are located in New Territories South. As an elected Member from New Territories South,are located in New Territories South. As an elected Member from New Territories South,are located in New Territories South. As an elected Member from New Territories South,are located in New Territories South. As an elected Member from New Territories South,

I should be glad and proud, but in fact I do not feel that way at all. On the contrary,I should be glad and proud, but in fact I do not feel that way at all. On the contrary,I should be glad and proud, but in fact I do not feel that way at all. On the contrary,I should be glad and proud, but in fact I do not feel that way at all. On the contrary,

I worry about the negative impact which the ACP projects will have on my constituency.I worry about the negative impact which the ACP projects will have on my constituency.I worry about the negative impact which the ACP projects will have on my constituency.I worry about the negative impact which the ACP projects will have on my constituency.

First of all, on the envFirst of all, on the envFirst of all, on the envFirst of all, on the environmental side, the ACP will bring considerable damageironmental side, the ACP will bring considerable damageironmental side, the ACP will bring considerable damageironmental side, the ACP will bring considerable damage

to the historic relics of New Territories South; historic relics at Chek Lap Kok andto the historic relics of New Territories South; historic relics at Chek Lap Kok andto the historic relics of New Territories South; historic relics at Chek Lap Kok andto the historic relics of New Territories South; historic relics at Chek Lap Kok and

Ma Wan have made way for the rapid ACP development, and disappear for good. TheMa Wan have made way for the rapid ACP development, and disappear for good. TheMa Wan have made way for the rapid ACP development, and disappear for good. TheMa Wan have made way for the rapid ACP development, and disappear for good. The

building of the Lantau Fixed Crossing will cause great destruction to the ecosystem,building of the Lantau Fixed Crossing will cause great destruction to the ecosystem,building of the Lantau Fixed Crossing will cause great destruction to the ecosystem,building of the Lantau Fixed Crossing will cause great destruction to the ecosystem,

particularly to coastal marine life. These environmental losses cannot beparticularly to coastal marine life. These environmental losses cannot beparticularly to coastal marine life. These environmental losses cannot beparticularly to coastal marine life. These environmental losses cannot be

compensated for by money. Also, the noise and air pollution which will occur alongcompensated for by money. Also, the noise and air pollution which will occur alongcompensated for by money. Also, the noise and air pollution which will occur alongcompensated for by money. Also, the noise and air pollution which will occur along

with development and future use of the airport will also affect residents of Newwith development and future use of the airport will also affect residents of Newwith development and future use of the airport will also affect residents of Newwith development and future use of the airport will also affect residents of New

Territories South.Territories South.Territories South.Territories South.

Secondly, property development resulting from the ACP projects in New TerritoriesSecondly, property development resulting from the ACP projects in New TerritoriesSecondly, property development resulting from the ACP projects in New TerritoriesSecondly, property development resulting from the ACP projects in New Territories

South will cause further escalation of rent and property prices adding to the hardshipSouth will cause further escalation of rent and property prices adding to the hardshipSouth will cause further escalation of rent and property prices adding to the hardshipSouth will cause further escalation of rent and property prices adding to the hardship

of the residents.of the residents.of the residents.of the residents.

Thirdly, thThirdly, thThirdly, thThirdly, there are many problems which remain unsolved in New Territories South.ere are many problems which remain unsolved in New Territories South.ere are many problems which remain unsolved in New Territories South.ere are many problems which remain unsolved in New Territories South.

We have over 20 000 squatters who live under the constant threat of landslides. MostWe have over 20 000 squatters who live under the constant threat of landslides. MostWe have over 20 000 squatters who live under the constant threat of landslides. MostWe have over 20 000 squatters who live under the constant threat of landslides. Most

of the villages in Tai O are still without electricity and metered water supply. Theof the villages in Tai O are still without electricity and metered water supply. Theof the villages in Tai O are still without electricity and metered water supply. Theof the villages in Tai O are still without electricity and metered water supply. The

housing problem of "caged" bedspace lodgers in Tsuen Wan town centre is still unsolved.housing problem of "caged" bedspace lodgers in Tsuen Wan town centre is still unsolved.housing problem of "caged" bedspace lodgers in Tsuen Wan town centre is still unsolved.housing problem of "caged" bedspace lodgers in Tsuen Wan town centre is still unsolved.

All of these problems call for urgent solutions.All of these problems call for urgent solutions.All of these problems call for urgent solutions.All of these problems call for urgent solutions.

I believe that the Government should not devote a disproportionate amount ofI believe that the Government should not devote a disproportionate amount ofI believe that the Government should not devote a disproportionate amount ofI believe that the Government should not devote a disproportionate amount of

resources to development projects which are conducive to creating a prosperous facade,resources to development projects which are conducive to creating a prosperous facade,resources to development projects which are conducive to creating a prosperous facade,resources to development projects which are conducive to creating a prosperous facade,

to the neglect of the interests of the sandwich and lower classes who are made toto the neglect of the interests of the sandwich and lower classes who are made toto the neglect of the interests of the sandwich and lower classes who are made toto the neglect of the interests of the sandwich and lower classes who are made to

pay the heavy price.pay the heavy price.pay the heavy price.pay the heavy price.

I would like to make the following proposals to the Government regarding theI would like to make the following proposals to the Government regarding theI would like to make the following proposals to the Government regarding theI would like to make the following proposals to the Government regarding the

direction of development of ACP projects:direction of development of ACP projects:direction of development of ACP projects:direction of development of ACP projects:

(a)(a)(a)(a) The Government should consider the actual economic and financial situationThe Government should consider the actual economic and financial situationThe Government should consider the actual economic and financial situationThe Government should consider the actual economic and financial situation

of Hong Kong and, after taking into account the real needs of the sandwich and lowerof Hong Kong and, after taking into account the real needs of the sandwich and lowerof Hong Kong and, after taking into account the real needs of the sandwich and lowerof Hong Kong and, after taking into account the real needs of the sandwich and lower

classes, make appropriate adjustments to the schedule of the works planned for theclasses, make appropriate adjustments to the schedule of the works planned for theclasses, make appropriate adjustments to the schedule of the works planned for theclasses, make appropriate adjustments to the schedule of the works planned for the

airport project, such that the negative social impact will be minimized.airport project, such that the negative social impact will be minimized.airport project, such that the negative social impact will be minimized.airport project, such that the negative social impact will be minimized.

(b)(b)(b)(b) It is stated in the Sino-British Memorandum of Understanding that noIt is stated in the Sino-British Memorandum of Understanding that noIt is stated in the Sino-British Memorandum of Understanding that noIt is stated in the Sino-British Memorandum of Understanding that no

borrowing beyond $5 billion may be made by the Hong Kong Government. In case theborrowing beyond $5 billion may be made by the Hong Kong Government. In case theborrowing beyond $5 billion may be made by the Hong Kong Government. In case theborrowing beyond $5 billion may be made by the Hong Kong Government. In case the

borrowing constraint proves to be too great a difficulty for the Government in termsborrowing constraint proves to be too great a difficulty for the Government in termsborrowing constraint proves to be too great a difficulty for the Government in termsborrowing constraint proves to be too great a difficulty for the Government in terms

of exploring different ways of financing the airport project, then it should seekof exploring different ways of financing the airport project, then it should seekof exploring different ways of financing the airport project, then it should seekof exploring different ways of financing the airport project, then it should seek

to relax that constraint through negotiation with the Chinese and Britishto relax that constraint through negotiation with the Chinese and Britishto relax that constraint through negotiation with the Chinese and Britishto relax that constraint through negotiation with the Chinese and British

Governments.Governments.Governments.Governments.

(c)(c)(c)(c) The Government should makeThe Government should makeThe Government should makeThe Government should make public the financial positions regarding all of public the financial positions regarding all of public the financial positions regarding all of public the financial positions regarding all of

the ACP projects instead of seeking to conceal the facts, even from the Legislativethe ACP projects instead of seeking to conceal the facts, even from the Legislativethe ACP projects instead of seeking to conceal the facts, even from the Legislativethe ACP projects instead of seeking to conceal the facts, even from the Legislative

Councillors as they vote on the funding arrangements.Councillors as they vote on the funding arrangements.Councillors as they vote on the funding arrangements.Councillors as they vote on the funding arrangements.

I appeal to the Financial Secretary to make appropriate amendments I appeal to the Financial Secretary to make appropriate amendments I appeal to the Financial Secretary to make appropriate amendments I appeal to the Financial Secretary to make appropriate amendments to the Budgetto the Budgetto the Budgetto the Budget

after listening to Members' views. Thank you, Mr Deputy President.after listening to Members' views. Thank you, Mr Deputy President.after listening to Members' views. Thank you, Mr Deputy President.after listening to Members' views. Thank you, Mr Deputy President.

REV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, expenditure on environmentalREV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, expenditure on environmentalREV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, expenditure on environmentalREV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, expenditure on environmental

protection has surged from 0.8% of total public expenditure in 1987-88 to an estimatedprotection has surged from 0.8% of total public expenditure in 1987-88 to an estimatedprotection has surged from 0.8% of total public expenditure in 1987-88 to an estimatedprotection has surged from 0.8% of total public expenditure in 1987-88 to an estimated

3% in 1992-93, or an increase by more than 300%. This growth rate has no rival among3% in 1992-93, or an increase by more than 300%. This growth rate has no rival among3% in 1992-93, or an increase by more than 300%. This growth rate has no rival among3% in 1992-93, or an increase by more than 300%. This growth rate has no rival among

other programme areas. It is laudable of the Government to commit so much to theother programme areas. It is laudable of the Government to commit so much to theother programme areas. It is laudable of the Government to commit so much to theother programme areas. It is laudable of the Government to commit so much to the

improvement of the environment but there is still room for improvement. Despite theimprovement of the environment but there is still room for improvement. Despite theimprovement of the environment but there is still room for improvement. Despite theimprovement of the environment but there is still room for improvement. Despite the

enormous efforts spent on its treatment, 32% of solid waste in Hong Kong will continueenormous efforts spent on its treatment, 32% of solid waste in Hong Kong will continueenormous efforts spent on its treatment, 32% of solid waste in Hong Kong will continueenormous efforts spent on its treatment, 32% of solid waste in Hong Kong will continue

to be disposed of in an environmentally unaccepted manner. Because of financialto be disposed of in an environmentally unaccepted manner. Because of financialto be disposed of in an environmentally unaccepted manner. Because of financialto be disposed of in an environmentally unaccepted manner. Because of financial

stringency, our sewage treatment programme has to be put off, meaning that our waterstringency, our sewage treatment programme has to be put off, meaning that our waterstringency, our sewage treatment programme has to be put off, meaning that our waterstringency, our sewage treatment programme has to be put off, meaning that our water

quality would not get improved as early as we would like to see. Hong Kong producesquality would not get improved as early as we would like to see. Hong Kong producesquality would not get improved as early as we would like to see. Hong Kong producesquality would not get improved as early as we would like to see. Hong Kong produces

more than 120 000 tonnes of chemical waste annually but our first chemical wastemore than 120 000 tonnes of chemical waste annually but our first chemical wastemore than 120 000 tonnes of chemical waste annually but our first chemical wastemore than 120 000 tonnes of chemical waste annually but our first chemical waste

disposal plant will not be completed until the end of this year. This explains whydisposal plant will not be completed until the end of this year. This explains whydisposal plant will not be completed until the end of this year. This explains whydisposal plant will not be completed until the end of this year. This explains why

90% of the chemical waste has been indiscrimately dumped, posing a serious health90% of the chemical waste has been indiscrimately dumped, posing a serious health90% of the chemical waste has been indiscrimately dumped, posing a serious health90% of the chemical waste has been indiscrimately dumped, posing a serious health

hazard. This plant, in fact, should have been completed at least five years ago.hazard. This plant, in fact, should have been completed at least five years ago.hazard. This plant, in fact, should have been completed at least five years ago.hazard. This plant, in fact, should have been completed at least five years ago.

In view of the deteriorating air pollution in Hong Kong, I wonder what has been keepingIn view of the deteriorating air pollution in Hong Kong, I wonder what has been keepingIn view of the deteriorating air pollution in Hong Kong, I wonder what has been keepingIn view of the deteriorating air pollution in Hong Kong, I wonder what has been keeping

the Government from taking prompt actions and mapping out a concrete programme tothe Government from taking prompt actions and mapping out a concrete programme tothe Government from taking prompt actions and mapping out a concrete programme tothe Government from taking prompt actions and mapping out a concrete programme to

tackle this problem. Hong Kong people have every right to enjoy a better environmenttackle this problem. Hong Kong people have every right to enjoy a better environmenttackle this problem. Hong Kong people have every right to enjoy a better environmenttackle this problem. Hong Kong people have every right to enjoy a better environment

with clean and fresh air. However, to our dismay, the scheduled closure of thewith clean and fresh air. However, to our dismay, the scheduled closure of thewith clean and fresh air. However, to our dismay, the scheduled closure of thewith clean and fresh air. However, to our dismay, the scheduled closure of the

Kennedy Town Incinerator in mid-1992 would have to be postponed for a year. On theKennedy Town Incinerator in mid-1992 would have to be postponed for a year. On theKennedy Town Incinerator in mid-1992 would have to be postponed for a year. On theKennedy Town Incinerator in mid-1992 would have to be postponed for a year. On the

other hand, the new rates of duties as proposed in this Budget have failed to encourageother hand, the new rates of duties as proposed in this Budget have failed to encourageother hand, the new rates of duties as proposed in this Budget have failed to encourageother hand, the new rates of duties as proposed in this Budget have failed to encourage

more drivers to use unleaded petrol. The situation of noise control also leaves muchmore drivers to use unleaded petrol. The situation of noise control also leaves muchmore drivers to use unleaded petrol. The situation of noise control also leaves muchmore drivers to use unleaded petrol. The situation of noise control also leaves much

to be desired. Take traffic noise as an example. Noise levels in many busy streetsto be desired. Take traffic noise as an example. Noise levels in many busy streetsto be desired. Take traffic noise as an example. Noise levels in many busy streetsto be desired. Take traffic noise as an example. Noise levels in many busy streets

are as high as before. In early 1990, I lodged a complaint with the Environmentalare as high as before. In early 1990, I lodged a complaint with the Environmentalare as high as before. In early 1990, I lodged a complaint with the Environmentalare as high as before. In early 1990, I lodged a complaint with the Environmental

Protection Department (EPD) that noise from travelling trains recorded at Hin KengProtection Department (EPD) that noise from travelling trains recorded at Hin KengProtection Department (EPD) that noise from travelling trains recorded at Hin KengProtection Department (EPD) that noise from travelling trains recorded at Hin Keng

Estate, Sha Tin, was above the legally acceptable level. In response, a few monthsEstate, Sha Tin, was above the legally acceptable level. In response, a few monthsEstate, Sha Tin, was above the legally acceptable level. In response, a few monthsEstate, Sha Tin, was above the legally acceptable level. In response, a few months

later, the EPD requested the Kowloon-Canton Railway Corporation to submit alater, the EPD requested the Kowloon-Canton Railway Corporation to submit alater, the EPD requested the Kowloon-Canton Railway Corporation to submit alater, the EPD requested the Kowloon-Canton Railway Corporation to submit a

consultancy report on noise reduction. But now nearly two years have lapsed, theconsultancy report on noise reduction. But now nearly two years have lapsed, theconsultancy report on noise reduction. But now nearly two years have lapsed, theconsultancy report on noise reduction. But now nearly two years have lapsed, the

consultancy report has not yet been made public. I wonder how long the residentsconsultancy report has not yet been made public. I wonder how long the residentsconsultancy report has not yet been made public. I wonder how long the residentsconsultancy report has not yet been made public. I wonder how long the residents

would continue to be subject to this ordeal.would continue to be subject to this ordeal.would continue to be subject to this ordeal.would continue to be subject to this ordeal.

Mr Deputy President, the overall expenditure on environmental protection inMr Deputy President, the overall expenditure on environmental protection inMr Deputy President, the overall expenditure on environmental protection inMr Deputy President, the overall expenditure on environmental protection in

1992-93 will go up by 27.4% over last year's figures. Unfortunately the expenditures1992-93 will go up by 27.4% over last year's figures. Unfortunately the expenditures1992-93 will go up by 27.4% over last year's figures. Unfortunately the expenditures1992-93 will go up by 27.4% over last year's figures. Unfortunately the expenditures

on the mitigation of air pollution and noise pollution will only grow by 6.2% andon the mitigation of air pollution and noise pollution will only grow by 6.2% andon the mitigation of air pollution and noise pollution will only grow by 6.2% andon the mitigation of air pollution and noise pollution will only grow by 6.2% and

7.2% respectively, well below the current inflation rate. In other words, allowing7.2% respectively, well below the current inflation rate. In other words, allowing7.2% respectively, well below the current inflation rate. In other words, allowing7.2% respectively, well below the current inflation rate. In other words, allowing

for inflation, expenditures on these two fronts will have a negative growth.for inflation, expenditures on these two fronts will have a negative growth.for inflation, expenditures on these two fronts will have a negative growth.for inflation, expenditures on these two fronts will have a negative growth.

On the other handOn the other handOn the other handOn the other hand, public expenditures on the treatment of solid waste and sewage, public expenditures on the treatment of solid waste and sewage, public expenditures on the treatment of solid waste and sewage, public expenditures on the treatment of solid waste and sewage

will rise by about 35% and close to 20% respectively. Though the effects of airwill rise by about 35% and close to 20% respectively. Though the effects of airwill rise by about 35% and close to 20% respectively. Though the effects of airwill rise by about 35% and close to 20% respectively. Though the effects of air

pollution and noise pollution are not as readily observable as those of solid wastepollution and noise pollution are not as readily observable as those of solid wastepollution and noise pollution are not as readily observable as those of solid wastepollution and noise pollution are not as readily observable as those of solid waste

and sewage, yet their hazards to our health are the same. We should therefore doubleand sewage, yet their hazards to our health are the same. We should therefore doubleand sewage, yet their hazards to our health are the same. We should therefore doubleand sewage, yet their hazards to our health are the same. We should therefore double

our efforts in dealing with them rather than treating them differently.our efforts in dealing with them rather than treating them differently.our efforts in dealing with them rather than treating them differently.our efforts in dealing with them rather than treating them differently.

The aforesaid measures are all but passive in nature. As far as positive measuresThe aforesaid measures are all but passive in nature. As far as positive measuresThe aforesaid measures are all but passive in nature. As far as positive measuresThe aforesaid measures are all but passive in nature. As far as positive measures

are concerned, Hong Kong is lagging far behind other developed cities. In thoseare concerned, Hong Kong is lagging far behind other developed cities. In thoseare concerned, Hong Kong is lagging far behind other developed cities. In thoseare concerned, Hong Kong is lagging far behind other developed cities. In those

cities, collecting and recycling assorted waste are being vigorously pursued; shopscities, collecting and recycling assorted waste are being vigorously pursued; shopscities, collecting and recycling assorted waste are being vigorously pursued; shopscities, collecting and recycling assorted waste are being vigorously pursued; shops

now hand out paper bags rather than plastic bags to customers; products made ofnow hand out paper bags rather than plastic bags to customers; products made ofnow hand out paper bags rather than plastic bags to customers; products made ofnow hand out paper bags rather than plastic bags to customers; products made of

recycled paper are very popular; leaflets are distributed by the governments torecycled paper are very popular; leaflets are distributed by the governments torecycled paper are very popular; leaflets are distributed by the governments torecycled paper are very popular; leaflets are distributed by the governments to

disseminate advice on, inter alia, how to cut down and reuse waste, conserve energydisseminate advice on, inter alia, how to cut down and reuse waste, conserve energydisseminate advice on, inter alia, how to cut down and reuse waste, conserve energydisseminate advice on, inter alia, how to cut down and reuse waste, conserve energy

and use safe and non-toxic household appliances; and they also attach great importanceand use safe and non-toxic household appliances; and they also attach great importanceand use safe and non-toxic household appliances; and they also attach great importanceand use safe and non-toxic household appliances; and they also attach great importance

to planting trees in and around their cities. Hong Kong, though a modern city, isto planting trees in and around their cities. Hong Kong, though a modern city, isto planting trees in and around their cities. Hong Kong, though a modern city, isto planting trees in and around their cities. Hong Kong, though a modern city, is

relatively backward in terms of positive environmental protection. Measures suchrelatively backward in terms of positive environmental protection. Measures suchrelatively backward in terms of positive environmental protection. Measures suchrelatively backward in terms of positive environmental protection. Measures such

as building more greenbelts, waste collection and recycling, instiling into peopleas building more greenbelts, waste collection and recycling, instiling into peopleas building more greenbelts, waste collection and recycling, instiling into peopleas building more greenbelts, waste collection and recycling, instiling into people

routine knowledge on environmental protection, beefing up the environment protectionroutine knowledge on environmental protection, beefing up the environment protectionroutine knowledge on environmental protection, beefing up the environment protectionroutine knowledge on environmental protection, beefing up the environment protection

curicula at the primary and secondary levels, controlling the use of foam plasticcuricula at the primary and secondary levels, controlling the use of foam plasticcuricula at the primary and secondary levels, controlling the use of foam plasticcuricula at the primary and secondary levels, controlling the use of foam plastic

products to protect the ozone layer, and encouraging energy conservation all needproducts to protect the ozone layer, and encouraging energy conservation all needproducts to protect the ozone layer, and encouraging energy conservation all needproducts to protect the ozone layer, and encouraging energy conservation all need

to be positively promoted by our Government.to be positively promoted by our Government.to be positively promoted by our Government.to be positively promoted by our Government.

Despite the fact that sDespite the fact that sDespite the fact that sDespite the fact that spending on environmental protection has gone uppending on environmental protection has gone uppending on environmental protection has gone uppending on environmental protection has gone up

dramatically during the past few years, it still accounts for only 3% of our totaldramatically during the past few years, it still accounts for only 3% of our totaldramatically during the past few years, it still accounts for only 3% of our totaldramatically during the past few years, it still accounts for only 3% of our total

public expenditure. According to the Financial Secretary's forecast, publicpublic expenditure. According to the Financial Secretary's forecast, publicpublic expenditure. According to the Financial Secretary's forecast, publicpublic expenditure. According to the Financial Secretary's forecast, public

expenditure on environmental protection will be maintained at 3.3% over the periodexpenditure on environmental protection will be maintained at 3.3% over the periodexpenditure on environmental protection will be maintained at 3.3% over the periodexpenditure on environmental protection will be maintained at 3.3% over the period

from 1993-94 to 1996-97. This percentage is far lower than that of many other citiesfrom 1993-94 to 1996-97. This percentage is far lower than that of many other citiesfrom 1993-94 to 1996-97. This percentage is far lower than that of many other citiesfrom 1993-94 to 1996-97. This percentage is far lower than that of many other cities

with some of them spending more than 10%. On the other hand, Minister or Secretarywith some of them spending more than 10%. On the other hand, Minister or Secretarywith some of them spending more than 10%. On the other hand, Minister or Secretarywith some of them spending more than 10%. On the other hand, Minister or Secretary

of the Environment is an office commonly established in many countries. To set upof the Environment is an office commonly established in many countries. To set upof the Environment is an office commonly established in many countries. To set upof the Environment is an office commonly established in many countries. To set up

a ministry or department with special responsibility for environmental mattersa ministry or department with special responsibility for environmental mattersa ministry or department with special responsibility for environmental mattersa ministry or department with special responsibility for environmental matters

demonstrates that environmental control is taken seriously and makes sure that otherdemonstrates that environmental control is taken seriously and makes sure that otherdemonstrates that environmental control is taken seriously and makes sure that otherdemonstrates that environmental control is taken seriously and makes sure that other

policies will not be pursued at the expense of environmental protection. However,policies will not be pursued at the expense of environmental protection. However,policies will not be pursued at the expense of environmental protection. However,policies will not be pursued at the expense of environmental protection. However,

we have only the Secretary for Planning, Environment and Lands who is required towe have only the Secretary for Planning, Environment and Lands who is required towe have only the Secretary for Planning, Environment and Lands who is required towe have only the Secretary for Planning, Environment and Lands who is required to

wear three different hats. How can he take good care of these policy areas and thewear three different hats. How can he take good care of these policy areas and thewear three different hats. How can he take good care of these policy areas and thewear three different hats. How can he take good care of these policy areas and the

onerous work involved? How can he make up his mind when, say, certain landonerous work involved? How can he make up his mind when, say, certain landonerous work involved? How can he make up his mind when, say, certain landonerous work involved? How can he make up his mind when, say, certain land

development runs counter to environment policy? We should apply more resources todevelopment runs counter to environment policy? We should apply more resources todevelopment runs counter to environment policy? We should apply more resources todevelopment runs counter to environment policy? We should apply more resources to

and concern ourselves more about environmental protection matters.and concern ourselves more about environmental protection matters.and concern ourselves more about environmental protection matters.and concern ourselves more about environmental protection matters.

I fully understand that environmental protection work requires financialI fully understand that environmental protection work requires financialI fully understand that environmental protection work requires financialI fully understand that environmental protection work requires financial

resources. As such, the Government should put into practice the principle ofresources. As such, the Government should put into practice the principle ofresources. As such, the Government should put into practice the principle ofresources. As such, the Government should put into practice the principle of

"polluters pay" to generate more revenues as early as practically possible. Now 60%"polluters pay" to generate more revenues as early as practically possible. Now 60%"polluters pay" to generate more revenues as early as practically possible. Now 60%"polluters pay" to generate more revenues as early as practically possible. Now 60%

of sewage in Hong Kong is generated by industrial activities and more than half ofof sewage in Hong Kong is generated by industrial activities and more than half ofof sewage in Hong Kong is generated by industrial activities and more than half ofof sewage in Hong Kong is generated by industrial activities and more than half of

the waste sent to landfills is construction waste. There is no reason for thethe waste sent to landfills is construction waste. There is no reason for thethe waste sent to landfills is construction waste. There is no reason for thethe waste sent to landfills is construction waste. There is no reason for the

taxpayers to foot the bill. Besides, the cost involved is staggering. The sewagetaxpayers to foot the bill. Besides, the cost involved is staggering. The sewagetaxpayers to foot the bill. Besides, the cost involved is staggering. The sewagetaxpayers to foot the bill. Besides, the cost involved is staggering. The sewage

strategy proposed, which is designed to treat our sewage, has a price tag of morestrategy proposed, which is designed to treat our sewage, has a price tag of morestrategy proposed, which is designed to treat our sewage, has a price tag of morestrategy proposed, which is designed to treat our sewage, has a price tag of more

than $16 billion. the cost required to construct a landfill would be in excess ofthan $16 billion. the cost required to construct a landfill would be in excess ofthan $16 billion. the cost required to construct a landfill would be in excess ofthan $16 billion. the cost required to construct a landfill would be in excess of

$3 billion. I know that the Government is currently deliberating ways to charge$3 billion. I know that the Government is currently deliberating ways to charge$3 billion. I know that the Government is currently deliberating ways to charge$3 billion. I know that the Government is currently deliberating ways to charge

sewage treatment fee and is yet to make known the details. Nor is there any concretesewage treatment fee and is yet to make known the details. Nor is there any concretesewage treatment fee and is yet to make known the details. Nor is there any concretesewage treatment fee and is yet to make known the details. Nor is there any concrete

plan with regard to the charging of construction waste disposal fee. In the comingplan with regard to the charging of construction waste disposal fee. In the comingplan with regard to the charging of construction waste disposal fee. In the comingplan with regard to the charging of construction waste disposal fee. In the coming

financial year (1992-93), a total of $446.5 million is earmarked for these twofinancial year (1992-93), a total of $446.5 million is earmarked for these twofinancial year (1992-93), a total of $446.5 million is earmarked for these twofinancial year (1992-93), a total of $446.5 million is earmarked for these two

services. This is very unfair to the taxpayers in view of the fact that more thanservices. This is very unfair to the taxpayers in view of the fact that more thanservices. This is very unfair to the taxpayers in view of the fact that more thanservices. This is very unfair to the taxpayers in view of the fact that more than

half of the amount will be used to subsidize business operations. I hope that thehalf of the amount will be used to subsidize business operations. I hope that thehalf of the amount will be used to subsidize business operations. I hope that thehalf of the amount will be used to subsidize business operations. I hope that the

Administration will come up with the details of the scheme as soon as possible toAdministration will come up with the details of the scheme as soon as possible toAdministration will come up with the details of the scheme as soon as possible toAdministration will come up with the details of the scheme as soon as possible to

charge commercial and industrial polluters fee for sewage treatment and solid wastecharge commercial and industrial polluters fee for sewage treatment and solid wastecharge commercial and industrial polluters fee for sewage treatment and solid wastecharge commercial and industrial polluters fee for sewage treatment and solid waste

disposal.disposal.disposal.disposal.

Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.

MR MAN SAI-CHEONG (in Cantonese): Firstly, I would like to comment on the tax burdenMR MAN SAI-CHEONG (in Cantonese): Firstly, I would like to comment on the tax burdenMR MAN SAI-CHEONG (in Cantonese): Firstly, I would like to comment on the tax burdenMR MAN SAI-CHEONG (in Cantonese): Firstly, I would like to comment on the tax burden

borne by our middle class. Equity is an important principle in taxation, but inequityborne by our middle class. Equity is an important principle in taxation, but inequityborne by our middle class. Equity is an important principle in taxation, but inequityborne by our middle class. Equity is an important principle in taxation, but inequity

is found in our existing salaries taxation system. The lower the income of a family,is found in our existing salaries taxation system. The lower the income of a family,is found in our existing salaries taxation system. The lower the income of a family,is found in our existing salaries taxation system. The lower the income of a family,

the higher percentage would be its expenditure on daily necessities in relation tothe higher percentage would be its expenditure on daily necessities in relation tothe higher percentage would be its expenditure on daily necessities in relation tothe higher percentage would be its expenditure on daily necessities in relation to

its total income. On the contrary, daily expenditure would constitute a lowerits total income. On the contrary, daily expenditure would constitute a lowerits total income. On the contrary, daily expenditure would constitute a lowerits total income. On the contrary, daily expenditure would constitute a lower

percentage of a high-income family. A fair taxation system, thus, should look afterpercentage of a high-income family. A fair taxation system, thus, should look afterpercentage of a high-income family. A fair taxation system, thus, should look afterpercentage of a high-income family. A fair taxation system, thus, should look after

the middle and lower income groups by relieving them of the pressure of tax payouts.the middle and lower income groups by relieving them of the pressure of tax payouts.the middle and lower income groups by relieving them of the pressure of tax payouts.the middle and lower income groups by relieving them of the pressure of tax payouts.

A middle-income earner of, say, $20,000 a month would spend a much greater proportionA middle-income earner of, say, $20,000 a month would spend a much greater proportionA middle-income earner of, say, $20,000 a month would spend a much greater proportionA middle-income earner of, say, $20,000 a month would spend a much greater proportion

of his income on living necessities than a high-income earner of $100,000 a month.of his income on living necessities than a high-income earner of $100,000 a month.of his income on living necessities than a high-income earner of $100,000 a month.of his income on living necessities than a high-income earner of $100,000 a month.

Nevertheless, under the Financial Secretary's proposals, both are to be taxed at theNevertheless, under the Financial Secretary's proposals, both are to be taxed at theNevertheless, under the Financial Secretary's proposals, both are to be taxed at theNevertheless, under the Financial Secretary's proposals, both are to be taxed at the

standard rate of 15%. This is not in line with the principle of equity.standard rate of 15%. This is not in line with the principle of equity.standard rate of 15%. This is not in line with the principle of equity.standard rate of 15%. This is not in line with the principle of equity.

Although it is true that Hong Kong's tax rate as a whole is lower than that ofAlthough it is true that Hong Kong's tax rate as a whole is lower than that ofAlthough it is true that Hong Kong's tax rate as a whole is lower than that ofAlthough it is true that Hong Kong's tax rate as a whole is lower than that of

a number of developed countries, our welfare system does not compare favourably witha number of developed countries, our welfare system does not compare favourably witha number of developed countries, our welfare system does not compare favourably witha number of developed countries, our welfare system does not compare favourably with

them. The Government has been stressing its low tax rate in its fiscal philosophy;them. The Government has been stressing its low tax rate in its fiscal philosophy;them. The Government has been stressing its low tax rate in its fiscal philosophy;them. The Government has been stressing its low tax rate in its fiscal philosophy;

but while the rate is indeed low for high-income earners, the rate is not low forbut while the rate is indeed low for high-income earners, the rate is not low forbut while the rate is indeed low for high-income earners, the rate is not low forbut while the rate is indeed low for high-income earners, the rate is not low for

middle-income earners who are neither eligible for public housing nor a number ofmiddle-income earners who are neither eligible for public housing nor a number ofmiddle-income earners who are neither eligible for public housing nor a number ofmiddle-income earners who are neither eligible for public housing nor a number of

social welfare services. They have to support their families, purchase their homes;social welfare services. They have to support their families, purchase their homes;social welfare services. They have to support their families, purchase their homes;social welfare services. They have to support their families, purchase their homes;

and in the end they have to pay tax at more or less the same rate as that of theand in the end they have to pay tax at more or less the same rate as that of theand in the end they have to pay tax at more or less the same rate as that of theand in the end they have to pay tax at more or less the same rate as that of the

high-income earners. A couple of days ago, the Financial Secretary proposed thathigh-income earners. A couple of days ago, the Financial Secretary proposed thathigh-income earners. A couple of days ago, the Financial Secretary proposed thathigh-income earners. A couple of days ago, the Financial Secretary proposed that

a new housing scheme be planned for the sandwich class. I wonder if the proposala new housing scheme be planned for the sandwich class. I wonder if the proposala new housing scheme be planned for the sandwich class. I wonder if the proposala new housing scheme be planned for the sandwich class. I wonder if the proposal

is a compromising measure in exchange for agreement votes from Members of this Council.is a compromising measure in exchange for agreement votes from Members of this Council.is a compromising measure in exchange for agreement votes from Members of this Council.is a compromising measure in exchange for agreement votes from Members of this Council.

The fact is that the sandwich class are being exhausted with their housing problem,The fact is that the sandwich class are being exhausted with their housing problem,The fact is that the sandwich class are being exhausted with their housing problem,The fact is that the sandwich class are being exhausted with their housing problem,

in particular young couples who have to rent or purchase a flat for their new family.in particular young couples who have to rent or purchase a flat for their new family.in particular young couples who have to rent or purchase a flat for their new family.in particular young couples who have to rent or purchase a flat for their new family.

At present, a four-person family earning $10,000 a month is ineligible for publicAt present, a four-person family earning $10,000 a month is ineligible for publicAt present, a four-person family earning $10,000 a month is ineligible for publicAt present, a four-person family earning $10,000 a month is ineligible for public

housing and obliged to pay tax. The monthly income limit for public housinghousing and obliged to pay tax. The monthly income limit for public housinghousing and obliged to pay tax. The monthly income limit for public housinghousing and obliged to pay tax. The monthly income limit for public housing

application is $9,700. I myself and fellow members of the United Democrats of Hongapplication is $9,700. I myself and fellow members of the United Democrats of Hongapplication is $9,700. I myself and fellow members of the United Democrats of Hongapplication is $9,700. I myself and fellow members of the United Democrats of Hong

Kong sincerely hope that the Financial Secretary would announce details of the schemeKong sincerely hope that the Financial Secretary would announce details of the schemeKong sincerely hope that the Financial Secretary would announce details of the schemeKong sincerely hope that the Financial Secretary would announce details of the scheme

as soon as possible to provide relief to the sandwich class.as soon as possible to provide relief to the sandwich class.as soon as possible to provide relief to the sandwich class.as soon as possible to provide relief to the sandwich class.

The Financial Secretary's proposal to increase the personal allowance for singleThe Financial Secretary's proposal to increase the personal allowance for singleThe Financial Secretary's proposal to increase the personal allowance for singleThe Financial Secretary's proposal to increase the personal allowance for single

persons only by $5,000 has been widely criticized by almost all Members in this Council.persons only by $5,000 has been widely criticized by almost all Members in this Council.persons only by $5,000 has been widely criticized by almost all Members in this Council.persons only by $5,000 has been widely criticized by almost all Members in this Council.

In addition, I wish to point out that, apart from personal allowance, tax band shouldIn addition, I wish to point out that, apart from personal allowance, tax band shouldIn addition, I wish to point out that, apart from personal allowance, tax band shouldIn addition, I wish to point out that, apart from personal allowance, tax band should

also be widened without delay. There are now four tax bands striding $20,000 each,also be widened without delay. There are now four tax bands striding $20,000 each,also be widened without delay. There are now four tax bands striding $20,000 each,also be widened without delay. There are now four tax bands striding $20,000 each,

and the tax increases range between 7% and 8% for each band. If the Governmentand the tax increases range between 7% and 8% for each band. If the Governmentand the tax increases range between 7% and 8% for each band. If the Governmentand the tax increases range between 7% and 8% for each band. If the Government

maintains the tax rate and widens the tax band from $20,000 to $30,000, the tax burdenmaintains the tax rate and widens the tax band from $20,000 to $30,000, the tax burdenmaintains the tax rate and widens the tax band from $20,000 to $30,000, the tax burdenmaintains the tax rate and widens the tax band from $20,000 to $30,000, the tax burden

shouldered by some middle-income families would be much reduced. This, of course,shouldered by some middle-income families would be much reduced. This, of course,shouldered by some middle-income families would be much reduced. This, of course,shouldered by some middle-income families would be much reduced. This, of course,

will induce trimming on the public coffers, but before practical measures arewill induce trimming on the public coffers, but before practical measures arewill induce trimming on the public coffers, but before practical measures arewill induce trimming on the public coffers, but before practical measures are

implemented to help the sandwich class meet their housing and living needs, theimplemented to help the sandwich class meet their housing and living needs, theimplemented to help the sandwich class meet their housing and living needs, theimplemented to help the sandwich class meet their housing and living needs, the

widening of the tax band is a way to provide immediate relief to the sandwich class.widening of the tax band is a way to provide immediate relief to the sandwich class.widening of the tax band is a way to provide immediate relief to the sandwich class.widening of the tax band is a way to provide immediate relief to the sandwich class.

This will also create a more equitable taxation system, sparing some middle-incomeThis will also create a more equitable taxation system, sparing some middle-incomeThis will also create a more equitable taxation system, sparing some middle-incomeThis will also create a more equitable taxation system, sparing some middle-income

earners from paying tax at the standard rate like those high-income earners.earners from paying tax at the standard rate like those high-income earners.earners from paying tax at the standard rate like those high-income earners.earners from paying tax at the standard rate like those high-income earners.

Therefore, both personal allowance and tax band should be adjusted accordingly underTherefore, both personal allowance and tax band should be adjusted accordingly underTherefore, both personal allowance and tax band should be adjusted accordingly underTherefore, both personal allowance and tax band should be adjusted accordingly under

this period of high inflation. I hereby urge the Financial Secretary to be readythis period of high inflation. I hereby urge the Financial Secretary to be readythis period of high inflation. I hereby urge the Financial Secretary to be readythis period of high inflation. I hereby urge the Financial Secretary to be ready

to accept good advice and to consider widening the tax band.to accept good advice and to consider widening the tax band.to accept good advice and to consider widening the tax band.to accept good advice and to consider widening the tax band.

I would also like to comment on the Government's expeI would also like to comment on the Government's expeI would also like to comment on the Government's expeI would also like to comment on the Government's expenditure on education in Hongnditure on education in Hongnditure on education in Hongnditure on education in Hong

Kong. While the other three "dragons" in Asia, namely South Korea, Taiwan andKong. While the other three "dragons" in Asia, namely South Korea, Taiwan andKong. While the other three "dragons" in Asia, namely South Korea, Taiwan andKong. While the other three "dragons" in Asia, namely South Korea, Taiwan and

Singapore, have been spending 4% to 5% of their GDP on education as early as the 1970s,Singapore, have been spending 4% to 5% of their GDP on education as early as the 1970s,Singapore, have been spending 4% to 5% of their GDP on education as early as the 1970s,Singapore, have been spending 4% to 5% of their GDP on education as early as the 1970s,

Hong Kong's spending in this regard has just reached 3% by now. We are worried ifHong Kong's spending in this regard has just reached 3% by now. We are worried ifHong Kong's spending in this regard has just reached 3% by now. We are worried ifHong Kong's spending in this regard has just reached 3% by now. We are worried if

Hong Kong is able to nurture enough talent to cope with its needs for economicHong Kong is able to nurture enough talent to cope with its needs for economicHong Kong is able to nurture enough talent to cope with its needs for economicHong Kong is able to nurture enough talent to cope with its needs for economic

development. Such situation has also confined Hong Kong's economic transition todevelopment. Such situation has also confined Hong Kong's economic transition todevelopment. Such situation has also confined Hong Kong's economic transition todevelopment. Such situation has also confined Hong Kong's economic transition to

service industry, without achieving the state of high technology. Besides, althoughservice industry, without achieving the state of high technology. Besides, althoughservice industry, without achieving the state of high technology. Besides, althoughservice industry, without achieving the state of high technology. Besides, although

the estimated expenditure on education for 1992-93 reached a total of $11.85 billion,the estimated expenditure on education for 1992-93 reached a total of $11.85 billion,the estimated expenditure on education for 1992-93 reached a total of $11.85 billion,the estimated expenditure on education for 1992-93 reached a total of $11.85 billion,

pre-school education was neglected and government subsidy, for long, has not coveredpre-school education was neglected and government subsidy, for long, has not coveredpre-school education was neglected and government subsidy, for long, has not coveredpre-school education was neglected and government subsidy, for long, has not covered

this sector. But the fact is that about 90% of those aged three to six are attendingthis sector. But the fact is that about 90% of those aged three to six are attendingthis sector. But the fact is that about 90% of those aged three to six are attendingthis sector. But the fact is that about 90% of those aged three to six are attending

nursery schools. This demand reflects that the Government should be committed tonursery schools. This demand reflects that the Government should be committed tonursery schools. This demand reflects that the Government should be committed tonursery schools. This demand reflects that the Government should be committed to

pre-school education. The imminent task, at least, is to provide training programmespre-school education. The imminent task, at least, is to provide training programmespre-school education. The imminent task, at least, is to provide training programmespre-school education. The imminent task, at least, is to provide training programmes

for pre-school teachers. For the sake of our next generation and to sustain ourfor pre-school teachers. For the sake of our next generation and to sustain ourfor pre-school teachers. For the sake of our next generation and to sustain ourfor pre-school teachers. For the sake of our next generation and to sustain our

economic development, I urge the Government to enhance its financial commitment oneconomic development, I urge the Government to enhance its financial commitment oneconomic development, I urge the Government to enhance its financial commitment oneconomic development, I urge the Government to enhance its financial commitment on

education and, in particular, not to shirk its responsibility repeatedly in respecteducation and, in particular, not to shirk its responsibility repeatedly in respecteducation and, in particular, not to shirk its responsibility repeatedly in respecteducation and, in particular, not to shirk its responsibility repeatedly in respect

of pre-school education.of pre-school education.of pre-school education.of pre-school education.

I earnestly call upon the Government not to cut the speI earnestly call upon the Government not to cut the speI earnestly call upon the Government not to cut the speI earnestly call upon the Government not to cut the spending on cultural,nding on cultural,nding on cultural,nding on cultural,

recreational and artistic activities. If we hope our society will brim withrecreational and artistic activities. If we hope our society will brim withrecreational and artistic activities. If we hope our society will brim withrecreational and artistic activities. If we hope our society will brim with

creativity, rich leisure activities and better quality of life, such expenditure iscreativity, rich leisure activities and better quality of life, such expenditure iscreativity, rich leisure activities and better quality of life, such expenditure iscreativity, rich leisure activities and better quality of life, such expenditure is

not a luxury but a must. For some members of the middle class or sandwich class,not a luxury but a must. For some members of the middle class or sandwich class,not a luxury but a must. For some members of the middle class or sandwich class,not a luxury but a must. For some members of the middle class or sandwich class,

what they benefit most from the Government may be these cultural and recreationalwhat they benefit most from the Government may be these cultural and recreationalwhat they benefit most from the Government may be these cultural and recreationalwhat they benefit most from the Government may be these cultural and recreational

activities. Nowadays, in the 1990s, many people generally attach much importanceactivities. Nowadays, in the 1990s, many people generally attach much importanceactivities. Nowadays, in the 1990s, many people generally attach much importanceactivities. Nowadays, in the 1990s, many people generally attach much importance

to the quality of life and cultural life. Cultural, recreational and artisticto the quality of life and cultural life. Cultural, recreational and artisticto the quality of life and cultural life. Cultural, recreational and artisticto the quality of life and cultural life. Cultural, recreational and artistic

activities and sports are no longer extras. Subsidies to arts organization have aactivities and sports are no longer extras. Subsidies to arts organization have aactivities and sports are no longer extras. Subsidies to arts organization have aactivities and sports are no longer extras. Subsidies to arts organization have a

direct bearing on their existence and on the overall development of the arts circlesdirect bearing on their existence and on the overall development of the arts circlesdirect bearing on their existence and on the overall development of the arts circlesdirect bearing on their existence and on the overall development of the arts circles

in Hong Kong. I trust that we do not want to see that graduates of the Hong Kongin Hong Kong. I trust that we do not want to see that graduates of the Hong Kongin Hong Kong. I trust that we do not want to see that graduates of the Hong Kongin Hong Kong. I trust that we do not want to see that graduates of the Hong Kong

Academy for Performing Arts would become unemployed or cannot gear their trainingAcademy for Performing Arts would become unemployed or cannot gear their trainingAcademy for Performing Arts would become unemployed or cannot gear their trainingAcademy for Performing Arts would become unemployed or cannot gear their training

to practical use.to practical use.to practical use.to practical use.

Finally, I would like to comment on the cost-effectiveness of the proposedFinally, I would like to comment on the cost-effectiveness of the proposedFinally, I would like to comment on the cost-effectiveness of the proposedFinally, I would like to comment on the cost-effectiveness of the proposed

corporatization of Radio Television Hong Kong (RTHK). This time the Budget makescorporatization of Radio Television Hong Kong (RTHK). This time the Budget makescorporatization of Radio Television Hong Kong (RTHK). This time the Budget makescorporatization of Radio Television Hong Kong (RTHK). This time the Budget makes

no mention of the economic benefits of the corporatization of RTHK. According tono mention of the economic benefits of the corporatization of RTHK. According tono mention of the economic benefits of the corporatization of RTHK. According tono mention of the economic benefits of the corporatization of RTHK. According to

the estimates by the authorities, for the first year after corporatization, therethe estimates by the authorities, for the first year after corporatization, therethe estimates by the authorities, for the first year after corporatization, therethe estimates by the authorities, for the first year after corporatization, there

would be savings of $77 million, or 19% of the total spending for 1990-91. In thewould be savings of $77 million, or 19% of the total spending for 1990-91. In thewould be savings of $77 million, or 19% of the total spending for 1990-91. In thewould be savings of $77 million, or 19% of the total spending for 1990-91. In the

subsequent five years, there would be further savings of $97 million per annum, orsubsequent five years, there would be further savings of $97 million per annum, orsubsequent five years, there would be further savings of $97 million per annum, orsubsequent five years, there would be further savings of $97 million per annum, or

25% of the annual spending. That means for the first five years, we will have savings25% of the annual spending. That means for the first five years, we will have savings25% of the annual spending. That means for the first five years, we will have savings25% of the annual spending. That means for the first five years, we will have savings

totalling $500 million. Therefore, the corporatization of RTHK can reduce thetotalling $500 million. Therefore, the corporatization of RTHK can reduce thetotalling $500 million. Therefore, the corporatization of RTHK can reduce thetotalling $500 million. Therefore, the corporatization of RTHK can reduce the

financial burden on the Government. After corporatization, RTHK can model upon thefinancial burden on the Government. After corporatization, RTHK can model upon thefinancial burden on the Government. After corporatization, RTHK can model upon thefinancial burden on the Government. After corporatization, RTHK can model upon the

administrative system of BBC in the United Kingdom. It can produce a large numberadministrative system of BBC in the United Kingdom. It can produce a large numberadministrative system of BBC in the United Kingdom. It can produce a large numberadministrative system of BBC in the United Kingdom. It can produce a large number

of programmes which serve information, entertainment, as well as educational purposesof programmes which serve information, entertainment, as well as educational purposesof programmes which serve information, entertainment, as well as educational purposesof programmes which serve information, entertainment, as well as educational purposes

and maybe these programmes can be sold overseas for the promotion of Hong Kong'sand maybe these programmes can be sold overseas for the promotion of Hong Kong'sand maybe these programmes can be sold overseas for the promotion of Hong Kong'sand maybe these programmes can be sold overseas for the promotion of Hong Kong's

culture. The administrative operation of RTHK will be more cost-effective afterculture. The administrative operation of RTHK will be more cost-effective afterculture. The administrative operation of RTHK will be more cost-effective afterculture. The administrative operation of RTHK will be more cost-effective after

corporatization so that RTHK can become more efficient, meet the needs of the publiccorporatization so that RTHK can become more efficient, meet the needs of the publiccorporatization so that RTHK can become more efficient, meet the needs of the publiccorporatization so that RTHK can become more efficient, meet the needs of the public

more adequately and produce various kinds of programmes more flexibly. At the samemore adequately and produce various kinds of programmes more flexibly. At the samemore adequately and produce various kinds of programmes more flexibly. At the samemore adequately and produce various kinds of programmes more flexibly. At the same

time, the morale of the staff of RTHK will be boosted and they will no longer havetime, the morale of the staff of RTHK will be boosted and they will no longer havetime, the morale of the staff of RTHK will be boosted and they will no longer havetime, the morale of the staff of RTHK will be boosted and they will no longer have

to face uncertainty about their future. Therefore, on the principle of tapping newto face uncertainty about their future. Therefore, on the principle of tapping newto face uncertainty about their future. Therefore, on the principle of tapping newto face uncertainty about their future. Therefore, on the principle of tapping new

revenue sources and cutting back expenditure, I hope that the Government willrevenue sources and cutting back expenditure, I hope that the Government willrevenue sources and cutting back expenditure, I hope that the Government willrevenue sources and cutting back expenditure, I hope that the Government will

implement the corporatization of RTHK as scheduled in next April.implement the corporatization of RTHK as scheduled in next April.implement the corporatization of RTHK as scheduled in next April.implement the corporatization of RTHK as scheduled in next April.

Mr Deputy President, a responsible government should be a government which willMr Deputy President, a responsible government should be a government which willMr Deputy President, a responsible government should be a government which willMr Deputy President, a responsible government should be a government which will

listen to public opinion, care about people's lives and take actions to improve theirlisten to public opinion, care about people's lives and take actions to improve theirlisten to public opinion, care about people's lives and take actions to improve theirlisten to public opinion, care about people's lives and take actions to improve their

livelihood. For the sandwich class, they do not benefit from the economic growthlivelihood. For the sandwich class, they do not benefit from the economic growthlivelihood. For the sandwich class, they do not benefit from the economic growthlivelihood. For the sandwich class, they do not benefit from the economic growth

as far as their housing and livelihood are concerned. If the Government still refusesas far as their housing and livelihood are concerned. If the Government still refusesas far as their housing and livelihood are concerned. If the Government still refusesas far as their housing and livelihood are concerned. If the Government still refuses

to budge and is unwilling to make any change in tax band in response to the sandwichto budge and is unwilling to make any change in tax band in response to the sandwichto budge and is unwilling to make any change in tax band in response to the sandwichto budge and is unwilling to make any change in tax band in response to the sandwich

class's pleas, they, who constitute a majority of our population and have long beenclass's pleas, they, who constitute a majority of our population and have long beenclass's pleas, they, who constitute a majority of our population and have long beenclass's pleas, they, who constitute a majority of our population and have long been

neglected "in the tax net", will be greatly disappointed.neglected "in the tax net", will be greatly disappointed.neglected "in the tax net", will be greatly disappointed.neglected "in the tax net", will be greatly disappointed.

MR STEVEN POON (in Cantonese): Mr Deputy President, I have some reservations aboutMR STEVEN POON (in Cantonese): Mr Deputy President, I have some reservations aboutMR STEVEN POON (in Cantonese): Mr Deputy President, I have some reservations aboutMR STEVEN POON (in Cantonese): Mr Deputy President, I have some reservations about

a number of items in the Budget. I am particularly disappointed in its failure toa number of items in the Budget. I am particularly disappointed in its failure toa number of items in the Budget. I am particularly disappointed in its failure toa number of items in the Budget. I am particularly disappointed in its failure to

raise personal allowance to a higher level and its failure to make any attempt atraise personal allowance to a higher level and its failure to make any attempt atraise personal allowance to a higher level and its failure to make any attempt atraise personal allowance to a higher level and its failure to make any attempt at

all to widen the tax band.all to widen the tax band.all to widen the tax band.all to widen the tax band.

Suppose a household of a married couple with two children was making $200,000Suppose a household of a married couple with two children was making $200,000Suppose a household of a married couple with two children was making $200,000Suppose a household of a married couple with two children was making $200,000

annually in 1987. If their income has kept pace with inflation, then their householdannually in 1987. If their income has kept pace with inflation, then their householdannually in 1987. If their income has kept pace with inflation, then their householdannually in 1987. If their income has kept pace with inflation, then their household

income in 1991 should be in the region of $300,000. The salaries tax rate applicableincome in 1991 should be in the region of $300,000. The salaries tax rate applicableincome in 1991 should be in the region of $300,000. The salaries tax rate applicableincome in 1991 should be in the region of $300,000. The salaries tax rate applicable

to them in 1987 was 10.6% but will reach 13% in 1991. In other words, the Financialto them in 1987 was 10.6% but will reach 13% in 1991. In other words, the Financialto them in 1987 was 10.6% but will reach 13% in 1991. In other words, the Financialto them in 1987 was 10.6% but will reach 13% in 1991. In other words, the Financial

Secretary has failed to adjust personal allowance and tax band with inflation thusSecretary has failed to adjust personal allowance and tax band with inflation thusSecretary has failed to adjust personal allowance and tax band with inflation thusSecretary has failed to adjust personal allowance and tax band with inflation thus

leading to a situation under which the sandwich class ends up paying a salaries taxleading to a situation under which the sandwich class ends up paying a salaries taxleading to a situation under which the sandwich class ends up paying a salaries taxleading to a situation under which the sandwich class ends up paying a salaries tax

which, year after year, has been consistently higher than the prevailing inflationwhich, year after year, has been consistently higher than the prevailing inflationwhich, year after year, has been consistently higher than the prevailing inflationwhich, year after year, has been consistently higher than the prevailing inflation

rates. Has the Government been fair to the sandwich class? I hope that the Financialrates. Has the Government been fair to the sandwich class? I hope that the Financialrates. Has the Government been fair to the sandwich class? I hope that the Financialrates. Has the Government been fair to the sandwich class? I hope that the Financial

Secretary will accede to the request of Members by further raising personal allowanceSecretary will accede to the request of Members by further raising personal allowanceSecretary will accede to the request of Members by further raising personal allowanceSecretary will accede to the request of Members by further raising personal allowance

and widening the tax band.and widening the tax band.and widening the tax band.and widening the tax band.

Mr Deputy President, several of my CRC colleagues have spokenMr Deputy President, several of my CRC colleagues have spokenMr Deputy President, several of my CRC colleagues have spokenMr Deputy President, several of my CRC colleagues have spoken on their concern on their concern on their concern on their concern

for the plight of the sandwich class so I will not go into that again. I will focusfor the plight of the sandwich class so I will not go into that again. I will focusfor the plight of the sandwich class so I will not go into that again. I will focusfor the plight of the sandwich class so I will not go into that again. I will focus

my comments on the Financial Secretary's principles of financial management.my comments on the Financial Secretary's principles of financial management.my comments on the Financial Secretary's principles of financial management.my comments on the Financial Secretary's principles of financial management.

The Financial Secretary has set out the estimated expenditure in great detThe Financial Secretary has set out the estimated expenditure in great detThe Financial Secretary has set out the estimated expenditure in great detThe Financial Secretary has set out the estimated expenditure in great detailailailail

and with clear explanation running into three volumes. A detailed account has beenand with clear explanation running into three volumes. A detailed account has beenand with clear explanation running into three volumes. A detailed account has beenand with clear explanation running into three volumes. A detailed account has been

given of the work objectives of each government department and their required fundinggiven of the work objectives of each government department and their required fundinggiven of the work objectives of each government department and their required fundinggiven of the work objectives of each government department and their required funding

in the coming year. I appreciate very much the effort made by the Financial Secretaryin the coming year. I appreciate very much the effort made by the Financial Secretaryin the coming year. I appreciate very much the effort made by the Financial Secretaryin the coming year. I appreciate very much the effort made by the Financial Secretary

in the preparation of such a comprehensive document for the public.in the preparation of such a comprehensive document for the public.in the preparation of such a comprehensive document for the public.in the preparation of such a comprehensive document for the public.

One drawback of the document, however, is that there is no review of theOne drawback of the document, however, is that there is no review of theOne drawback of the document, however, is that there is no review of theOne drawback of the document, however, is that there is no review of the

implementation of the Budget last year, nor indeed is there anything on the extentimplementation of the Budget last year, nor indeed is there anything on the extentimplementation of the Budget last year, nor indeed is there anything on the extentimplementation of the Budget last year, nor indeed is there anything on the extent

of deviation from the estimated expenditure. Commitments are made and objectivesof deviation from the estimated expenditure. Commitments are made and objectivesof deviation from the estimated expenditure. Commitments are made and objectivesof deviation from the estimated expenditure. Commitments are made and objectives

are set by officials at the start of each financial year, but have these commitmentsare set by officials at the start of each financial year, but have these commitmentsare set by officials at the start of each financial year, but have these commitmentsare set by officials at the start of each financial year, but have these commitments

and objectives been materialized? What are the causes of deviations, if they occur?and objectives been materialized? What are the causes of deviations, if they occur?and objectives been materialized? What are the causes of deviations, if they occur?and objectives been materialized? What are the causes of deviations, if they occur?

The heads of government departments should offer an explanation in the Budget. IThe heads of government departments should offer an explanation in the Budget. IThe heads of government departments should offer an explanation in the Budget. IThe heads of government departments should offer an explanation in the Budget. I

wish the Financial Secretary will give an answer to these questions in his next Budgetwish the Financial Secretary will give an answer to these questions in his next Budgetwish the Financial Secretary will give an answer to these questions in his next Budgetwish the Financial Secretary will give an answer to these questions in his next Budget

Speech.Speech.Speech.Speech.

Three principles of financial management have been given in paragraph 37 of theThree principles of financial management have been given in paragraph 37 of theThree principles of financial management have been given in paragraph 37 of theThree principles of financial management have been given in paragraph 37 of the

Budget Speech, namely, to ensure that public spending remains in line with economicBudget Speech, namely, to ensure that public spending remains in line with economicBudget Speech, namely, to ensure that public spending remains in line with economicBudget Speech, namely, to ensure that public spending remains in line with economic

growth; to raise sufficient revenue to cover spending commitments and to ensure thatgrowth; to raise sufficient revenue to cover spending commitments and to ensure thatgrowth; to raise sufficient revenue to cover spending commitments and to ensure thatgrowth; to raise sufficient revenue to cover spending commitments and to ensure that

at least half the costs of capital expenditure is financed by recurrent revenue; andat least half the costs of capital expenditure is financed by recurrent revenue; andat least half the costs of capital expenditure is financed by recurrent revenue; andat least half the costs of capital expenditure is financed by recurrent revenue; and

to maintain reserves at the level he judged adequate to provide a cushion againstto maintain reserves at the level he judged adequate to provide a cushion againstto maintain reserves at the level he judged adequate to provide a cushion againstto maintain reserves at the level he judged adequate to provide a cushion against

future uncertainties.future uncertainties.future uncertainties.future uncertainties.

I agree with the first principle, that public spending must remain in line withI agree with the first principle, that public spending must remain in line withI agree with the first principle, that public spending must remain in line withI agree with the first principle, that public spending must remain in line with

economic growth. However, the estimated expenditure for 1992-93 proposed in theeconomic growth. However, the estimated expenditure for 1992-93 proposed in theeconomic growth. However, the estimated expenditure for 1992-93 proposed in theeconomic growth. However, the estimated expenditure for 1992-93 proposed in the

Budget is 25.2% higher than that proposed for 1991-92. Real growth, allowing forBudget is 25.2% higher than that proposed for 1991-92. Real growth, allowing forBudget is 25.2% higher than that proposed for 1991-92. Real growth, allowing forBudget is 25.2% higher than that proposed for 1991-92. Real growth, allowing for

inflation, is about 15% which is still much higher than the real GDP growth rate ofinflation, is about 15% which is still much higher than the real GDP growth rate ofinflation, is about 15% which is still much higher than the real GDP growth rate ofinflation, is about 15% which is still much higher than the real GDP growth rate of

5%. Public expenditure is apparently expanding, compared to our economic growth rate.5%. Public expenditure is apparently expanding, compared to our economic growth rate.5%. Public expenditure is apparently expanding, compared to our economic growth rate.5%. Public expenditure is apparently expanding, compared to our economic growth rate.

Indeed, the ratio of public expenditure to GDP has risen from 14.6% in 1987-88 toIndeed, the ratio of public expenditure to GDP has risen from 14.6% in 1987-88 toIndeed, the ratio of public expenditure to GDP has risen from 14.6% in 1987-88 toIndeed, the ratio of public expenditure to GDP has risen from 14.6% in 1987-88 to

18.8% in 1992-93. The ratio will, according to the Financial Secretary, continue18.8% in 1992-93. The ratio will, according to the Financial Secretary, continue18.8% in 1992-93. The ratio will, according to the Financial Secretary, continue18.8% in 1992-93. The ratio will, according to the Financial Secretary, continue

to rise to 19.5%. I wish to point out here that if we include also the expenditureto rise to 19.5%. I wish to point out here that if we include also the expenditureto rise to 19.5%. I wish to point out here that if we include also the expenditureto rise to 19.5%. I wish to point out here that if we include also the expenditure

incurred by the Airport Authority and the Mass Transit Railway Corporation, publicincurred by the Airport Authority and the Mass Transit Railway Corporation, publicincurred by the Airport Authority and the Mass Transit Railway Corporation, publicincurred by the Airport Authority and the Mass Transit Railway Corporation, public

expenditure will account for far more than 20% of our GDP. In this regard, I thinkexpenditure will account for far more than 20% of our GDP. In this regard, I thinkexpenditure will account for far more than 20% of our GDP. In this regard, I thinkexpenditure will account for far more than 20% of our GDP. In this regard, I think

the Financial Secretary should have the determination to curb more effectively ourthe Financial Secretary should have the determination to curb more effectively ourthe Financial Secretary should have the determination to curb more effectively ourthe Financial Secretary should have the determination to curb more effectively our

public expenditure in keeping with the principle of aligning public expenditure withpublic expenditure in keeping with the principle of aligning public expenditure withpublic expenditure in keeping with the principle of aligning public expenditure withpublic expenditure in keeping with the principle of aligning public expenditure with

economic growth.economic growth.economic growth.economic growth.

The second point, that at least half the costs of capital expenditure is financedThe second point, that at least half the costs of capital expenditure is financedThe second point, that at least half the costs of capital expenditure is financedThe second point, that at least half the costs of capital expenditure is financed

by recurrent revenue, is a rather loose principle. "At least half" may be interpretedby recurrent revenue, is a rather loose principle. "At least half" may be interpretedby recurrent revenue, is a rather loose principle. "At least half" may be interpretedby recurrent revenue, is a rather loose principle. "At least half" may be interpreted

as anything between half and the total amount; that margin is too large for theas anything between half and the total amount; that margin is too large for theas anything between half and the total amount; that margin is too large for theas anything between half and the total amount; that margin is too large for the

principle to be taken seriously. The Budget states that over the next few years moreprinciple to be taken seriously. The Budget states that over the next few years moreprinciple to be taken seriously. The Budget states that over the next few years moreprinciple to be taken seriously. The Budget states that over the next few years more

than 70% of the non-recurrent expenditure will have to be met by recurrent revenue.than 70% of the non-recurrent expenditure will have to be met by recurrent revenue.than 70% of the non-recurrent expenditure will have to be met by recurrent revenue.than 70% of the non-recurrent expenditure will have to be met by recurrent revenue.

This is an indication that the future physical infrastructure projects will be mostlyThis is an indication that the future physical infrastructure projects will be mostlyThis is an indication that the future physical infrastructure projects will be mostlyThis is an indication that the future physical infrastructure projects will be mostly

paid for by taxpayers and the percentage is at any rate over half of the recurrentpaid for by taxpayers and the percentage is at any rate over half of the recurrentpaid for by taxpayers and the percentage is at any rate over half of the recurrentpaid for by taxpayers and the percentage is at any rate over half of the recurrent

revenue. Indeed, apart from recurrent revenue, capital expenditure may also be metrevenue. Indeed, apart from recurrent revenue, capital expenditure may also be metrevenue. Indeed, apart from recurrent revenue, capital expenditure may also be metrevenue. Indeed, apart from recurrent revenue, capital expenditure may also be met

by borrowing and our reserved fund. I suggest that a clear upper limit to theby borrowing and our reserved fund. I suggest that a clear upper limit to theby borrowing and our reserved fund. I suggest that a clear upper limit to theby borrowing and our reserved fund. I suggest that a clear upper limit to the

percentage of non-recurrent expenditure to be met by recurrent revenue should be setpercentage of non-recurrent expenditure to be met by recurrent revenue should be setpercentage of non-recurrent expenditure to be met by recurrent revenue should be setpercentage of non-recurrent expenditure to be met by recurrent revenue should be set

by the Financial Secretary so that the shortfall may be paid for by raising fundsby the Financial Secretary so that the shortfall may be paid for by raising fundsby the Financial Secretary so that the shortfall may be paid for by raising fundsby the Financial Secretary so that the shortfall may be paid for by raising funds

and our reserves. This will forestall the scenario of Hong Kong people having toand our reserves. This will forestall the scenario of Hong Kong people having toand our reserves. This will forestall the scenario of Hong Kong people having toand our reserves. This will forestall the scenario of Hong Kong people having to

bear an excessive tax burden on account of infrastructural development.bear an excessive tax burden on account of infrastructural development.bear an excessive tax burden on account of infrastructural development.bear an excessive tax burden on account of infrastructural development.

The Financial Secretary's third principle of financial management is thatThe Financial Secretary's third principle of financial management is thatThe Financial Secretary's third principle of financial management is thatThe Financial Secretary's third principle of financial management is that

reserves must be maintained at a level which he judges adequate. I basically agreereserves must be maintained at a level which he judges adequate. I basically agreereserves must be maintained at a level which he judges adequate. I basically agreereserves must be maintained at a level which he judges adequate. I basically agree

that we should put aside sufficient reserves, and I also agree that the reserves levelthat we should put aside sufficient reserves, and I also agree that the reserves levelthat we should put aside sufficient reserves, and I also agree that the reserves levelthat we should put aside sufficient reserves, and I also agree that the reserves level

over the next five years should be considered in terms of a mid-term forecast. Butover the next five years should be considered in terms of a mid-term forecast. Butover the next five years should be considered in terms of a mid-term forecast. Butover the next five years should be considered in terms of a mid-term forecast. But

the problem is at what level the reserves will then be considered sufficient. Thethe problem is at what level the reserves will then be considered sufficient. Thethe problem is at what level the reserves will then be considered sufficient. Thethe problem is at what level the reserves will then be considered sufficient. The

Financial Secretary should give an explanation regarding this point. The BudgetFinancial Secretary should give an explanation regarding this point. The BudgetFinancial Secretary should give an explanation regarding this point. The BudgetFinancial Secretary should give an explanation regarding this point. The Budget

projects a reserve of $71.6 billion by the end of March 1997, which is almost threeprojects a reserve of $71.6 billion by the end of March 1997, which is almost threeprojects a reserve of $71.6 billion by the end of March 1997, which is almost threeprojects a reserve of $71.6 billion by the end of March 1997, which is almost three

times the $25 billion prescribed by the Sino-British Memorandum of Understanding ontimes the $25 billion prescribed by the Sino-British Memorandum of Understanding ontimes the $25 billion prescribed by the Sino-British Memorandum of Understanding ontimes the $25 billion prescribed by the Sino-British Memorandum of Understanding on

the new airport project. Is that figure far more than sufficient? Is it justifiedthe new airport project. Is that figure far more than sufficient? Is it justifiedthe new airport project. Is that figure far more than sufficient? Is it justifiedthe new airport project. Is that figure far more than sufficient? Is it justified

for the Government to build our reserves up to such a high level through tax and ratesfor the Government to build our reserves up to such a high level through tax and ratesfor the Government to build our reserves up to such a high level through tax and ratesfor the Government to build our reserves up to such a high level through tax and rates

increases?increases?increases?increases?

I wish to say here that the mid-term forecasts in the pasI wish to say here that the mid-term forecasts in the pasI wish to say here that the mid-term forecasts in the pasI wish to say here that the mid-term forecasts in the past Budgets have very littlet Budgets have very littlet Budgets have very littlet Budgets have very little

credibility in that they seriously underestimated the accumulation of reserves. Thecredibility in that they seriously underestimated the accumulation of reserves. Thecredibility in that they seriously underestimated the accumulation of reserves. Thecredibility in that they seriously underestimated the accumulation of reserves. The

Budget of 1987 predicted a reserve of $36 billion by March, 1990, but it turned outBudget of 1987 predicted a reserve of $36 billion by March, 1990, but it turned outBudget of 1987 predicted a reserve of $36 billion by March, 1990, but it turned outBudget of 1987 predicted a reserve of $36 billion by March, 1990, but it turned out

to be $72.6 billion, more than double what was predicted. The Budget of 1988to be $72.6 billion, more than double what was predicted. The Budget of 1988to be $72.6 billion, more than double what was predicted. The Budget of 1988to be $72.6 billion, more than double what was predicted. The Budget of 1988

predicted a reserve of$50.9 billion by March 1992, but that figure has now been revisedpredicted a reserve of$50.9 billion by March 1992, but that figure has now been revisedpredicted a reserve of$50.9 billion by March 1992, but that figure has now been revisedpredicted a reserve of$50.9 billion by March 1992, but that figure has now been revised

by the Financial Secretary to $92.8 billion, which exceeds the original forecast byby the Financial Secretary to $92.8 billion, which exceeds the original forecast byby the Financial Secretary to $92.8 billion, which exceeds the original forecast byby the Financial Secretary to $92.8 billion, which exceeds the original forecast by

82%. If the past deviations are anything to go by, then the actual reserves by 199782%. If the past deviations are anything to go by, then the actual reserves by 199782%. If the past deviations are anything to go by, then the actual reserves by 199782%. If the past deviations are anything to go by, then the actual reserves by 1997

may reach a staggering $150 billion. According to the Parkinson Law, expendituremay reach a staggering $150 billion. According to the Parkinson Law, expendituremay reach a staggering $150 billion. According to the Parkinson Law, expendituremay reach a staggering $150 billion. According to the Parkinson Law, expenditure

will rise with revenue. I hope that the Financial Secretary will not raise taxeswill rise with revenue. I hope that the Financial Secretary will not raise taxeswill rise with revenue. I hope that the Financial Secretary will not raise taxeswill rise with revenue. I hope that the Financial Secretary will not raise taxes

because a sufficient level of reserves must be maintained, while allowing publicbecause a sufficient level of reserves must be maintained, while allowing publicbecause a sufficient level of reserves must be maintained, while allowing publicbecause a sufficient level of reserves must be maintained, while allowing public

expenditure to continue to expand on the ground that our reserves have been increased.expenditure to continue to expand on the ground that our reserves have been increased.expenditure to continue to expand on the ground that our reserves have been increased.expenditure to continue to expand on the ground that our reserves have been increased.

As to the control of the costs of the airport and related projects, the FinancialAs to the control of the costs of the airport and related projects, the FinancialAs to the control of the costs of the airport and related projects, the FinancialAs to the control of the costs of the airport and related projects, the Financial

Secretary has proposed some measures such as a "fixed price lump sum contract andSecretary has proposed some measures such as a "fixed price lump sum contract andSecretary has proposed some measures such as a "fixed price lump sum contract andSecretary has proposed some measures such as a "fixed price lump sum contract and

cash limited provision." But there is no mention in the Budget of how the design mightcash limited provision." But there is no mention in the Budget of how the design mightcash limited provision." But there is no mention in the Budget of how the design mightcash limited provision." But there is no mention in the Budget of how the design might

be controlled, what measures are in place to prevent the scale of the projects frombe controlled, what measures are in place to prevent the scale of the projects frombe controlled, what measures are in place to prevent the scale of the projects frombe controlled, what measures are in place to prevent the scale of the projects from

exceeding actual need, and how the stringent international standards are to beexceeding actual need, and how the stringent international standards are to beexceeding actual need, and how the stringent international standards are to beexceeding actual need, and how the stringent international standards are to be

observed in terms of tender selection. We are in fact not only concerned about theobserved in terms of tender selection. We are in fact not only concerned about theobserved in terms of tender selection. We are in fact not only concerned about theobserved in terms of tender selection. We are in fact not only concerned about the

amount of public funding going to the Airport Authority and the Mass Transit Railwayamount of public funding going to the Airport Authority and the Mass Transit Railwayamount of public funding going to the Airport Authority and the Mass Transit Railwayamount of public funding going to the Airport Authority and the Mass Transit Railway

Corporation (MTRC), but also about cost control over the overall Airport CoreCorporation (MTRC), but also about cost control over the overall Airport CoreCorporation (MTRC), but also about cost control over the overall Airport CoreCorporation (MTRC), but also about cost control over the overall Airport Core

Programme (ACP). For the public are not only asked to pay for the funding of theProgramme (ACP). For the public are not only asked to pay for the funding of theProgramme (ACP). For the public are not only asked to pay for the funding of theProgramme (ACP). For the public are not only asked to pay for the funding of the

Airport Authority and the MTRC, but they will eventually end up having to pay forAirport Authority and the MTRC, but they will eventually end up having to pay forAirport Authority and the MTRC, but they will eventually end up having to pay forAirport Authority and the MTRC, but they will eventually end up having to pay for

the total cost of construction works including interest, during the operational phase.the total cost of construction works including interest, during the operational phase.the total cost of construction works including interest, during the operational phase.the total cost of construction works including interest, during the operational phase.

I hope that the Financial Secretary will give a more specific account of effectiveI hope that the Financial Secretary will give a more specific account of effectiveI hope that the Financial Secretary will give a more specific account of effectiveI hope that the Financial Secretary will give a more specific account of effective

measures to control the costs of ACP projects.measures to control the costs of ACP projects.measures to control the costs of ACP projects.measures to control the costs of ACP projects.

Hong Kong will revert to Chinese sovereignty in five years. The Government hasHong Kong will revert to Chinese sovereignty in five years. The Government hasHong Kong will revert to Chinese sovereignty in five years. The Government hasHong Kong will revert to Chinese sovereignty in five years. The Government has

the financial responsibility of completing on time a new airport which is asthe financial responsibility of completing on time a new airport which is asthe financial responsibility of completing on time a new airport which is asthe financial responsibility of completing on time a new airport which is as

functional as it is cost-effective. And what must be left to the Specialfunctional as it is cost-effective. And what must be left to the Specialfunctional as it is cost-effective. And what must be left to the Specialfunctional as it is cost-effective. And what must be left to the Special

Administrative Region Government must be a healthy economy with low taxation. InAdministrative Region Government must be a healthy economy with low taxation. InAdministrative Region Government must be a healthy economy with low taxation. InAdministrative Region Government must be a healthy economy with low taxation. In

order for this to happen, the Financial Secretary must come up with a set of clearorder for this to happen, the Financial Secretary must come up with a set of clearorder for this to happen, the Financial Secretary must come up with a set of clearorder for this to happen, the Financial Secretary must come up with a set of clear

and practicable principles of financial management and at the same time, map out clearand practicable principles of financial management and at the same time, map out clearand practicable principles of financial management and at the same time, map out clearand practicable principles of financial management and at the same time, map out clear

fiscal policy directions. I am disappointed that the Financial Secretary hasfiscal policy directions. I am disappointed that the Financial Secretary hasfiscal policy directions. I am disappointed that the Financial Secretary hasfiscal policy directions. I am disappointed that the Financial Secretary has

apparently not been able to achieve this.apparently not been able to achieve this.apparently not been able to achieve this.apparently not been able to achieve this.

Mr Deputy President, although some of my CRC Mr Deputy President, although some of my CRC Mr Deputy President, although some of my CRC Mr Deputy President, although some of my CRC colleagues and myself are not happycolleagues and myself are not happycolleagues and myself are not happycolleagues and myself are not happy

with certain parts of the Budget and will exercise our right to vote against individualwith certain parts of the Budget and will exercise our right to vote against individualwith certain parts of the Budget and will exercise our right to vote against individualwith certain parts of the Budget and will exercise our right to vote against individual

tax proposals, but we will vote for the Appropriation Bill as a whole. I attendedtax proposals, but we will vote for the Appropriation Bill as a whole. I attendedtax proposals, but we will vote for the Appropriation Bill as a whole. I attendedtax proposals, but we will vote for the Appropriation Bill as a whole. I attended

a luncheon meeting of a certain organization today. Before giving my speech, I madea luncheon meeting of a certain organization today. Before giving my speech, I madea luncheon meeting of a certain organization today. Before giving my speech, I madea luncheon meeting of a certain organization today. Before giving my speech, I made

a point of asking members of that organization if they wanted me to vote down thea point of asking members of that organization if they wanted me to vote down thea point of asking members of that organization if they wanted me to vote down thea point of asking members of that organization if they wanted me to vote down the

Budget, but I found that none of them did. In that regard, I cannot cast a dissentingBudget, but I found that none of them did. In that regard, I cannot cast a dissentingBudget, but I found that none of them did. In that regard, I cannot cast a dissentingBudget, but I found that none of them did. In that regard, I cannot cast a dissenting

vote for political reason. Voting down an Appropriation Bill is a very serious matter;vote for political reason. Voting down an Appropriation Bill is a very serious matter;vote for political reason. Voting down an Appropriation Bill is a very serious matter;vote for political reason. Voting down an Appropriation Bill is a very serious matter;

it effectively means a vote of no confidence and demands a change of government. Takeit effectively means a vote of no confidence and demands a change of government. Takeit effectively means a vote of no confidence and demands a change of government. Takeit effectively means a vote of no confidence and demands a change of government. Take

the Basic Law as an example. If the Legislative Council refuses to pass the Budgetthe Basic Law as an example. If the Legislative Council refuses to pass the Budgetthe Basic Law as an example. If the Legislative Council refuses to pass the Budgetthe Basic Law as an example. If the Legislative Council refuses to pass the Budget

presented by the Government, then the Chief Executive will have to dissolve thepresented by the Government, then the Chief Executive will have to dissolve thepresented by the Government, then the Chief Executive will have to dissolve thepresented by the Government, then the Chief Executive will have to dissolve the

Legislative Council. It is as serious as that. If the Budget is vetoed, then theLegislative Council. It is as serious as that. If the Budget is vetoed, then theLegislative Council. It is as serious as that. If the Budget is vetoed, then theLegislative Council. It is as serious as that. If the Budget is vetoed, then the

operation of the Government will be partially paralysed, with serious socialoperation of the Government will be partially paralysed, with serious socialoperation of the Government will be partially paralysed, with serious socialoperation of the Government will be partially paralysed, with serious social

repercussions. More seriously still, overseas confidence in Hong Kong will berepercussions. More seriously still, overseas confidence in Hong Kong will berepercussions. More seriously still, overseas confidence in Hong Kong will berepercussions. More seriously still, overseas confidence in Hong Kong will be

seriously damaged as investors become hesitant. And Hong Kong will have difficultyseriously damaged as investors become hesitant. And Hong Kong will have difficultyseriously damaged as investors become hesitant. And Hong Kong will have difficultyseriously damaged as investors become hesitant. And Hong Kong will have difficulty

in raising funds for the new airport project. CRC Members, like any other Hong Kongin raising funds for the new airport project. CRC Members, like any other Hong Kongin raising funds for the new airport project. CRC Members, like any other Hong Kongin raising funds for the new airport project. CRC Members, like any other Hong Kong

person, are entirely devoted to Hong Kong. Our devotion constitutes a stabilizingperson, are entirely devoted to Hong Kong. Our devotion constitutes a stabilizingperson, are entirely devoted to Hong Kong. Our devotion constitutes a stabilizingperson, are entirely devoted to Hong Kong. Our devotion constitutes a stabilizing

force. We will use our veto power very discreetly and responsibly. We do not thinkforce. We will use our veto power very discreetly and responsibly. We do not thinkforce. We will use our veto power very discreetly and responsibly. We do not thinkforce. We will use our veto power very discreetly and responsibly. We do not think

that voting down the Appropriation Bill will bring any benefit to the stability andthat voting down the Appropriation Bill will bring any benefit to the stability andthat voting down the Appropriation Bill will bring any benefit to the stability andthat voting down the Appropriation Bill will bring any benefit to the stability and

prosperity of Hong Kong. Although I reserve my right to vote against individual taxprosperity of Hong Kong. Although I reserve my right to vote against individual taxprosperity of Hong Kong. Although I reserve my right to vote against individual taxprosperity of Hong Kong. Although I reserve my right to vote against individual tax

proposals, I hereby appeal to all Members to put aside political differences and,proposals, I hereby appeal to all Members to put aside political differences and,proposals, I hereby appeal to all Members to put aside political differences and,proposals, I hereby appeal to all Members to put aside political differences and,

in keeping with the spirit of co-operation and for the sake of the overall interestin keeping with the spirit of co-operation and for the sake of the overall interestin keeping with the spirit of co-operation and for the sake of the overall interestin keeping with the spirit of co-operation and for the sake of the overall interest

of Hong Kong, vote for the passage of the Appropriation Bill.of Hong Kong, vote for the passage of the Appropriation Bill.of Hong Kong, vote for the passage of the Appropriation Bill.of Hong Kong, vote for the passage of the Appropriation Bill.

MR HENRY TANG (in Cantonese): Mr Deputy President, first of all, I must thank my 44MR HENRY TANG (in Cantonese): Mr Deputy President, first of all, I must thank my 44MR HENRY TANG (in Cantonese): Mr Deputy President, first of all, I must thank my 44MR HENRY TANG (in Cantonese): Mr Deputy President, first of all, I must thank my 44

colleagues in this Council for signing their names in support of the joint lettercolleagues in this Council for signing their names in support of the joint lettercolleagues in this Council for signing their names in support of the joint lettercolleagues in this Council for signing their names in support of the joint letter

initiated by Mr LAU Chin-shek and myself, asking the Financial Secretary to reconsiderinitiated by Mr LAU Chin-shek and myself, asking the Financial Secretary to reconsiderinitiated by Mr LAU Chin-shek and myself, asking the Financial Secretary to reconsiderinitiated by Mr LAU Chin-shek and myself, asking the Financial Secretary to reconsider

and further increase salaries tax allowances and widen tax bands.and further increase salaries tax allowances and widen tax bands.and further increase salaries tax allowances and widen tax bands.and further increase salaries tax allowances and widen tax bands.

That letter says precisely what is on the minds of the majority of the Members,That letter says precisely what is on the minds of the majority of the Members,That letter says precisely what is on the minds of the majority of the Members,That letter says precisely what is on the minds of the majority of the Members,

that is, the Budget fails to take the interests of the middle and lower income groupsthat is, the Budget fails to take the interests of the middle and lower income groupsthat is, the Budget fails to take the interests of the middle and lower income groupsthat is, the Budget fails to take the interests of the middle and lower income groups

into consideration. This, we think, is why we have succeeded in such a short timeinto consideration. This, we think, is why we have succeeded in such a short timeinto consideration. This, we think, is why we have succeeded in such a short timeinto consideration. This, we think, is why we have succeeded in such a short time

in winning the support of so many colleagues by adding their signatures to it,in winning the support of so many colleagues by adding their signatures to it,in winning the support of so many colleagues by adding their signatures to it,in winning the support of so many colleagues by adding their signatures to it,

including the four who are also Members of the Executive Council. Today and yesterday,including the four who are also Members of the Executive Council. Today and yesterday,including the four who are also Members of the Executive Council. Today and yesterday,including the four who are also Members of the Executive Council. Today and yesterday,

I heard many colleagues, both signatories and non-signatories, reiterate theirI heard many colleagues, both signatories and non-signatories, reiterate theirI heard many colleagues, both signatories and non-signatories, reiterate theirI heard many colleagues, both signatories and non-signatories, reiterate their

concerns about the tax burden on the middle and lower income groups. I feel thatconcerns about the tax burden on the middle and lower income groups. I feel thatconcerns about the tax burden on the middle and lower income groups. I feel thatconcerns about the tax burden on the middle and lower income groups. I feel that

they did care and were not playing "political games" as alleged by some critics.they did care and were not playing "political games" as alleged by some critics.they did care and were not playing "political games" as alleged by some critics.they did care and were not playing "political games" as alleged by some critics.

After the signatures were collected, the Governor asked MembAfter the signatures were collected, the Governor asked MembAfter the signatures were collected, the Governor asked MembAfter the signatures were collected, the Governor asked Members of the Executiveers of the Executiveers of the Executiveers of the Executive

Council to refrain from openly criticizing the Budget. I think that this only exposedCouncil to refrain from openly criticizing the Budget. I think that this only exposedCouncil to refrain from openly criticizing the Budget. I think that this only exposedCouncil to refrain from openly criticizing the Budget. I think that this only exposed

his conservative attitude of not accepting public opinion. It is no more than anhis conservative attitude of not accepting public opinion. It is no more than anhis conservative attitude of not accepting public opinion. It is no more than anhis conservative attitude of not accepting public opinion. It is no more than an

ostrich policy. The pity is that the Governor this time treated everybody alike byostrich policy. The pity is that the Governor this time treated everybody alike byostrich policy. The pity is that the Governor this time treated everybody alike byostrich policy. The pity is that the Governor this time treated everybody alike by

rejecting the different motions for amendment moved by the United Democrats of Hongrejecting the different motions for amendment moved by the United Democrats of Hongrejecting the different motions for amendment moved by the United Democrats of Hongrejecting the different motions for amendment moved by the United Democrats of Hong

Kong, Meeting Point as well as the Co-operative Resources Centre (CRC).Kong, Meeting Point as well as the Co-operative Resources Centre (CRC).Kong, Meeting Point as well as the Co-operative Resources Centre (CRC).Kong, Meeting Point as well as the Co-operative Resources Centre (CRC).

I have yet one personal reason for teeming up with Mr LAU Chin-shek. I want toI have yet one personal reason for teeming up with Mr LAU Chin-shek. I want toI have yet one personal reason for teeming up with Mr LAU Chin-shek. I want toI have yet one personal reason for teeming up with Mr LAU Chin-shek. I want to

send a signal to the public that, though the management side and the staff side oftensend a signal to the public that, though the management side and the staff side oftensend a signal to the public that, though the management side and the staff side oftensend a signal to the public that, though the management side and the staff side often

quarrel over matters involving their different interests, the relations between themquarrel over matters involving their different interests, the relations between themquarrel over matters involving their different interests, the relations between themquarrel over matters involving their different interests, the relations between them

have in fact always been good. This is the pre-condition for Hong Kong's success,have in fact always been good. This is the pre-condition for Hong Kong's success,have in fact always been good. This is the pre-condition for Hong Kong's success,have in fact always been good. This is the pre-condition for Hong Kong's success,

and I hope that this cordial relationship will be sustained.and I hope that this cordial relationship will be sustained.and I hope that this cordial relationship will be sustained.and I hope that this cordial relationship will be sustained.

As to the Budget, I am not happy with some of the proposals of the AppropriationAs to the Budget, I am not happy with some of the proposals of the AppropriationAs to the Budget, I am not happy with some of the proposals of the AppropriationAs to the Budget, I am not happy with some of the proposals of the Appropriation

Bill. Yet, neither I nor the CRC has ever asked the Financial Secretary to reviseBill. Yet, neither I nor the CRC has ever asked the Financial Secretary to reviseBill. Yet, neither I nor the CRC has ever asked the Financial Secretary to reviseBill. Yet, neither I nor the CRC has ever asked the Financial Secretary to revise

those proposals. Our stance has always been clearly defined.those proposals. Our stance has always been clearly defined.those proposals. Our stance has always been clearly defined.those proposals. Our stance has always been clearly defined.

Regrettably, some recent press reports have implied or pointed an accusing fingerRegrettably, some recent press reports have implied or pointed an accusing fingerRegrettably, some recent press reports have implied or pointed an accusing fingerRegrettably, some recent press reports have implied or pointed an accusing finger

at us by stating that, in supporting the Budget, we "failed to hold fast to our originalat us by stating that, in supporting the Budget, we "failed to hold fast to our originalat us by stating that, in supporting the Budget, we "failed to hold fast to our originalat us by stating that, in supporting the Budget, we "failed to hold fast to our original

position" or that we had "backpedaled." I think that these are not fair criticisms.position" or that we had "backpedaled." I think that these are not fair criticisms.position" or that we had "backpedaled." I think that these are not fair criticisms.position" or that we had "backpedaled." I think that these are not fair criticisms.

I am therefore prepared to elucidate here yet once more what is meant by "Budget."I am therefore prepared to elucidate here yet once more what is meant by "Budget."I am therefore prepared to elucidate here yet once more what is meant by "Budget."I am therefore prepared to elucidate here yet once more what is meant by "Budget."

The Budget is composed of two parts: "expenditure" and "revenue." TheThe Budget is composed of two parts: "expenditure" and "revenue." TheThe Budget is composed of two parts: "expenditure" and "revenue." TheThe Budget is composed of two parts: "expenditure" and "revenue." The

"expenditure" part is dealt with by the Appropriation Bill which has to do with"expenditure" part is dealt with by the Appropriation Bill which has to do with"expenditure" part is dealt with by the Appropriation Bill which has to do with"expenditure" part is dealt with by the Appropriation Bill which has to do with

spending by all government departments. That Bill will be presented to thespending by all government departments. That Bill will be presented to thespending by all government departments. That Bill will be presented to thespending by all government departments. That Bill will be presented to the

Legislative Council next Wednesday for its second and third readings.Legislative Council next Wednesday for its second and third readings.Legislative Council next Wednesday for its second and third readings.Legislative Council next Wednesday for its second and third readings.

I will support the Bill.I will support the Bill.I will support the Bill.I will support the Bill.

But this does not mean that I fully support the Budget in its entirBut this does not mean that I fully support the Budget in its entirBut this does not mean that I fully support the Budget in its entirBut this does not mean that I fully support the Budget in its entirety. I amety. I amety. I amety. I am

asking the Government to revise the "revenue" part which is to be presented in aasking the Government to revise the "revenue" part which is to be presented in aasking the Government to revise the "revenue" part which is to be presented in aasking the Government to revise the "revenue" part which is to be presented in a

"piece-meal" fashion. This part is covered by the Dutiable commodities (Amendment)"piece-meal" fashion. This part is covered by the Dutiable commodities (Amendment)"piece-meal" fashion. This part is covered by the Dutiable commodities (Amendment)"piece-meal" fashion. This part is covered by the Dutiable commodities (Amendment)

Bill 1992, the Inland Revenue (Amendment) (No. 3) Bill 1992, the Stamp Duty (Amendment)Bill 1992, the Inland Revenue (Amendment) (No. 3) Bill 1992, the Stamp Duty (Amendment)Bill 1992, the Inland Revenue (Amendment) (No. 3) Bill 1992, the Stamp Duty (Amendment)Bill 1992, the Inland Revenue (Amendment) (No. 3) Bill 1992, the Stamp Duty (Amendment)

(No. 4) Bill 1992 and the Entertainments Tax (Amendment) Bill 1992. Starting from(No. 4) Bill 1992 and the Entertainments Tax (Amendment) Bill 1992. Starting from(No. 4) Bill 1992 and the Entertainments Tax (Amendment) Bill 1992. Starting from(No. 4) Bill 1992 and the Entertainments Tax (Amendment) Bill 1992. Starting from

8 April, these bills will be presented successively to the Legislative Council for8 April, these bills will be presented successively to the Legislative Council for8 April, these bills will be presented successively to the Legislative Council for8 April, these bills will be presented successively to the Legislative Council for

their first reading. I hope that we will not mix up bills with revenue proposalstheir first reading. I hope that we will not mix up bills with revenue proposalstheir first reading. I hope that we will not mix up bills with revenue proposalstheir first reading. I hope that we will not mix up bills with revenue proposals

with those with expenditure proposals. They are functionally two different typeswith those with expenditure proposals. They are functionally two different typeswith those with expenditure proposals. They are functionally two different typeswith those with expenditure proposals. They are functionally two different types

of bills.of bills.of bills.of bills.

The Financial Secretary has repeatedly said that the Budget must be treated asThe Financial Secretary has repeatedly said that the Budget must be treated asThe Financial Secretary has repeatedly said that the Budget must be treated asThe Financial Secretary has repeatedly said that the Budget must be treated as

a package which cannot be separately revised. Still, I hope that he will heed thea package which cannot be separately revised. Still, I hope that he will heed thea package which cannot be separately revised. Still, I hope that he will heed thea package which cannot be separately revised. Still, I hope that he will heed the

opinions of the joint signatories and wisely take the initiative to accept a reductionopinions of the joint signatories and wisely take the initiative to accept a reductionopinions of the joint signatories and wisely take the initiative to accept a reductionopinions of the joint signatories and wisely take the initiative to accept a reduction

of the tax burden for the middle and lower income groups. This will avert aof the tax burden for the middle and lower income groups. This will avert aof the tax burden for the middle and lower income groups. This will avert aof the tax burden for the middle and lower income groups. This will avert a

confrontation between this Council and the Administration and show the Government'sconfrontation between this Council and the Administration and show the Government'sconfrontation between this Council and the Administration and show the Government'sconfrontation between this Council and the Administration and show the Government's

open attitude and democratic spirit to the general public.open attitude and democratic spirit to the general public.open attitude and democratic spirit to the general public.open attitude and democratic spirit to the general public.

Generally speaking, the present Budget is not too bad. At least, credit whereGenerally speaking, the present Budget is not too bad. At least, credit whereGenerally speaking, the present Budget is not too bad. At least, credit whereGenerally speaking, the present Budget is not too bad. At least, credit where

credit's due, it is exhilarating to note that a substantial surplus of $14.1 billioncredit's due, it is exhilarating to note that a substantial surplus of $14.1 billioncredit's due, it is exhilarating to note that a substantial surplus of $14.1 billioncredit's due, it is exhilarating to note that a substantial surplus of $14.1 billion

has been achieved in the last financial year and the present Budget lays down a planhas been achieved in the last financial year and the present Budget lays down a planhas been achieved in the last financial year and the present Budget lays down a planhas been achieved in the last financial year and the present Budget lays down a plan

for accumulating a $71.6 billion reserve by 1997. It is nothing wrong for pursuingfor accumulating a $71.6 billion reserve by 1997. It is nothing wrong for pursuingfor accumulating a $71.6 billion reserve by 1997. It is nothing wrong for pursuingfor accumulating a $71.6 billion reserve by 1997. It is nothing wrong for pursuing

the goal of smooth transition by saving against a rainy day and store up grain againstthe goal of smooth transition by saving against a rainy day and store up grain againstthe goal of smooth transition by saving against a rainy day and store up grain againstthe goal of smooth transition by saving against a rainy day and store up grain against

famine.famine.famine.famine.

However, while the surplus, wHowever, while the surplus, wHowever, while the surplus, wHowever, while the surplus, which is the envy of other countries, is derived fromhich is the envy of other countries, is derived fromhich is the envy of other countries, is derived fromhich is the envy of other countries, is derived from

the people, the Government just fails to realize that "what is obtained from the peoplethe people, the Government just fails to realize that "what is obtained from the peoplethe people, the Government just fails to realize that "what is obtained from the peoplethe people, the Government just fails to realize that "what is obtained from the people

should be spent on the people." As a result, even when the economy is booming, theshould be spent on the people." As a result, even when the economy is booming, theshould be spent on the people." As a result, even when the economy is booming, theshould be spent on the people." As a result, even when the economy is booming, the

public cannot enjoy a fair share of the prosperity. This really does not make sense.public cannot enjoy a fair share of the prosperity. This really does not make sense.public cannot enjoy a fair share of the prosperity. This really does not make sense.public cannot enjoy a fair share of the prosperity. This really does not make sense.

It is regretted to see such an over-prudent and conservative fiscal philosophy, thoughIt is regretted to see such an over-prudent and conservative fiscal philosophy, thoughIt is regretted to see such an over-prudent and conservative fiscal philosophy, thoughIt is regretted to see such an over-prudent and conservative fiscal philosophy, though

so good at tapping new revenue sources and cutting expenditure, fails to put resourcesso good at tapping new revenue sources and cutting expenditure, fails to put resourcesso good at tapping new revenue sources and cutting expenditure, fails to put resourcesso good at tapping new revenue sources and cutting expenditure, fails to put resources

to good use.to good use.to good use.to good use.

Trained manTrained manTrained manTrained manpower has always been Hong Kong's only resource. Trained manpowerpower has always been Hong Kong's only resource. Trained manpowerpower has always been Hong Kong's only resource. Trained manpowerpower has always been Hong Kong's only resource. Trained manpower

can be obtained only under a sound education system. I am a member of the Universitycan be obtained only under a sound education system. I am a member of the Universitycan be obtained only under a sound education system. I am a member of the Universitycan be obtained only under a sound education system. I am a member of the University

and Polytechnic Grant Committee. I always support the Government's effort to stepand Polytechnic Grant Committee. I always support the Government's effort to stepand Polytechnic Grant Committee. I always support the Government's effort to stepand Polytechnic Grant Committee. I always support the Government's effort to step

up the expansion of post-secondary education in keeping with the transformation ofup the expansion of post-secondary education in keeping with the transformation ofup the expansion of post-secondary education in keeping with the transformation ofup the expansion of post-secondary education in keeping with the transformation of

our socio-economic structure.our socio-economic structure.our socio-economic structure.our socio-economic structure.

However, we have to ensure a well-balanced education development. ActiveHowever, we have to ensure a well-balanced education development. ActiveHowever, we have to ensure a well-balanced education development. ActiveHowever, we have to ensure a well-balanced education development. Active

expansion of tertiary education does not mean that we can afford to ignore the needexpansion of tertiary education does not mean that we can afford to ignore the needexpansion of tertiary education does not mean that we can afford to ignore the needexpansion of tertiary education does not mean that we can afford to ignore the need

to improve the quality of basic education. In fact, the University and Polytechnicto improve the quality of basic education. In fact, the University and Polytechnicto improve the quality of basic education. In fact, the University and Polytechnicto improve the quality of basic education. In fact, the University and Polytechnic

Grant Committee has all along been paying close attention to the problem of ourGrant Committee has all along been paying close attention to the problem of ourGrant Committee has all along been paying close attention to the problem of ourGrant Committee has all along been paying close attention to the problem of our

students' declining academic quality. Particularly noteworthy is the fact that, instudents' declining academic quality. Particularly noteworthy is the fact that, instudents' declining academic quality. Particularly noteworthy is the fact that, instudents' declining academic quality. Particularly noteworthy is the fact that, in

1994, 84% of all Form VII students will be provided with places in bachelor degree1994, 84% of all Form VII students will be provided with places in bachelor degree1994, 84% of all Form VII students will be provided with places in bachelor degree1994, 84% of all Form VII students will be provided with places in bachelor degree

courses. What will the quality of students be like at that time? The key tocourses. What will the quality of students be like at that time? The key tocourses. What will the quality of students be like at that time? The key tocourses. What will the quality of students be like at that time? The key to

answering this question of course lies in the laying of solid foundations at primaryanswering this question of course lies in the laying of solid foundations at primaryanswering this question of course lies in the laying of solid foundations at primaryanswering this question of course lies in the laying of solid foundations at primary

and secondary levels.and secondary levels.and secondary levels.and secondary levels.

However, after taking inflation into consideration, the funding for basicHowever, after taking inflation into consideration, the funding for basicHowever, after taking inflation into consideration, the funding for basicHowever, after taking inflation into consideration, the funding for basic

education will record negative growth. To save money, the Government has plan toeducation will record negative growth. To save money, the Government has plan toeducation will record negative growth. To save money, the Government has plan toeducation will record negative growth. To save money, the Government has plan to

add two school places to each secondary school class. This measure, which deviatesadd two school places to each secondary school class. This measure, which deviatesadd two school places to each secondary school class. This measure, which deviatesadd two school places to each secondary school class. This measure, which deviates

from the principle of raising the quality of basic education, would certainly dampenfrom the principle of raising the quality of basic education, would certainly dampenfrom the principle of raising the quality of basic education, would certainly dampenfrom the principle of raising the quality of basic education, would certainly dampen

the teaching profession's morale.the teaching profession's morale.the teaching profession's morale.the teaching profession's morale.

Yesterday, I heard the announcement that, at the Form IV level, the number ofYesterday, I heard the announcement that, at the Form IV level, the number ofYesterday, I heard the announcement that, at the Form IV level, the number ofYesterday, I heard the announcement that, at the Form IV level, the number of

classes need not be cut and the size of each class need not be increased. This isclasses need not be cut and the size of each class need not be increased. This isclasses need not be cut and the size of each class need not be increased. This isclasses need not be cut and the size of each class need not be increased. This is

a good change. I hope that the Education and Manpower Branch will continue to worka good change. I hope that the Education and Manpower Branch will continue to worka good change. I hope that the Education and Manpower Branch will continue to worka good change. I hope that the Education and Manpower Branch will continue to work

with the Financial Secretary to increase funding for secondary and primary education.with the Financial Secretary to increase funding for secondary and primary education.with the Financial Secretary to increase funding for secondary and primary education.with the Financial Secretary to increase funding for secondary and primary education.

I also wish to propose that the Government give consideration to lettinI also wish to propose that the Government give consideration to lettinI also wish to propose that the Government give consideration to lettinI also wish to propose that the Government give consideration to letting theg theg theg the

Education Department from now on make discretionary use of all the resources thatEducation Department from now on make discretionary use of all the resources thatEducation Department from now on make discretionary use of all the resources thatEducation Department from now on make discretionary use of all the resources that

are saved from education spending, without having to turn them over to the Centralare saved from education spending, without having to turn them over to the Centralare saved from education spending, without having to turn them over to the Centralare saved from education spending, without having to turn them over to the Central

Government so that the resources may flexibly be used to make up for inadequaciesGovernment so that the resources may flexibly be used to make up for inadequaciesGovernment so that the resources may flexibly be used to make up for inadequaciesGovernment so that the resources may flexibly be used to make up for inadequacies

of education where they are found, in the same way that resources are allocated toof education where they are found, in the same way that resources are allocated toof education where they are found, in the same way that resources are allocated toof education where they are found, in the same way that resources are allocated to

the universities and the polytechnics. I hope that the Government will give seriousthe universities and the polytechnics. I hope that the Government will give seriousthe universities and the polytechnics. I hope that the Government will give seriousthe universities and the polytechnics. I hope that the Government will give serious

consideration to this idea.consideration to this idea.consideration to this idea.consideration to this idea.

Besides education, industrial development is also a source ofBesides education, industrial development is also a source ofBesides education, industrial development is also a source ofBesides education, industrial development is also a source of wealth creation. wealth creation. wealth creation. wealth creation.

Despite the fact that Hong Kong's economic structure is undergoing transformation,Despite the fact that Hong Kong's economic structure is undergoing transformation,Despite the fact that Hong Kong's economic structure is undergoing transformation,Despite the fact that Hong Kong's economic structure is undergoing transformation,

I still think that we should not rely too much on the service industry. Hong KongI still think that we should not rely too much on the service industry. Hong KongI still think that we should not rely too much on the service industry. Hong KongI still think that we should not rely too much on the service industry. Hong Kong

still cannot afford to slacken in its efforts to develop its manufacturing industrystill cannot afford to slacken in its efforts to develop its manufacturing industrystill cannot afford to slacken in its efforts to develop its manufacturing industrystill cannot afford to slacken in its efforts to develop its manufacturing industry

and to strive for diversification. Our high-tech industries must break fresh groundand to strive for diversification. Our high-tech industries must break fresh groundand to strive for diversification. Our high-tech industries must break fresh groundand to strive for diversification. Our high-tech industries must break fresh ground

in order to catch up with the other three "little dragons". Failing this, I am afraidin order to catch up with the other three "little dragons". Failing this, I am afraidin order to catch up with the other three "little dragons". Failing this, I am afraidin order to catch up with the other three "little dragons". Failing this, I am afraid

we will be eliminated sooner or later.we will be eliminated sooner or later.we will be eliminated sooner or later.we will be eliminated sooner or later.

The Government has said time aThe Government has said time aThe Government has said time aThe Government has said time and again that it attaches great importance tond again that it attaches great importance tond again that it attaches great importance tond again that it attaches great importance to

high-tech development. It has set up an Industry and Technology Development Councilhigh-tech development. It has set up an Industry and Technology Development Councilhigh-tech development. It has set up an Industry and Technology Development Councilhigh-tech development. It has set up an Industry and Technology Development Council

and allocated $200 million to the Council to finance a research and developmentand allocated $200 million to the Council to finance a research and developmentand allocated $200 million to the Council to finance a research and developmentand allocated $200 million to the Council to finance a research and development

project of four or five years. Two hundred million dollars in funding sounds a lot.project of four or five years. Two hundred million dollars in funding sounds a lot.project of four or five years. Two hundred million dollars in funding sounds a lot.project of four or five years. Two hundred million dollars in funding sounds a lot.

In fact, however, it amounts to only 0.0007% of our gross domestic product (GDP).In fact, however, it amounts to only 0.0007% of our gross domestic product (GDP).In fact, however, it amounts to only 0.0007% of our gross domestic product (GDP).In fact, however, it amounts to only 0.0007% of our gross domestic product (GDP).

Compared with the average 2% in the other three "little dragons", our figure is simplyCompared with the average 2% in the other three "little dragons", our figure is simplyCompared with the average 2% in the other three "little dragons", our figure is simplyCompared with the average 2% in the other three "little dragons", our figure is simply

peanuts. It is certainly inadequate. Still, it is better than nothing and is a goodpeanuts. It is certainly inadequate. Still, it is better than nothing and is a goodpeanuts. It is certainly inadequate. Still, it is better than nothing and is a goodpeanuts. It is certainly inadequate. Still, it is better than nothing and is a good

beginning.beginning.beginning.beginning.

The Government is not doing too badly in funding trade development and in engagingThe Government is not doing too badly in funding trade development and in engagingThe Government is not doing too badly in funding trade development and in engagingThe Government is not doing too badly in funding trade development and in engaging

lobbyists to hold out foreign protectionist forces. But of course there is room forlobbyists to hold out foreign protectionist forces. But of course there is room forlobbyists to hold out foreign protectionist forces. But of course there is room forlobbyists to hold out foreign protectionist forces. But of course there is room for

improvement.improvement.improvement.improvement.

For instance, in thFor instance, in thFor instance, in thFor instance, in the Uruguay round of the General Agreement on Tariffs and Tradee Uruguay round of the General Agreement on Tariffs and Tradee Uruguay round of the General Agreement on Tariffs and Tradee Uruguay round of the General Agreement on Tariffs and Trade

(GATT) talks, it is proposed that Hong Kong's global textile and garment quotas should(GATT) talks, it is proposed that Hong Kong's global textile and garment quotas should(GATT) talks, it is proposed that Hong Kong's global textile and garment quotas should(GATT) talks, it is proposed that Hong Kong's global textile and garment quotas should

be phased out in ten years. It is not a realistic proposal. I would like to urgebe phased out in ten years. It is not a realistic proposal. I would like to urgebe phased out in ten years. It is not a realistic proposal. I would like to urgebe phased out in ten years. It is not a realistic proposal. I would like to urge

the Government to continue its aggressive lobbying effort to obtain better bargainingthe Government to continue its aggressive lobbying effort to obtain better bargainingthe Government to continue its aggressive lobbying effort to obtain better bargainingthe Government to continue its aggressive lobbying effort to obtain better bargaining

chips for Hong Kong's industry, commerce and trade.chips for Hong Kong's industry, commerce and trade.chips for Hong Kong's industry, commerce and trade.chips for Hong Kong's industry, commerce and trade.

The present Budget looks solid and well-balanced and appears on the surface toThe present Budget looks solid and well-balanced and appears on the surface toThe present Budget looks solid and well-balanced and appears on the surface toThe present Budget looks solid and well-balanced and appears on the surface to

be quite good, as it provides for increases and decreases of taxes. However, thebe quite good, as it provides for increases and decreases of taxes. However, thebe quite good, as it provides for increases and decreases of taxes. However, thebe quite good, as it provides for increases and decreases of taxes. However, the

increases are real while the decreases are merely symbolic. I feel that the Budgetincreases are real while the decreases are merely symbolic. I feel that the Budgetincreases are real while the decreases are merely symbolic. I feel that the Budgetincreases are real while the decreases are merely symbolic. I feel that the Budget

robs the rich but does not pay the people.robs the rich but does not pay the people.robs the rich but does not pay the people.robs the rich but does not pay the people.

Whom will the Budget benefit the most? As Mr Ronald ARCULLI has said just now,Whom will the Budget benefit the most? As Mr Ronald ARCULLI has said just now,Whom will the Budget benefit the most? As Mr Ronald ARCULLI has said just now,Whom will the Budget benefit the most? As Mr Ronald ARCULLI has said just now,

the best thing one should do is to buy some stocks in the the stock market in thethe best thing one should do is to buy some stocks in the the stock market in thethe best thing one should do is to buy some stocks in the the stock market in thethe best thing one should do is to buy some stocks in the the stock market in the

morning and then in the afternoon take a franchised bus (not a taxi) to go to a cinemamorning and then in the afternoon take a franchised bus (not a taxi) to go to a cinemamorning and then in the afternoon take a franchised bus (not a taxi) to go to a cinemamorning and then in the afternoon take a franchised bus (not a taxi) to go to a cinema

where one may consume a few bottles of soft drink.where one may consume a few bottles of soft drink.where one may consume a few bottles of soft drink.where one may consume a few bottles of soft drink.

Yesterday and today, much has been talked about the tax burdYesterday and today, much has been talked about the tax burdYesterday and today, much has been talked about the tax burdYesterday and today, much has been talked about the tax burden on the "sandwichen on the "sandwichen on the "sandwichen on the "sandwich

class" by my colleagues from the CRC and I am not going to repeat their views here.class" by my colleagues from the CRC and I am not going to repeat their views here.class" by my colleagues from the CRC and I am not going to repeat their views here.class" by my colleagues from the CRC and I am not going to repeat their views here.

Still, how much will the Government lose if the tax band is widened to $30,000?Still, how much will the Government lose if the tax band is widened to $30,000?Still, how much will the Government lose if the tax band is widened to $30,000?Still, how much will the Government lose if the tax band is widened to $30,000?

It will lose $2.7 billion next year. That seems to be a lot. However, if theIt will lose $2.7 billion next year. That seems to be a lot. However, if theIt will lose $2.7 billion next year. That seems to be a lot. However, if theIt will lose $2.7 billion next year. That seems to be a lot. However, if the

Government agrees to sell the site upon which the Colvin House now stands next year,Government agrees to sell the site upon which the Colvin House now stands next year,Government agrees to sell the site upon which the Colvin House now stands next year,Government agrees to sell the site upon which the Colvin House now stands next year,

the proceeds from the sale will be sufficient to offset over a number of years itsthe proceeds from the sale will be sufficient to offset over a number of years itsthe proceeds from the sale will be sufficient to offset over a number of years itsthe proceeds from the sale will be sufficient to offset over a number of years its

revenue losses due to the widening of the tax band.revenue losses due to the widening of the tax band.revenue losses due to the widening of the tax band.revenue losses due to the widening of the tax band.

Finally, I must say thatFinally, I must say thatFinally, I must say thatFinally, I must say that, although I am not strongly opposed to the increase of, although I am not strongly opposed to the increase of, although I am not strongly opposed to the increase of, although I am not strongly opposed to the increase of

1% in profits tax rate, this does not mean that I am in favour of the profits tax1% in profits tax rate, this does not mean that I am in favour of the profits tax1% in profits tax rate, this does not mean that I am in favour of the profits tax1% in profits tax rate, this does not mean that I am in favour of the profits tax

increase.increase.increase.increase.

If the Government were operating in the red, I believe that business people wouldIf the Government were operating in the red, I believe that business people wouldIf the Government were operating in the red, I believe that business people wouldIf the Government were operating in the red, I believe that business people would

not mind making a greater contribution. However, now the tax increase is introducednot mind making a greater contribution. However, now the tax increase is introducednot mind making a greater contribution. However, now the tax increase is introducednot mind making a greater contribution. However, now the tax increase is introduced

despite a huge $14.1 billion surplus and one wonders if the tax increase is necessary.despite a huge $14.1 billion surplus and one wonders if the tax increase is necessary.despite a huge $14.1 billion surplus and one wonders if the tax increase is necessary.despite a huge $14.1 billion surplus and one wonders if the tax increase is necessary.

Generally speaking, tax increase is necessary when there is a need to do so.Generally speaking, tax increase is necessary when there is a need to do so.Generally speaking, tax increase is necessary when there is a need to do so.Generally speaking, tax increase is necessary when there is a need to do so.

Increasing tax just because we can afford an increase is not consistent with generalIncreasing tax just because we can afford an increase is not consistent with generalIncreasing tax just because we can afford an increase is not consistent with generalIncreasing tax just because we can afford an increase is not consistent with general

taxation principles. If tax is to be increased in good times, does it mean that onetaxation principles. If tax is to be increased in good times, does it mean that onetaxation principles. If tax is to be increased in good times, does it mean that onetaxation principles. If tax is to be increased in good times, does it mean that one

must prepare for an increase in a frenzied manner when our economy runs intomust prepare for an increase in a frenzied manner when our economy runs intomust prepare for an increase in a frenzied manner when our economy runs intomust prepare for an increase in a frenzied manner when our economy runs into

difficulties?difficulties?difficulties?difficulties?

The tax rate in Hong KThe tax rate in Hong KThe tax rate in Hong KThe tax rate in Hong Kong has always been stable and simple. Varying it all theong has always been stable and simple. Varying it all theong has always been stable and simple. Varying it all theong has always been stable and simple. Varying it all the

time will do more harm than good to the overall environment for investment. I wishtime will do more harm than good to the overall environment for investment. I wishtime will do more harm than good to the overall environment for investment. I wishtime will do more harm than good to the overall environment for investment. I wish

to appeal to the Financial Secretary to think carefully before further increasingto appeal to the Financial Secretary to think carefully before further increasingto appeal to the Financial Secretary to think carefully before further increasingto appeal to the Financial Secretary to think carefully before further increasing

tax or introducing a new tax.tax or introducing a new tax.tax or introducing a new tax.tax or introducing a new tax.

Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.

MR TIK CHI-YUEN (in Cantonese): Mr Deputy President, I once again thank the FinancialMR TIK CHI-YUEN (in Cantonese): Mr Deputy President, I once again thank the FinancialMR TIK CHI-YUEN (in Cantonese): Mr Deputy President, I once again thank the FinancialMR TIK CHI-YUEN (in Cantonese): Mr Deputy President, I once again thank the Financial

Secretary for staying to listen to Members' speeches.Secretary for staying to listen to Members' speeches.Secretary for staying to listen to Members' speeches.Secretary for staying to listen to Members' speeches.

From between the lines of the 1992/93 budget, I sense that the FinanFrom between the lines of the 1992/93 budget, I sense that the FinanFrom between the lines of the 1992/93 budget, I sense that the FinanFrom between the lines of the 1992/93 budget, I sense that the Financial Secretarycial Secretarycial Secretarycial Secretary

tried to please all parties. In the concluding part of the Budget, he declared thattried to please all parties. In the concluding part of the Budget, he declared thattried to please all parties. In the concluding part of the Budget, he declared thattried to please all parties. In the concluding part of the Budget, he declared that

there is a real increase in social services spending and that he will continue histhere is a real increase in social services spending and that he will continue histhere is a real increase in social services spending and that he will continue histhere is a real increase in social services spending and that he will continue his

effort to help the general public. He made this point with the directly electedeffort to help the general public. He made this point with the directly electedeffort to help the general public. He made this point with the directly electedeffort to help the general public. He made this point with the directly elected

Members in mind. Next, to the business circles, he reassured them that there willMembers in mind. Next, to the business circles, he reassured them that there willMembers in mind. Next, to the business circles, he reassured them that there willMembers in mind. Next, to the business circles, he reassured them that there will

be no radical change of the present financial policy or tax system. Then, to thebe no radical change of the present financial policy or tax system. Then, to thebe no radical change of the present financial policy or tax system. Then, to thebe no radical change of the present financial policy or tax system. Then, to the

destitute, he indicated that there will be a safety net for those who have difficultiesdestitute, he indicated that there will be a safety net for those who have difficultiesdestitute, he indicated that there will be a safety net for those who have difficultiesdestitute, he indicated that there will be a safety net for those who have difficulties

in looking after themselves. Besides, he guaranteed that spending will continue toin looking after themselves. Besides, he guaranteed that spending will continue toin looking after themselves. Besides, he guaranteed that spending will continue toin looking after themselves. Besides, he guaranteed that spending will continue to

be commensurate with revenue and that there will be an ample surplus going into thebe commensurate with revenue and that there will be an ample surplus going into thebe commensurate with revenue and that there will be an ample surplus going into thebe commensurate with revenue and that there will be an ample surplus going into the

reserve. It seems that the last point is intended to satisfy a requirement of thereserve. It seems that the last point is intended to satisfy a requirement of thereserve. It seems that the last point is intended to satisfy a requirement of thereserve. It seems that the last point is intended to satisfy a requirement of the

Basic Law or of China. Regrettably, the above declaration, assurance and guaranteeBasic Law or of China. Regrettably, the above declaration, assurance and guaranteeBasic Law or of China. Regrettably, the above declaration, assurance and guaranteeBasic Law or of China. Regrettably, the above declaration, assurance and guarantee

have failed to convince all parties to accept the Financial Secretary's first Budgethave failed to convince all parties to accept the Financial Secretary's first Budgethave failed to convince all parties to accept the Financial Secretary's first Budgethave failed to convince all parties to accept the Financial Secretary's first Budget

wholeheartedly. On the contrary, many citizens, political parties, businessmen,wholeheartedly. On the contrary, many citizens, political parties, businessmen,wholeheartedly. On the contrary, many citizens, political parties, businessmen,wholeheartedly. On the contrary, many citizens, political parties, businessmen,

industrialists and interest groups have expressed strong dissatisfaction. For theindustrialists and interest groups have expressed strong dissatisfaction. For theindustrialists and interest groups have expressed strong dissatisfaction. For theindustrialists and interest groups have expressed strong dissatisfaction. For the

Financial Secretary, this is indeed a case of "things turning out contrary to one'sFinancial Secretary, this is indeed a case of "things turning out contrary to one'sFinancial Secretary, this is indeed a case of "things turning out contrary to one'sFinancial Secretary, this is indeed a case of "things turning out contrary to one's

wishes," and the main cause of which, in my opinion, is due to the Government'swishes," and the main cause of which, in my opinion, is due to the Government'swishes," and the main cause of which, in my opinion, is due to the Government'swishes," and the main cause of which, in my opinion, is due to the Government's

budget-making process, which is a very closed process. Both the general public andbudget-making process, which is a very closed process. Both the general public andbudget-making process, which is a very closed process. Both the general public andbudget-making process, which is a very closed process. Both the general public and

Members of this Council were denied a chance to play a part in the process. TheMembers of this Council were denied a chance to play a part in the process. TheMembers of this Council were denied a chance to play a part in the process. TheMembers of this Council were denied a chance to play a part in the process. The

Government therefore failed to have a real grasp of the people's needs. Also, afterGovernment therefore failed to have a real grasp of the people's needs. Also, afterGovernment therefore failed to have a real grasp of the people's needs. Also, afterGovernment therefore failed to have a real grasp of the people's needs. Also, after

the Budget was put forward, the Government, for the sake of face saving and maintainingthe Budget was put forward, the Government, for the sake of face saving and maintainingthe Budget was put forward, the Government, for the sake of face saving and maintainingthe Budget was put forward, the Government, for the sake of face saving and maintaining

the authority of rule, turned a deaf ear to the reasonable suggestions of the publicthe authority of rule, turned a deaf ear to the reasonable suggestions of the publicthe authority of rule, turned a deaf ear to the reasonable suggestions of the publicthe authority of rule, turned a deaf ear to the reasonable suggestions of the public

nor accepted Members' motions for amendment. There is simply no room for negotiation.nor accepted Members' motions for amendment. There is simply no room for negotiation.nor accepted Members' motions for amendment. There is simply no room for negotiation.nor accepted Members' motions for amendment. There is simply no room for negotiation.

How can this convince people and win their hearts? It is hoped that this lesson ofHow can this convince people and win their hearts? It is hoped that this lesson ofHow can this convince people and win their hearts? It is hoped that this lesson ofHow can this convince people and win their hearts? It is hoped that this lesson of

"things turning out contrary to one's wishes" will help the Government to come round"things turning out contrary to one's wishes" will help the Government to come round"things turning out contrary to one's wishes" will help the Government to come round"things turning out contrary to one's wishes" will help the Government to come round

to the fact that the prevalent political environment requires the Government to beto the fact that the prevalent political environment requires the Government to beto the fact that the prevalent political environment requires the Government to beto the fact that the prevalent political environment requires the Government to be

more transparent and more open. From now on, the Government should try harder tomore transparent and more open. From now on, the Government should try harder tomore transparent and more open. From now on, the Government should try harder tomore transparent and more open. From now on, the Government should try harder to

heed and accept the views of the public.heed and accept the views of the public.heed and accept the views of the public.heed and accept the views of the public.

With regard to the substance of the Budget, I will focus my comments on threeWith regard to the substance of the Budget, I will focus my comments on threeWith regard to the substance of the Budget, I will focus my comments on threeWith regard to the substance of the Budget, I will focus my comments on three

aspects: the tax burden on middle income group, education spending and medicalaspects: the tax burden on middle income group, education spending and medicalaspects: the tax burden on middle income group, education spending and medicalaspects: the tax burden on middle income group, education spending and medical

services spending.services spending.services spending.services spending.

(I)(I)(I)(I) Tax burden on middle income groupTax burden on middle income groupTax burden on middle income groupTax burden on middle income group

The present tax system is extremely unfair to the middle income group or theThe present tax system is extremely unfair to the middle income group or theThe present tax system is extremely unfair to the middle income group or theThe present tax system is extremely unfair to the middle income group or the

sandwich class. According to the Budget, taking into account the implementation ofsandwich class. According to the Budget, taking into account the implementation ofsandwich class. According to the Budget, taking into account the implementation ofsandwich class. According to the Budget, taking into account the implementation of

the 1992/93 tax proposals, salaried persons earning between $120,000 and $600,000the 1992/93 tax proposals, salaried persons earning between $120,000 and $600,000the 1992/93 tax proposals, salaried persons earning between $120,000 and $600,000the 1992/93 tax proposals, salaried persons earning between $120,000 and $600,000

per annum (that is, between $10,000 and $50,000 per month) will make up 35.2% of allper annum (that is, between $10,000 and $50,000 per month) will make up 35.2% of allper annum (that is, between $10,000 and $50,000 per month) will make up 35.2% of allper annum (that is, between $10,000 and $50,000 per month) will make up 35.2% of all

salaries tax payers, but the tax they pay will account for 64.8% of all the salariessalaries tax payers, but the tax they pay will account for 64.8% of all the salariessalaries tax payers, but the tax they pay will account for 64.8% of all the salariessalaries tax payers, but the tax they pay will account for 64.8% of all the salaries

tax. On the other hand, if a single person not eligible for dependent parenttax. On the other hand, if a single person not eligible for dependent parenttax. On the other hand, if a single person not eligible for dependent parenttax. On the other hand, if a single person not eligible for dependent parent

allowance earns a salary in excess of $200,000 a year, he will have to pay tax atallowance earns a salary in excess of $200,000 a year, he will have to pay tax atallowance earns a salary in excess of $200,000 a year, he will have to pay tax atallowance earns a salary in excess of $200,000 a year, he will have to pay tax at

the standard rate of 15%. From this example, it is clear that the present tax systemthe standard rate of 15%. From this example, it is clear that the present tax systemthe standard rate of 15%. From this example, it is clear that the present tax systemthe standard rate of 15%. From this example, it is clear that the present tax system

imposes a heavy burden on, and is extremely unfair to, the middle income group.imposes a heavy burden on, and is extremely unfair to, the middle income group.imposes a heavy burden on, and is extremely unfair to, the middle income group.imposes a heavy burden on, and is extremely unfair to, the middle income group.

In his 20 March statement appealing to Legislative Councillors to support hisIn his 20 March statement appealing to Legislative Councillors to support hisIn his 20 March statement appealing to Legislative Councillors to support hisIn his 20 March statement appealing to Legislative Councillors to support his

Budget, the Financial Secretary expressed his concern about the housing problem ofBudget, the Financial Secretary expressed his concern about the housing problem ofBudget, the Financial Secretary expressed his concern about the housing problem ofBudget, the Financial Secretary expressed his concern about the housing problem of

the "sandwich class" and indicated that he will consider ameliorating personalthe "sandwich class" and indicated that he will consider ameliorating personalthe "sandwich class" and indicated that he will consider ameliorating personalthe "sandwich class" and indicated that he will consider ameliorating personal

allowance and tax bands in the 1993/94 financial year, so as to lighten the tax burdenallowance and tax bands in the 1993/94 financial year, so as to lighten the tax burdenallowance and tax bands in the 1993/94 financial year, so as to lighten the tax burdenallowance and tax bands in the 1993/94 financial year, so as to lighten the tax burden

for the lower and middle income groups. Given that the Financial Secretary hasfor the lower and middle income groups. Given that the Financial Secretary hasfor the lower and middle income groups. Given that the Financial Secretary hasfor the lower and middle income groups. Given that the Financial Secretary has

conceded that the lower and middle income groups are bearing a heavy tax burden,conceded that the lower and middle income groups are bearing a heavy tax burden,conceded that the lower and middle income groups are bearing a heavy tax burden,conceded that the lower and middle income groups are bearing a heavy tax burden,

why does he not solve the problem this year when the financial situation is good?why does he not solve the problem this year when the financial situation is good?why does he not solve the problem this year when the financial situation is good?why does he not solve the problem this year when the financial situation is good?

The solution is to raise the allowance and widen the tax band. These are what theThe solution is to raise the allowance and widen the tax band. These are what theThe solution is to raise the allowance and widen the tax band. These are what theThe solution is to raise the allowance and widen the tax band. These are what the

majority of the Members are demanding. Why must we wait until next year to do suchmajority of the Members are demanding. Why must we wait until next year to do suchmajority of the Members are demanding. Why must we wait until next year to do suchmajority of the Members are demanding. Why must we wait until next year to do such

a good thing?a good thing?a good thing?a good thing?

Concerning the tax issue, Meeting Point has a three-point suggestion to make:Concerning the tax issue, Meeting Point has a three-point suggestion to make:Concerning the tax issue, Meeting Point has a three-point suggestion to make:Concerning the tax issue, Meeting Point has a three-point suggestion to make:

(1)(1)(1)(1) Raise personal allowance to $60,000 or more, thus lessening the tax burdenRaise personal allowance to $60,000 or more, thus lessening the tax burdenRaise personal allowance to $60,000 or more, thus lessening the tax burdenRaise personal allowance to $60,000 or more, thus lessening the tax burden

on the lower and middle income groups.on the lower and middle income groups.on the lower and middle income groups.on the lower and middle income groups.

(2)(2)(2)(2) Widen tax band, changing tWiden tax band, changing tWiden tax band, changing tWiden tax band, changing the spread of each band from $20,000 to $30,000.he spread of each band from $20,000 to $30,000.he spread of each band from $20,000 to $30,000.he spread of each band from $20,000 to $30,000.

(3)(3)(3)(3) Set up a broadly based committee to conduct a full-ranging review of theSet up a broadly based committee to conduct a full-ranging review of theSet up a broadly based committee to conduct a full-ranging review of theSet up a broadly based committee to conduct a full-ranging review of the

present tax system.present tax system.present tax system.present tax system.

(II)(II)(II)(II) Education spendingEducation spendingEducation spendingEducation spending

Many educational groups have commented on education spending. They are stronglyMany educational groups have commented on education spending. They are stronglyMany educational groups have commented on education spending. They are stronglyMany educational groups have commented on education spending. They are strongly

opposed to the Government's curtailment of spending on basic education. However,opposed to the Government's curtailment of spending on basic education. However,opposed to the Government's curtailment of spending on basic education. However,opposed to the Government's curtailment of spending on basic education. However,

the Government insists that the 1992/93 Budget has increased spending on educationthe Government insists that the 1992/93 Budget has increased spending on educationthe Government insists that the 1992/93 Budget has increased spending on educationthe Government insists that the 1992/93 Budget has increased spending on education

as a whole to the tune of 1.5% over the revised Budget last year, amounting to moreas a whole to the tune of 1.5% over the revised Budget last year, amounting to moreas a whole to the tune of 1.5% over the revised Budget last year, amounting to moreas a whole to the tune of 1.5% over the revised Budget last year, amounting to more

than $11.85 billion and made no cuts on basic education spending. Therefore, inthan $11.85 billion and made no cuts on basic education spending. Therefore, inthan $11.85 billion and made no cuts on basic education spending. Therefore, inthan $11.85 billion and made no cuts on basic education spending. Therefore, in

Government's opinion, it is a misconception that education spending is to be slashed.Government's opinion, it is a misconception that education spending is to be slashed.Government's opinion, it is a misconception that education spending is to be slashed.Government's opinion, it is a misconception that education spending is to be slashed.

Admittedly, the Government will slightly increase its funding for education.Admittedly, the Government will slightly increase its funding for education.Admittedly, the Government will slightly increase its funding for education.Admittedly, the Government will slightly increase its funding for education.

However, if inflation is taken into account, the real increase is negative. In otherHowever, if inflation is taken into account, the real increase is negative. In otherHowever, if inflation is taken into account, the real increase is negative. In otherHowever, if inflation is taken into account, the real increase is negative. In other

words, the increase in education spending fails to catch up with inflation. Also,words, the increase in education spending fails to catch up with inflation. Also,words, the increase in education spending fails to catch up with inflation. Also,words, the increase in education spending fails to catch up with inflation. Also,

it may be found that the unit cost of secondary and primary education has declinedit may be found that the unit cost of secondary and primary education has declinedit may be found that the unit cost of secondary and primary education has declinedit may be found that the unit cost of secondary and primary education has declined

steadily and will be so over the years from 1990 to 1994. We think that it is a hardsteadily and will be so over the years from 1990 to 1994. We think that it is a hardsteadily and will be so over the years from 1990 to 1994. We think that it is a hardsteadily and will be so over the years from 1990 to 1994. We think that it is a hard

fact that the Government is reducing funding for basic education.fact that the Government is reducing funding for basic education.fact that the Government is reducing funding for basic education.fact that the Government is reducing funding for basic education.

Also, with regard to education spending, I wish to reiterate the importance ofAlso, with regard to education spending, I wish to reiterate the importance ofAlso, with regard to education spending, I wish to reiterate the importance ofAlso, with regard to education spending, I wish to reiterate the importance of

linking up basic education with post-secondary education. Over the next three years,linking up basic education with post-secondary education. Over the next three years,linking up basic education with post-secondary education. Over the next three years,linking up basic education with post-secondary education. Over the next three years,

the places available in tertiary institutions will increase by 18%. Meeting Pointthe places available in tertiary institutions will increase by 18%. Meeting Pointthe places available in tertiary institutions will increase by 18%. Meeting Pointthe places available in tertiary institutions will increase by 18%. Meeting Point

is of the view that a mere expansion of tertiary education is not a satisfactoryis of the view that a mere expansion of tertiary education is not a satisfactoryis of the view that a mere expansion of tertiary education is not a satisfactoryis of the view that a mere expansion of tertiary education is not a satisfactory

development of education. We all know that it is of utmost importance for thedevelopment of education. We all know that it is of utmost importance for thedevelopment of education. We all know that it is of utmost importance for thedevelopment of education. We all know that it is of utmost importance for the

students to be provided with a good secondary and primary education before receivingstudents to be provided with a good secondary and primary education before receivingstudents to be provided with a good secondary and primary education before receivingstudents to be provided with a good secondary and primary education before receiving

post-secondary education. They must lay a sound foundation before they go on topost-secondary education. They must lay a sound foundation before they go on topost-secondary education. They must lay a sound foundation before they go on topost-secondary education. They must lay a sound foundation before they go on to

receive specialized or professional training. In budgeting funds for education, itreceive specialized or professional training. In budgeting funds for education, itreceive specialized or professional training. In budgeting funds for education, itreceive specialized or professional training. In budgeting funds for education, it

is unfortunate that the Government gives separate consideration to post-secondaryis unfortunate that the Government gives separate consideration to post-secondaryis unfortunate that the Government gives separate consideration to post-secondaryis unfortunate that the Government gives separate consideration to post-secondary

education and basic education. For the year of 1992/93, while tertiary educationeducation and basic education. For the year of 1992/93, while tertiary educationeducation and basic education. For the year of 1992/93, while tertiary educationeducation and basic education. For the year of 1992/93, while tertiary education

spending will increase by more than 18%, funding for secondary and primary educationspending will increase by more than 18%, funding for secondary and primary educationspending will increase by more than 18%, funding for secondary and primary educationspending will increase by more than 18%, funding for secondary and primary education

is going to lag behind inflation. That is to say, there will not be sufficientis going to lag behind inflation. That is to say, there will not be sufficientis going to lag behind inflation. That is to say, there will not be sufficientis going to lag behind inflation. That is to say, there will not be sufficient

resources to enable basic education to keep pace with development of post-secondaryresources to enable basic education to keep pace with development of post-secondaryresources to enable basic education to keep pace with development of post-secondaryresources to enable basic education to keep pace with development of post-secondary

education. This top-heavy situation will not be a healthy development. Our hopeeducation. This top-heavy situation will not be a healthy development. Our hopeeducation. This top-heavy situation will not be a healthy development. Our hopeeducation. This top-heavy situation will not be a healthy development. Our hope

is to train large numbers of talents to meet the needs of the community, but thisis to train large numbers of talents to meet the needs of the community, but thisis to train large numbers of talents to meet the needs of the community, but thisis to train large numbers of talents to meet the needs of the community, but this

target is likely to be achieved only at the expense of quality.target is likely to be achieved only at the expense of quality.target is likely to be achieved only at the expense of quality.target is likely to be achieved only at the expense of quality.

With regard to post-secondary education, I wish to make one additional point.With regard to post-secondary education, I wish to make one additional point.With regard to post-secondary education, I wish to make one additional point.With regard to post-secondary education, I wish to make one additional point.

The Government gives a sum to the University and Polytechnic Grants Committee as theThe Government gives a sum to the University and Polytechnic Grants Committee as theThe Government gives a sum to the University and Polytechnic Grants Committee as theThe Government gives a sum to the University and Polytechnic Grants Committee as the

funds for tertiary education. As the funds are public money, the Government has thefunds for tertiary education. As the funds are public money, the Government has thefunds for tertiary education. As the funds are public money, the Government has thefunds for tertiary education. As the funds are public money, the Government has the

duty to make sure that public spending in this direction will be made in the interestduty to make sure that public spending in this direction will be made in the interestduty to make sure that public spending in this direction will be made in the interestduty to make sure that public spending in this direction will be made in the interest

of the community and that the resources will be put to effective use. Meeting Pointof the community and that the resources will be put to effective use. Meeting Pointof the community and that the resources will be put to effective use. Meeting Pointof the community and that the resources will be put to effective use. Meeting Point

thinks that the Government is lack of supervision over the financial operations ofthinks that the Government is lack of supervision over the financial operations ofthinks that the Government is lack of supervision over the financial operations ofthinks that the Government is lack of supervision over the financial operations of

the University and Polytechnic Grants Committee. We suggest that the Governmentthe University and Polytechnic Grants Committee. We suggest that the Governmentthe University and Polytechnic Grants Committee. We suggest that the Governmentthe University and Polytechnic Grants Committee. We suggest that the Government

establish a mechanism to enhance its supervisory role.establish a mechanism to enhance its supervisory role.establish a mechanism to enhance its supervisory role.establish a mechanism to enhance its supervisory role.

The Education Department has decided to add two places to each class at the PrimaryThe Education Department has decided to add two places to each class at the PrimaryThe Education Department has decided to add two places to each class at the PrimaryThe Education Department has decided to add two places to each class at the Primary

I and Secondary I levels with effect from 1992. This measure will reduce publicI and Secondary I levels with effect from 1992. This measure will reduce publicI and Secondary I levels with effect from 1992. This measure will reduce publicI and Secondary I levels with effect from 1992. This measure will reduce public

expenditure by eliminating 62 primary school classes and more than 80 secondary schoolexpenditure by eliminating 62 primary school classes and more than 80 secondary schoolexpenditure by eliminating 62 primary school classes and more than 80 secondary schoolexpenditure by eliminating 62 primary school classes and more than 80 secondary school

classes. I wish to remind the Education Department that most new towns areclasses. I wish to remind the Education Department that most new towns areclasses. I wish to remind the Education Department that most new towns areclasses. I wish to remind the Education Department that most new towns are

experiencing a shortage of secondary and primary school places. Take my constituencyexperiencing a shortage of secondary and primary school places. Take my constituencyexperiencing a shortage of secondary and primary school places. Take my constituencyexperiencing a shortage of secondary and primary school places. Take my constituency

for instance. In Tai Po and North District, there is a shortage of nearly 1 000for instance. In Tai Po and North District, there is a shortage of nearly 1 000for instance. In Tai Po and North District, there is a shortage of nearly 1 000for instance. In Tai Po and North District, there is a shortage of nearly 1 000

Secondary I school places in 1992. We are going to lodge a strong protest if thereSecondary I school places in 1992. We are going to lodge a strong protest if thereSecondary I school places in 1992. We are going to lodge a strong protest if thereSecondary I school places in 1992. We are going to lodge a strong protest if there

is further reduction of classes in these districts. We hope that the Educationis further reduction of classes in these districts. We hope that the Educationis further reduction of classes in these districts. We hope that the Educationis further reduction of classes in these districts. We hope that the Education

Department will not overlook the needs of the new towns.Department will not overlook the needs of the new towns.Department will not overlook the needs of the new towns.Department will not overlook the needs of the new towns.

With regard to educationWith regard to educationWith regard to educationWith regard to education spending, Meeting Point has a six-point suggestion to spending, Meeting Point has a six-point suggestion to spending, Meeting Point has a six-point suggestion to spending, Meeting Point has a six-point suggestion to

make:make:make:make:

(1)(1)(1)(1) Increase funding for basic education in keeping with the development ofIncrease funding for basic education in keeping with the development ofIncrease funding for basic education in keeping with the development ofIncrease funding for basic education in keeping with the development of

post-secondary education.post-secondary education.post-secondary education.post-secondary education.

(2)(2)(2)(2) Allocate more resources for implementing the recommendations of theAllocate more resources for implementing the recommendations of theAllocate more resources for implementing the recommendations of theAllocate more resources for implementing the recommendations of the

Education Commission Report No. 4, such as setting up a curriculum development councilEducation Commission Report No. 4, such as setting up a curriculum development councilEducation Commission Report No. 4, such as setting up a curriculum development councilEducation Commission Report No. 4, such as setting up a curriculum development council

and improving special education.and improving special education.and improving special education.and improving special education.

(3)(3)(3)(3) Ensure reserves for implementing the recommendations of the EducationEnsure reserves for implementing the recommendations of the EducationEnsure reserves for implementing the recommendations of the EducationEnsure reserves for implementing the recommendations of the Education

Commission Report No. 5.Commission Report No. 5.Commission Report No. 5.Commission Report No. 5.

(4)(4)(4)(4) Create Graduate Master posts in primary schoolCreate Graduate Master posts in primary schoolCreate Graduate Master posts in primary schoolCreate Graduate Master posts in primary schools and increase the proportions and increase the proportions and increase the proportions and increase the proportion

of Graduate Masters in secondary schools.of Graduate Masters in secondary schools.of Graduate Masters in secondary schools.of Graduate Masters in secondary schools.

(5)(5)(5)(5) Step up the Government's reasonable supervision over the financialStep up the Government's reasonable supervision over the financialStep up the Government's reasonable supervision over the financialStep up the Government's reasonable supervision over the financial

operations of the University and Polytechnic Grants Committee.operations of the University and Polytechnic Grants Committee.operations of the University and Polytechnic Grants Committee.operations of the University and Polytechnic Grants Committee.

(6)(6)(6)(6) We are strongly opposed to the Education DWe are strongly opposed to the Education DWe are strongly opposed to the Education DWe are strongly opposed to the Education Department for its reduction ofepartment for its reduction ofepartment for its reduction ofepartment for its reduction of

secondary and primary school classes in new towns.secondary and primary school classes in new towns.secondary and primary school classes in new towns.secondary and primary school classes in new towns.

(III)(III)(III)(III) Medical services spendingMedical services spendingMedical services spendingMedical services spending

The Budget shows that the Government is going to allocate over $10 billion toThe Budget shows that the Government is going to allocate over $10 billion toThe Budget shows that the Government is going to allocate over $10 billion toThe Budget shows that the Government is going to allocate over $10 billion to

the Hospital Authority for carrying out various hospital services. Ten billionthe Hospital Authority for carrying out various hospital services. Ten billionthe Hospital Authority for carrying out various hospital services. Ten billionthe Hospital Authority for carrying out various hospital services. Ten billion

dollars is not a small sum. It represents a 27% increase over last year's fundingdollars is not a small sum. It represents a 27% increase over last year's fundingdollars is not a small sum. It represents a 27% increase over last year's fundingdollars is not a small sum. It represents a 27% increase over last year's funding

for hospital services. However, if we carefully analyse the detailed distributionfor hospital services. However, if we carefully analyse the detailed distributionfor hospital services. However, if we carefully analyse the detailed distributionfor hospital services. However, if we carefully analyse the detailed distribution

of the amount, we will find that 80% of it goes to salaries and fringe benefits, whileof the amount, we will find that 80% of it goes to salaries and fringe benefits, whileof the amount, we will find that 80% of it goes to salaries and fringe benefits, whileof the amount, we will find that 80% of it goes to salaries and fringe benefits, while

the resources to be used for actually improving hospital services, such as medicine,the resources to be used for actually improving hospital services, such as medicine,the resources to be used for actually improving hospital services, such as medicine,the resources to be used for actually improving hospital services, such as medicine,

equipment and therapeutic technology, will not be as sufficient as one would likeequipment and therapeutic technology, will not be as sufficient as one would likeequipment and therapeutic technology, will not be as sufficient as one would likeequipment and therapeutic technology, will not be as sufficient as one would like

to see. Only $150 million, or 1.5% of the total medical services spending, will beto see. Only $150 million, or 1.5% of the total medical services spending, will beto see. Only $150 million, or 1.5% of the total medical services spending, will beto see. Only $150 million, or 1.5% of the total medical services spending, will be

spent on new items under planning. It is thus clear to us that not much resourcesspent on new items under planning. It is thus clear to us that not much resourcesspent on new items under planning. It is thus clear to us that not much resourcesspent on new items under planning. It is thus clear to us that not much resources

will be used for improving the existing hospital services, as most of the money willwill be used for improving the existing hospital services, as most of the money willwill be used for improving the existing hospital services, as most of the money willwill be used for improving the existing hospital services, as most of the money will

be spent on paying staff salaries and benefits. We can only pin our hope on thebe spent on paying staff salaries and benefits. We can only pin our hope on thebe spent on paying staff salaries and benefits. We can only pin our hope on thebe spent on paying staff salaries and benefits. We can only pin our hope on the

hospital employees, after their salaries and benefits are improved, to provide betterhospital employees, after their salaries and benefits are improved, to provide betterhospital employees, after their salaries and benefits are improved, to provide betterhospital employees, after their salaries and benefits are improved, to provide better

services for the good of the patients.services for the good of the patients.services for the good of the patients.services for the good of the patients.

It is the current practice of the Government to give a sum to the HospitalIt is the current practice of the Government to give a sum to the HospitalIt is the current practice of the Government to give a sum to the HospitalIt is the current practice of the Government to give a sum to the Hospital

Authority as its funds. Members of this Council have been provided with very limitedAuthority as its funds. Members of this Council have been provided with very limitedAuthority as its funds. Members of this Council have been provided with very limitedAuthority as its funds. Members of this Council have been provided with very limited

information concerning this money allocation. Relevant information contained in theinformation concerning this money allocation. Relevant information contained in theinformation concerning this money allocation. Relevant information contained in theinformation concerning this money allocation. Relevant information contained in the

Budget is but a few words. One wonders what criteria are applied with regard to theBudget is but a few words. One wonders what criteria are applied with regard to theBudget is but a few words. One wonders what criteria are applied with regard to theBudget is but a few words. One wonders what criteria are applied with regard to the

allocation. Meeting Point's three Members in this Council think that, with such aallocation. Meeting Point's three Members in this Council think that, with such aallocation. Meeting Point's three Members in this Council think that, with such aallocation. Meeting Point's three Members in this Council think that, with such a

very low degree of transparency, it is difficult for us to judge whether the moneyvery low degree of transparency, it is difficult for us to judge whether the moneyvery low degree of transparency, it is difficult for us to judge whether the moneyvery low degree of transparency, it is difficult for us to judge whether the money

will be spent appropriately. We think that it is incumbent on the Government towill be spent appropriately. We think that it is incumbent on the Government towill be spent appropriately. We think that it is incumbent on the Government towill be spent appropriately. We think that it is incumbent on the Government to

provide further information to this Council, clarifying what criteria it uses inprovide further information to this Council, clarifying what criteria it uses inprovide further information to this Council, clarifying what criteria it uses inprovide further information to this Council, clarifying what criteria it uses in

allocating funds to the Hospital Authority. Meeting Point would like to suggest thatallocating funds to the Hospital Authority. Meeting Point would like to suggest thatallocating funds to the Hospital Authority. Meeting Point would like to suggest thatallocating funds to the Hospital Authority. Meeting Point would like to suggest that

the Government lay down criteria for evaluating the performance and efficiency ofthe Government lay down criteria for evaluating the performance and efficiency ofthe Government lay down criteria for evaluating the performance and efficiency ofthe Government lay down criteria for evaluating the performance and efficiency of

all non-departmental public bodies including the Hospital Authority, so that thereall non-departmental public bodies including the Hospital Authority, so that thereall non-departmental public bodies including the Hospital Authority, so that thereall non-departmental public bodies including the Hospital Authority, so that there

may be a basis for the allocation of funds and the supervision of financialmay be a basis for the allocation of funds and the supervision of financialmay be a basis for the allocation of funds and the supervision of financialmay be a basis for the allocation of funds and the supervision of financial

operations.operations.operations.operations.

According to this year's Budget, the spending on public health services willAccording to this year's Budget, the spending on public health services willAccording to this year's Budget, the spending on public health services willAccording to this year's Budget, the spending on public health services will

merely increase by 2.1%. This meagre increase is far less than the inflation rate.merely increase by 2.1%. This meagre increase is far less than the inflation rate.merely increase by 2.1%. This meagre increase is far less than the inflation rate.merely increase by 2.1%. This meagre increase is far less than the inflation rate.

In the part on medical services, the Government expresses the hope to improve people'sIn the part on medical services, the Government expresses the hope to improve people'sIn the part on medical services, the Government expresses the hope to improve people'sIn the part on medical services, the Government expresses the hope to improve people's

health so that the demand for hospitalization will decline. However, the Governmenthealth so that the demand for hospitalization will decline. However, the Governmenthealth so that the demand for hospitalization will decline. However, the Governmenthealth so that the demand for hospitalization will decline. However, the Government

fails to provide adequate resources for attaining such a goal. We think that thefails to provide adequate resources for attaining such a goal. We think that thefails to provide adequate resources for attaining such a goal. We think that thefails to provide adequate resources for attaining such a goal. We think that the

Government must lay out more resources for implementing the recommendation of theGovernment must lay out more resources for implementing the recommendation of theGovernment must lay out more resources for implementing the recommendation of theGovernment must lay out more resources for implementing the recommendation of the

report on primary health care service, such as improving out-patient services, dentalreport on primary health care service, such as improving out-patient services, dentalreport on primary health care service, such as improving out-patient services, dentalreport on primary health care service, such as improving out-patient services, dental

care and the keeping of patients' records.care and the keeping of patients' records.care and the keeping of patients' records.care and the keeping of patients' records.

As to medical services spendiAs to medical services spendiAs to medical services spendiAs to medical services spending, Meeting Point has a four-point suggestion tong, Meeting Point has a four-point suggestion tong, Meeting Point has a four-point suggestion tong, Meeting Point has a four-point suggestion to

make:make:make:make:

(1)(1)(1)(1) The Hospital Authority should increase its degree of transparency andThe Hospital Authority should increase its degree of transparency andThe Hospital Authority should increase its degree of transparency andThe Hospital Authority should increase its degree of transparency and

accountability and provide more explanations to the public concerning how resourcesaccountability and provide more explanations to the public concerning how resourcesaccountability and provide more explanations to the public concerning how resourcesaccountability and provide more explanations to the public concerning how resources

are used.are used.are used.are used.

(2)(2)(2)(2) The Government should layThe Government should layThe Government should layThe Government should lay down a set of criteria for performance and down a set of criteria for performance and down a set of criteria for performance and down a set of criteria for performance and

efficiency evaluation and should supervise the financial management of the Hospitalefficiency evaluation and should supervise the financial management of the Hospitalefficiency evaluation and should supervise the financial management of the Hospitalefficiency evaluation and should supervise the financial management of the Hospital

Authority.Authority.Authority.Authority.

(3)(3)(3)(3) Provide additional resources for carrying out the recommendations of theProvide additional resources for carrying out the recommendations of theProvide additional resources for carrying out the recommendations of theProvide additional resources for carrying out the recommendations of the

report on primary health care service.report on primary health care service.report on primary health care service.report on primary health care service.

(4)(4)(4)(4) Speed up the construction of hospitals and the provision of other medicalSpeed up the construction of hospitals and the provision of other medicalSpeed up the construction of hospitals and the provision of other medicalSpeed up the construction of hospitals and the provision of other medical

services in medically backward areas, such as New Territories North, to satisfy theservices in medically backward areas, such as New Territories North, to satisfy theservices in medically backward areas, such as New Territories North, to satisfy theservices in medically backward areas, such as New Territories North, to satisfy the

needs of the public.needs of the public.needs of the public.needs of the public.

Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.Mr Deputy President, these are my remarks.

MR JAMES TO (in Cantonese): Mr Deputy President, since its publication, the BudgetMR JAMES TO (in Cantonese): Mr Deputy President, since its publication, the BudgetMR JAMES TO (in Cantonese): Mr Deputy President, since its publication, the BudgetMR JAMES TO (in Cantonese): Mr Deputy President, since its publication, the Budget

has met with strong public response. Grassroots organizations and businessmen alikehas met with strong public response. Grassroots organizations and businessmen alikehas met with strong public response. Grassroots organizations and businessmen alikehas met with strong public response. Grassroots organizations and businessmen alike

have expressed their wishes concerning the Budget. The United Democrats of Hong Konghave expressed their wishes concerning the Budget. The United Democrats of Hong Konghave expressed their wishes concerning the Budget. The United Democrats of Hong Konghave expressed their wishes concerning the Budget. The United Democrats of Hong Kong

(UDHK) have held extensive consultations with the public to find out their views about(UDHK) have held extensive consultations with the public to find out their views about(UDHK) have held extensive consultations with the public to find out their views about(UDHK) have held extensive consultations with the public to find out their views about

the budget proposals. We have also met with the Governor and the Financial Secretarythe budget proposals. We have also met with the Governor and the Financial Secretarythe budget proposals. We have also met with the Governor and the Financial Secretarythe budget proposals. We have also met with the Governor and the Financial Secretary

in the hope of conveying to them the feelings of the people.in the hope of conveying to them the feelings of the people.in the hope of conveying to them the feelings of the people.in the hope of conveying to them the feelings of the people.

Take my geographical constituency, Kowloon WeTake my geographical constituency, Kowloon WeTake my geographical constituency, Kowloon WeTake my geographical constituency, Kowloon West, as an example. Most of thest, as an example. Most of thest, as an example. Most of thest, as an example. Most of the

residents there are of the working class or the middle income group. Where theirresidents there are of the working class or the middle income group. Where theirresidents there are of the working class or the middle income group. Where theirresidents there are of the working class or the middle income group. Where their

jobs are concerned, people of the working class have fallen into the plight of beingjobs are concerned, people of the working class have fallen into the plight of beingjobs are concerned, people of the working class have fallen into the plight of beingjobs are concerned, people of the working class have fallen into the plight of being

under-employed as a result of the large-scale importation of foreign workers. Whereunder-employed as a result of the large-scale importation of foreign workers. Whereunder-employed as a result of the large-scale importation of foreign workers. Whereunder-employed as a result of the large-scale importation of foreign workers. Where

social welfare is concerned, the Government's gradual privatization of certainsocial welfare is concerned, the Government's gradual privatization of certainsocial welfare is concerned, the Government's gradual privatization of certainsocial welfare is concerned, the Government's gradual privatization of certain

departments, such as medical services, has driven up the cost of living, making itdepartments, such as medical services, has driven up the cost of living, making itdepartments, such as medical services, has driven up the cost of living, making itdepartments, such as medical services, has driven up the cost of living, making it

impossible for them to have an early improvement to their quality of life. Whereimpossible for them to have an early improvement to their quality of life. Whereimpossible for them to have an early improvement to their quality of life. Whereimpossible for them to have an early improvement to their quality of life. Where

housing is concerned, the earnings of the middle income group are lagging far behindhousing is concerned, the earnings of the middle income group are lagging far behindhousing is concerned, the earnings of the middle income group are lagging far behindhousing is concerned, the earnings of the middle income group are lagging far behind

the runaway prices of flats presenting great difficulty for one to realize one's wishthe runaway prices of flats presenting great difficulty for one to realize one's wishthe runaway prices of flats presenting great difficulty for one to realize one's wishthe runaway prices of flats presenting great difficulty for one to realize one's wish

to own a home. Even those living in public housing are under pressure from risingto own a home. Even those living in public housing are under pressure from risingto own a home. Even those living in public housing are under pressure from risingto own a home. Even those living in public housing are under pressure from rising

rents and rates. And now, one will be caught in the tax net when his or her annualrents and rates. And now, one will be caught in the tax net when his or her annualrents and rates. And now, one will be caught in the tax net when his or her annualrents and rates. And now, one will be caught in the tax net when his or her annual

salary reaches $46,000. Under these stresses of life, I wonder what roles the taxsalary reaches $46,000. Under these stresses of life, I wonder what roles the taxsalary reaches $46,000. Under these stresses of life, I wonder what roles the taxsalary reaches $46,000. Under these stresses of life, I wonder what roles the tax

system plays in bringing about fairness and in narrowing the gap between the richsystem plays in bringing about fairness and in narrowing the gap between the richsystem plays in bringing about fairness and in narrowing the gap between the richsystem plays in bringing about fairness and in narrowing the gap between the rich

and the poor.and the poor.and the poor.and the poor.

From the sociological point of view, when a certain group of people in societyFrom the sociological point of view, when a certain group of people in societyFrom the sociological point of view, when a certain group of people in societyFrom the sociological point of view, when a certain group of people in society

are cornered, they will resort to a sudden force of resistance that may be sociallyare cornered, they will resort to a sudden force of resistance that may be sociallyare cornered, they will resort to a sudden force of resistance that may be sociallyare cornered, they will resort to a sudden force of resistance that may be socially

devastating. In this connection, I have talked to some police officials. They alldevastating. In this connection, I have talked to some police officials. They alldevastating. In this connection, I have talked to some police officials. They alldevastating. In this connection, I have talked to some police officials. They all

think that, if people are driven to desperation and left with no other recourse, theythink that, if people are driven to desperation and left with no other recourse, theythink that, if people are driven to desperation and left with no other recourse, theythink that, if people are driven to desperation and left with no other recourse, they

will "embark on a dangerous course." I am very much concerned and worried about this.will "embark on a dangerous course." I am very much concerned and worried about this.will "embark on a dangerous course." I am very much concerned and worried about this.will "embark on a dangerous course." I am very much concerned and worried about this.

At the same time, I understand that the Government is economically unAt the same time, I understand that the Government is economically unAt the same time, I understand that the Government is economically unAt the same time, I understand that the Government is economically under pressureder pressureder pressureder pressure

to leave an ample reserve to the government of the Special Administrative Region (SAR)to leave an ample reserve to the government of the Special Administrative Region (SAR)to leave an ample reserve to the government of the Special Administrative Region (SAR)to leave an ample reserve to the government of the Special Administrative Region (SAR)

and to finance the colossal airport project. This is why I plan, during the debateand to finance the colossal airport project. This is why I plan, during the debateand to finance the colossal airport project. This is why I plan, during the debateand to finance the colossal airport project. This is why I plan, during the debate

today, to focus my speech particularly on the loopholes in the tax system, that is,today, to focus my speech particularly on the loopholes in the tax system, that is,today, to focus my speech particularly on the loopholes in the tax system, that is,today, to focus my speech particularly on the loopholes in the tax system, that is,

tax evasion and tax avoidance, which have thwarted the Government's efforts to collecttax evasion and tax avoidance, which have thwarted the Government's efforts to collecttax evasion and tax avoidance, which have thwarted the Government's efforts to collecttax evasion and tax avoidance, which have thwarted the Government's efforts to collect

tax. A paper presented by Commissioner of Inland Revenue, Mr Anthony AU YEUNG totax. A paper presented by Commissioner of Inland Revenue, Mr Anthony AU YEUNG totax. A paper presented by Commissioner of Inland Revenue, Mr Anthony AU YEUNG totax. A paper presented by Commissioner of Inland Revenue, Mr Anthony AU YEUNG to

the Legislative Council's Standing Panel on Finance, Taxation and Monetary Affairsthe Legislative Council's Standing Panel on Finance, Taxation and Monetary Affairsthe Legislative Council's Standing Panel on Finance, Taxation and Monetary Affairsthe Legislative Council's Standing Panel on Finance, Taxation and Monetary Affairs

shows that, last year, between $300 million and $400 million in tax money was recoveredshows that, last year, between $300 million and $400 million in tax money was recoveredshows that, last year, between $300 million and $400 million in tax money was recoveredshows that, last year, between $300 million and $400 million in tax money was recovered

by the Inland Revenue Department from more than 500 tax evasion cases duringby the Inland Revenue Department from more than 500 tax evasion cases duringby the Inland Revenue Department from more than 500 tax evasion cases duringby the Inland Revenue Department from more than 500 tax evasion cases during

investigation. This highlights how urgent it is to plug the loopholes of the taxinvestigation. This highlights how urgent it is to plug the loopholes of the taxinvestigation. This highlights how urgent it is to plug the loopholes of the taxinvestigation. This highlights how urgent it is to plug the loopholes of the tax

system.system.system.system.

First of all, I wish to point out that Hong Kong's civic education is quiteFirst of all, I wish to point out that Hong Kong's civic education is quiteFirst of all, I wish to point out that Hong Kong's civic education is quiteFirst of all, I wish to point out that Hong Kong's civic education is quite

deficient in encouraging citizens to discharge one of their obligations, which isdeficient in encouraging citizens to discharge one of their obligations, which isdeficient in encouraging citizens to discharge one of their obligations, which isdeficient in encouraging citizens to discharge one of their obligations, which is

to pay tax. This is why some people, particularly small merchants, think that theirto pay tax. This is why some people, particularly small merchants, think that theirto pay tax. This is why some people, particularly small merchants, think that theirto pay tax. This is why some people, particularly small merchants, think that their

earnings from business or employment are the fruit of their own labour and have nothingearnings from business or employment are the fruit of their own labour and have nothingearnings from business or employment are the fruit of their own labour and have nothingearnings from business or employment are the fruit of their own labour and have nothing

to do with the Government. The worse is some people even mistakenly think that theyto do with the Government. The worse is some people even mistakenly think that theyto do with the Government. The worse is some people even mistakenly think that theyto do with the Government. The worse is some people even mistakenly think that they

can complete their tax returns just as they like and will not be held responsible.can complete their tax returns just as they like and will not be held responsible.can complete their tax returns just as they like and will not be held responsible.can complete their tax returns just as they like and will not be held responsible.

I hope that the departments concerned will pay closer attention to such misconceivedI hope that the departments concerned will pay closer attention to such misconceivedI hope that the departments concerned will pay closer attention to such misconceivedI hope that the departments concerned will pay closer attention to such misconceived

ideas and step up civic education to enhance citizens' awareness.ideas and step up civic education to enhance citizens' awareness.ideas and step up civic education to enhance citizens' awareness.ideas and step up civic education to enhance citizens' awareness.

Tax evasionTax evasionTax evasionTax evasion

Business practices in Hong Kong have undergone many changes over the years. OurBusiness practices in Hong Kong have undergone many changes over the years. OurBusiness practices in Hong Kong have undergone many changes over the years. OurBusiness practices in Hong Kong have undergone many changes over the years. Our

China trade is booming. Is our Inland Revenue Ordinance able to cope with theChina trade is booming. Is our Inland Revenue Ordinance able to cope with theChina trade is booming. Is our Inland Revenue Ordinance able to cope with theChina trade is booming. Is our Inland Revenue Ordinance able to cope with the

changing times? Expenses incurred in China by Hong Kong businessmen who operate inchanging times? Expenses incurred in China by Hong Kong businessmen who operate inchanging times? Expenses incurred in China by Hong Kong businessmen who operate inchanging times? Expenses incurred in China by Hong Kong businessmen who operate in

both China and Hong Kong would directly affect the cost of operation of their Hongboth China and Hong Kong would directly affect the cost of operation of their Hongboth China and Hong Kong would directly affect the cost of operation of their Hongboth China and Hong Kong would directly affect the cost of operation of their Hong

Kong companies. People familiar with China trade have told me, "It is very easy toKong companies. People familiar with China trade have told me, "It is very easy toKong companies. People familiar with China trade have told me, "It is very easy toKong companies. People familiar with China trade have told me, "It is very easy to

secure blank receipts." I would like to ask the Inland Revenue Department: Is thesecure blank receipts." I would like to ask the Inland Revenue Department: Is thesecure blank receipts." I would like to ask the Inland Revenue Department: Is thesecure blank receipts." I would like to ask the Inland Revenue Department: Is the

Department aware of this malpractice? What initiatives have been taken for pluggingDepartment aware of this malpractice? What initiatives have been taken for pluggingDepartment aware of this malpractice? What initiatives have been taken for pluggingDepartment aware of this malpractice? What initiatives have been taken for plugging

the loophole?the loophole?the loophole?the loophole?

China tradeChina tradeChina tradeChina trade is but one factor contributory to the transformation of our economy. is but one factor contributory to the transformation of our economy. is but one factor contributory to the transformation of our economy. is but one factor contributory to the transformation of our economy.

Setting up production lines in China is also very common. It is generally known asSetting up production lines in China is also very common. It is generally known asSetting up production lines in China is also very common. It is generally known asSetting up production lines in China is also very common. It is generally known as

"off-shore manufacturing.""off-shore manufacturing.""off-shore manufacturing.""off-shore manufacturing."

Hong Kong's tax system has all along encouraged business development. PHong Kong's tax system has all along encouraged business development. PHong Kong's tax system has all along encouraged business development. PHong Kong's tax system has all along encouraged business development. Profitsrofitsrofitsrofits

not derived from Hong Kong are not liable to be taxed. It is precisely such anot derived from Hong Kong are not liable to be taxed. It is precisely such anot derived from Hong Kong are not liable to be taxed. It is precisely such anot derived from Hong Kong are not liable to be taxed. It is precisely such a

principle that enables unscrupulous entrepreneurs to avoid tax. Some friends in theprinciple that enables unscrupulous entrepreneurs to avoid tax. Some friends in theprinciple that enables unscrupulous entrepreneurs to avoid tax. Some friends in theprinciple that enables unscrupulous entrepreneurs to avoid tax. Some friends in the

accounting profession have told me that manufacturers are often able to obtainaccounting profession have told me that manufacturers are often able to obtainaccounting profession have told me that manufacturers are often able to obtainaccounting profession have told me that manufacturers are often able to obtain

receipts as evidence of operational expenses that are higher than the actualreceipts as evidence of operational expenses that are higher than the actualreceipts as evidence of operational expenses that are higher than the actualreceipts as evidence of operational expenses that are higher than the actual

operational expenses with a view to artificially reducing the amount of their Hongoperational expenses with a view to artificially reducing the amount of their Hongoperational expenses with a view to artificially reducing the amount of their Hongoperational expenses with a view to artificially reducing the amount of their Hong

Kong-derived profits. As such, the tax due from them is greatly reduced, causingKong-derived profits. As such, the tax due from them is greatly reduced, causingKong-derived profits. As such, the tax due from them is greatly reduced, causingKong-derived profits. As such, the tax due from them is greatly reduced, causing

loss to the Government in tax revenue.loss to the Government in tax revenue.loss to the Government in tax revenue.loss to the Government in tax revenue.

For off-shore trading and manufacturing operations, tax avoidance takes manyFor off-shore trading and manufacturing operations, tax avoidance takes manyFor off-shore trading and manufacturing operations, tax avoidance takes manyFor off-shore trading and manufacturing operations, tax avoidance takes many

forms. Those mentioned above, I am afraid, are just the tip of the iceberg. I haveforms. Those mentioned above, I am afraid, are just the tip of the iceberg. I haveforms. Those mentioned above, I am afraid, are just the tip of the iceberg. I haveforms. Those mentioned above, I am afraid, are just the tip of the iceberg. I have

reason to believe that Inland Revenue Department is much more informed about suchreason to believe that Inland Revenue Department is much more informed about suchreason to believe that Inland Revenue Department is much more informed about suchreason to believe that Inland Revenue Department is much more informed about such

things than I am. I wonder why it has yet to find any means to outlaw such tax evasion.things than I am. I wonder why it has yet to find any means to outlaw such tax evasion.things than I am. I wonder why it has yet to find any means to outlaw such tax evasion.things than I am. I wonder why it has yet to find any means to outlaw such tax evasion.

Is the Department at its wits' end because the present tax system has fallen behindIs the Department at its wits' end because the present tax system has fallen behindIs the Department at its wits' end because the present tax system has fallen behindIs the Department at its wits' end because the present tax system has fallen behind

times, or is it refraining from taking action as a matter of policy? I hope thattimes, or is it refraining from taking action as a matter of policy? I hope thattimes, or is it refraining from taking action as a matter of policy? I hope thattimes, or is it refraining from taking action as a matter of policy? I hope that

the Commissioner of Inland Revenue will give me a response.the Commissioner of Inland Revenue will give me a response.the Commissioner of Inland Revenue will give me a response.the Commissioner of Inland Revenue will give me a response.

I would like to focus attention on another kind of tax evasion which can be foundI would like to focus attention on another kind of tax evasion which can be foundI would like to focus attention on another kind of tax evasion which can be foundI would like to focus attention on another kind of tax evasion which can be found

in those businesses involving instant payments in cash. For instant payments in cash,in those businesses involving instant payments in cash. For instant payments in cash,in those businesses involving instant payments in cash. For instant payments in cash,in those businesses involving instant payments in cash. For instant payments in cash,

either no receipts would be issued or receipts that are issued can be easily tamperedeither no receipts would be issued or receipts that are issued can be easily tamperedeither no receipts would be issued or receipts that are issued can be easily tamperedeither no receipts would be issued or receipts that are issued can be easily tampered

with to show smaller amounts than actually received. This makes auditing extremelywith to show smaller amounts than actually received. This makes auditing extremelywith to show smaller amounts than actually received. This makes auditing extremelywith to show smaller amounts than actually received. This makes auditing extremely

difficult, neither is it easy for due tax to be collected.difficult, neither is it easy for due tax to be collected.difficult, neither is it easy for due tax to be collected.difficult, neither is it easy for due tax to be collected.

To curb such tax evasion, the Inland ReveTo curb such tax evasion, the Inland ReveTo curb such tax evasion, the Inland ReveTo curb such tax evasion, the Inland Revenue Department has implemented a "fieldnue Department has implemented a "fieldnue Department has implemented a "fieldnue Department has implemented a "field

audit" system under which officials from the department can gain direct access toaudit" system under which officials from the department can gain direct access toaudit" system under which officials from the department can gain direct access toaudit" system under which officials from the department can gain direct access to

the financial records of tax-payers and require them to answer questions. I believethe financial records of tax-payers and require them to answer questions. I believethe financial records of tax-payers and require them to answer questions. I believethe financial records of tax-payers and require them to answer questions. I believe

that "field audit" is an effective way of dealing with businesses which involvethat "field audit" is an effective way of dealing with businesses which involvethat "field audit" is an effective way of dealing with businesses which involvethat "field audit" is an effective way of dealing with businesses which involve

instant payments in cash. I hope that the Inland Revenue Department will deploy itsinstant payments in cash. I hope that the Inland Revenue Department will deploy itsinstant payments in cash. I hope that the Inland Revenue Department will deploy itsinstant payments in cash. I hope that the Inland Revenue Department will deploy its

resources in such a way as to beef up the implementation of "field audit" to reduceresources in such a way as to beef up the implementation of "field audit" to reduceresources in such a way as to beef up the implementation of "field audit" to reduceresources in such a way as to beef up the implementation of "field audit" to reduce

tax evasion.tax evasion.tax evasion.tax evasion.

I pin enormous hope on the "field audit" I pin enormous hope on the "field audit" I pin enormous hope on the "field audit" I pin enormous hope on the "field audit" system. However, upon closersystem. However, upon closersystem. However, upon closersystem. However, upon closer

examination of the system, I am surprised to find that "field audit" is carried outexamination of the system, I am surprised to find that "field audit" is carried outexamination of the system, I am surprised to find that "field audit" is carried outexamination of the system, I am surprised to find that "field audit" is carried out

on an appointment basis and not on an unannounced visit basis. Would this not giveon an appointment basis and not on an unannounced visit basis. Would this not giveon an appointment basis and not on an unannounced visit basis. Would this not giveon an appointment basis and not on an unannounced visit basis. Would this not give

the relevant taxpayers the time to make such preparations that the effectiveness ofthe relevant taxpayers the time to make such preparations that the effectiveness ofthe relevant taxpayers the time to make such preparations that the effectiveness ofthe relevant taxpayers the time to make such preparations that the effectiveness of

the field audit would be undermined?the field audit would be undermined?the field audit would be undermined?the field audit would be undermined?

Apart from the two major areas mentioned above, attention should also be paidApart from the two major areas mentioned above, attention should also be paidApart from the two major areas mentioned above, attention should also be paidApart from the two major areas mentioned above, attention should also be paid

to the flow of emigration. The Commissioner of Inland Revenue is of the view thatto the flow of emigration. The Commissioner of Inland Revenue is of the view thatto the flow of emigration. The Commissioner of Inland Revenue is of the view thatto the flow of emigration. The Commissioner of Inland Revenue is of the view that

the Government's revenue loss due to emigration would not pose a serious problem inthe Government's revenue loss due to emigration would not pose a serious problem inthe Government's revenue loss due to emigration would not pose a serious problem inthe Government's revenue loss due to emigration would not pose a serious problem in

1991-92. Yet information available shows that, as 1997 draws near, large numbers1991-92. Yet information available shows that, as 1997 draws near, large numbers1991-92. Yet information available shows that, as 1997 draws near, large numbers1991-92. Yet information available shows that, as 1997 draws near, large numbers

of Hong Kong people may emigrate. I hope that the authorities will keep a close watchof Hong Kong people may emigrate. I hope that the authorities will keep a close watchof Hong Kong people may emigrate. I hope that the authorities will keep a close watchof Hong Kong people may emigrate. I hope that the authorities will keep a close watch

on how the public revenue is affected in this area.on how the public revenue is affected in this area.on how the public revenue is affected in this area.on how the public revenue is affected in this area.

Tax avoidanceTax avoidanceTax avoidanceTax avoidance

When I was preparing the tax avoidance part of my speech, many people remindedWhen I was preparing the tax avoidance part of my speech, many people remindedWhen I was preparing the tax avoidance part of my speech, many people remindedWhen I was preparing the tax avoidance part of my speech, many people reminded

me that ordinances to prevent tax avoidance should not be like a sword of Damoclesme that ordinances to prevent tax avoidance should not be like a sword of Damoclesme that ordinances to prevent tax avoidance should not be like a sword of Damoclesme that ordinances to prevent tax avoidance should not be like a sword of Damocles

over the heads of the businessmen because this would hamper Hong Kong's economicover the heads of the businessmen because this would hamper Hong Kong's economicover the heads of the businessmen because this would hamper Hong Kong's economicover the heads of the businessmen because this would hamper Hong Kong's economic

development. I must make it clear here that the United Democrats of Hong Kong anddevelopment. I must make it clear here that the United Democrats of Hong Kong anddevelopment. I must make it clear here that the United Democrats of Hong Kong anddevelopment. I must make it clear here that the United Democrats of Hong Kong and

myself are not against big businessmen or tycoons. We believe that a society ismyself are not against big businessmen or tycoons. We believe that a society ismyself are not against big businessmen or tycoons. We believe that a society ismyself are not against big businessmen or tycoons. We believe that a society is

composed of various classes of people, each with its own room for reasonable existencecomposed of various classes of people, each with its own room for reasonable existencecomposed of various classes of people, each with its own room for reasonable existencecomposed of various classes of people, each with its own room for reasonable existence

and development. We are not calling for class struggle. What we oppose is an unjustand development. We are not calling for class struggle. What we oppose is an unjustand development. We are not calling for class struggle. What we oppose is an unjustand development. We are not calling for class struggle. What we oppose is an unjust

social system that shows no due respect to human dignity. I have no intentionsocial system that shows no due respect to human dignity. I have no intentionsocial system that shows no due respect to human dignity. I have no intentionsocial system that shows no due respect to human dignity. I have no intention

whatsoever to upset Hong Kong's economic development. I merely wish to point outwhatsoever to upset Hong Kong's economic development. I merely wish to point outwhatsoever to upset Hong Kong's economic development. I merely wish to point outwhatsoever to upset Hong Kong's economic development. I merely wish to point out

that the revenue loss stemmed from tax avoidance by big businessmen and tycoons oftenthat the revenue loss stemmed from tax avoidance by big businessmen and tycoons oftenthat the revenue loss stemmed from tax avoidance by big businessmen and tycoons oftenthat the revenue loss stemmed from tax avoidance by big businessmen and tycoons often

must be borne by the general public. This is unfair. I strongly appeal to themust be borne by the general public. This is unfair. I strongly appeal to themust be borne by the general public. This is unfair. I strongly appeal to themust be borne by the general public. This is unfair. I strongly appeal to the

entrepreneurs to follow their conscience. All must do their individual best to makeentrepreneurs to follow their conscience. All must do their individual best to makeentrepreneurs to follow their conscience. All must do their individual best to makeentrepreneurs to follow their conscience. All must do their individual best to make

the territory a better and more harmonious place to live.the territory a better and more harmonious place to live.the territory a better and more harmonious place to live.the territory a better and more harmonious place to live.

So, as far as tax avoidance is concerned, I wish to draw the businessmen'sSo, as far as tax avoidance is concerned, I wish to draw the businessmen'sSo, as far as tax avoidance is concerned, I wish to draw the businessmen'sSo, as far as tax avoidance is concerned, I wish to draw the businessmen's

attention to the fact that the Government does have a sword that is to be used toattention to the fact that the Government does have a sword that is to be used toattention to the fact that the Government does have a sword that is to be used toattention to the fact that the Government does have a sword that is to be used to

curb tax avoidance.curb tax avoidance.curb tax avoidance.curb tax avoidance.

Hong Kong's pHong Kong's pHong Kong's pHong Kong's profits tax rate is among the lowest in the world. In his Budget,rofits tax rate is among the lowest in the world. In his Budget,rofits tax rate is among the lowest in the world. In his Budget,rofits tax rate is among the lowest in the world. In his Budget,

the Financial Secretary proposes to raise it by one percentage point. This proposalthe Financial Secretary proposes to raise it by one percentage point. This proposalthe Financial Secretary proposes to raise it by one percentage point. This proposalthe Financial Secretary proposes to raise it by one percentage point. This proposal

has met with criticism from the business circles, who say that it will deal a blowhas met with criticism from the business circles, who say that it will deal a blowhas met with criticism from the business circles, who say that it will deal a blowhas met with criticism from the business circles, who say that it will deal a blow

to investors' confidence. I have on hand a list of the 33 companies whose stocksto investors' confidence. I have on hand a list of the 33 companies whose stocksto investors' confidence. I have on hand a list of the 33 companies whose stocksto investors' confidence. I have on hand a list of the 33 companies whose stocks

make up the Hang Seng Index. Most of them are among Hong Kong's largest companies.make up the Hang Seng Index. Most of them are among Hong Kong's largest companies.make up the Hang Seng Index. Most of them are among Hong Kong's largest companies.make up the Hang Seng Index. Most of them are among Hong Kong's largest companies.

A rough computation shows that these 33 companies in 1989, 1990 and 1991 paid profitsA rough computation shows that these 33 companies in 1989, 1990 and 1991 paid profitsA rough computation shows that these 33 companies in 1989, 1990 and 1991 paid profitsA rough computation shows that these 33 companies in 1989, 1990 and 1991 paid profits

taxes at the rate of only about 10% of their earnings, which is far lower than thetaxes at the rate of only about 10% of their earnings, which is far lower than thetaxes at the rate of only about 10% of their earnings, which is far lower than thetaxes at the rate of only about 10% of their earnings, which is far lower than the

official rate of 16.5%. I understand that some of their earnings were group earningsofficial rate of 16.5%. I understand that some of their earnings were group earningsofficial rate of 16.5%. I understand that some of their earnings were group earningsofficial rate of 16.5%. I understand that some of their earnings were group earnings

derived from "off-shore operations" and, as such, were not taxable. Still, ourderived from "off-shore operations" and, as such, were not taxable. Still, ourderived from "off-shore operations" and, as such, were not taxable. Still, ourderived from "off-shore operations" and, as such, were not taxable. Still, our

figures show that, in 1989, the profits tax paid by some companies was at a rate asfigures show that, in 1989, the profits tax paid by some companies was at a rate asfigures show that, in 1989, the profits tax paid by some companies was at a rate asfigures show that, in 1989, the profits tax paid by some companies was at a rate as

low as 5.1% and in 1990 the rate was even lower at 1.4% in the case of some companies.low as 5.1% and in 1990 the rate was even lower at 1.4% in the case of some companies.low as 5.1% and in 1990 the rate was even lower at 1.4% in the case of some companies.low as 5.1% and in 1990 the rate was even lower at 1.4% in the case of some companies.

We cannot afford to ignore such a problem. Business people use different ways toWe cannot afford to ignore such a problem. Business people use different ways toWe cannot afford to ignore such a problem. Business people use different ways toWe cannot afford to ignore such a problem. Business people use different ways to

evade tax. Together, each year they avoid billions of dollars of tax. Besides,evade tax. Together, each year they avoid billions of dollars of tax. Besides,evade tax. Together, each year they avoid billions of dollars of tax. Besides,evade tax. Together, each year they avoid billions of dollars of tax. Besides,

their books do not show revenues from off-shore operations, in which they have antheir books do not show revenues from off-shore operations, in which they have antheir books do not show revenues from off-shore operations, in which they have antheir books do not show revenues from off-shore operations, in which they have an

interest.interest.interest.interest.

Audit rules and guidelines can play a very important part in tackling taxAudit rules and guidelines can play a very important part in tackling taxAudit rules and guidelines can play a very important part in tackling taxAudit rules and guidelines can play a very important part in tackling tax

avoidance. However, some friends in the accounting profession have told me that itavoidance. However, some friends in the accounting profession have told me that itavoidance. However, some friends in the accounting profession have told me that itavoidance. However, some friends in the accounting profession have told me that it

is often possible for particulars in a company's books to escape notice. Take a penis often possible for particulars in a company's books to escape notice. Take a penis often possible for particulars in a company's books to escape notice. Take a penis often possible for particulars in a company's books to escape notice. Take a pen

with a cost of $1.40 as an example. The breakdown may go like this: 20 cents forwith a cost of $1.40 as an example. The breakdown may go like this: 20 cents forwith a cost of $1.40 as an example. The breakdown may go like this: 20 cents forwith a cost of $1.40 as an example. The breakdown may go like this: 20 cents for

designing fee, 20 cents for market research fee and one dollar for material. If itdesigning fee, 20 cents for market research fee and one dollar for material. If itdesigning fee, 20 cents for market research fee and one dollar for material. If itdesigning fee, 20 cents for market research fee and one dollar for material. If it

is sold for $2, the profit is 60 cents. However, in the book, it can be entered simplyis sold for $2, the profit is 60 cents. However, in the book, it can be entered simplyis sold for $2, the profit is 60 cents. However, in the book, it can be entered simplyis sold for $2, the profit is 60 cents. However, in the book, it can be entered simply

that the manufacturing cost is $1.40. And the Inland Revenue Department will notthat the manufacturing cost is $1.40. And the Inland Revenue Department will notthat the manufacturing cost is $1.40. And the Inland Revenue Department will notthat the manufacturing cost is $1.40. And the Inland Revenue Department will not

ask for the breakdown. Thus, arrangements could be easily made so that suspiciousask for the breakdown. Thus, arrangements could be easily made so that suspiciousask for the breakdown. Thus, arrangements could be easily made so that suspiciousask for the breakdown. Thus, arrangements could be easily made so that suspicious

items may escape tax officials' detection.items may escape tax officials' detection.items may escape tax officials' detection.items may escape tax officials' detection.

Therefore, the audit rules and guidelines must be kept under regular review toTherefore, the audit rules and guidelines must be kept under regular review toTherefore, the audit rules and guidelines must be kept under regular review toTherefore, the audit rules and guidelines must be kept under regular review to

see if they can cope with the ever changing modes of business operations, so thatsee if they can cope with the ever changing modes of business operations, so thatsee if they can cope with the ever changing modes of business operations, so thatsee if they can cope with the ever changing modes of business operations, so that

auditors will not be able to help companies to avoid tax by manipulating some ambiguousauditors will not be able to help companies to avoid tax by manipulating some ambiguousauditors will not be able to help companies to avoid tax by manipulating some ambiguousauditors will not be able to help companies to avoid tax by manipulating some ambiguous

rules.rules.rules.rules.

Among all forms of tax avoidance, the malpractice concerning estate duty hasAmong all forms of tax avoidance, the malpractice concerning estate duty hasAmong all forms of tax avoidance, the malpractice concerning estate duty hasAmong all forms of tax avoidance, the malpractice concerning estate duty has

started to come under fire. Why? The reason is that estate duty has been mockinglystarted to come under fire. Why? The reason is that estate duty has been mockinglystarted to come under fire. Why? The reason is that estate duty has been mockinglystarted to come under fire. Why? The reason is that estate duty has been mockingly

referred to as "voluntary tax" or a kind of tax that only the small citizens havereferred to as "voluntary tax" or a kind of tax that only the small citizens havereferred to as "voluntary tax" or a kind of tax that only the small citizens havereferred to as "voluntary tax" or a kind of tax that only the small citizens have

to pay, whereas most of those who are really rich (such as people worth tens of millionsto pay, whereas most of those who are really rich (such as people worth tens of millionsto pay, whereas most of those who are really rich (such as people worth tens of millionsto pay, whereas most of those who are really rich (such as people worth tens of millions

of dollars) have plans long in place to avoid tax and after they die, theirof dollars) have plans long in place to avoid tax and after they die, theirof dollars) have plans long in place to avoid tax and after they die, theirof dollars) have plans long in place to avoid tax and after they die, their

beneficiaries will not have to pay a cent in estate duty. Only the beneficiariesbeneficiaries will not have to pay a cent in estate duty. Only the beneficiariesbeneficiaries will not have to pay a cent in estate duty. Only the beneficiariesbeneficiaries will not have to pay a cent in estate duty. Only the beneficiaries

of those with property just exceeding $4 million (perhaps retired people owning oneof those with property just exceeding $4 million (perhaps retired people owning oneof those with property just exceeding $4 million (perhaps retired people owning oneof those with property just exceeding $4 million (perhaps retired people owning one

flat or two) who do not have a plan to avoid estate duty, will have to pay estateflat or two) who do not have a plan to avoid estate duty, will have to pay estateflat or two) who do not have a plan to avoid estate duty, will have to pay estateflat or two) who do not have a plan to avoid estate duty, will have to pay estate

duty of between several hundred thousand dollars and as much as $1 million.duty of between several hundred thousand dollars and as much as $1 million.duty of between several hundred thousand dollars and as much as $1 million.duty of between several hundred thousand dollars and as much as $1 million.

Tax evasion often incurs a public revenue loss of several billion dollars. IfTax evasion often incurs a public revenue loss of several billion dollars. IfTax evasion often incurs a public revenue loss of several billion dollars. IfTax evasion often incurs a public revenue loss of several billion dollars. If

the Inland Revenue Department is really serious about fighting tax avoidance, Ithe Inland Revenue Department is really serious about fighting tax avoidance, Ithe Inland Revenue Department is really serious about fighting tax avoidance, Ithe Inland Revenue Department is really serious about fighting tax avoidance, I

believe the coffers will certainly be boosted by a substantial amount of due tax money.believe the coffers will certainly be boosted by a substantial amount of due tax money.believe the coffers will certainly be boosted by a substantial amount of due tax money.believe the coffers will certainly be boosted by a substantial amount of due tax money.

Apart from stopping different kinds of tax evasion, effective tax collectionApart from stopping different kinds of tax evasion, effective tax collectionApart from stopping different kinds of tax evasion, effective tax collectionApart from stopping different kinds of tax evasion, effective tax collection

measures can also swell the coffers.measures can also swell the coffers.measures can also swell the coffers.measures can also swell the coffers.

Going after those who owe taxGoing after those who owe taxGoing after those who owe taxGoing after those who owe tax

The intense property speculation in recent years has given rise to The intense property speculation in recent years has given rise to The intense property speculation in recent years has given rise to The intense property speculation in recent years has given rise to a large numbera large numbera large numbera large number

of cases of unpaid profits tax. The Inland Revenue should take swift action to followof cases of unpaid profits tax. The Inland Revenue should take swift action to followof cases of unpaid profits tax. The Inland Revenue should take swift action to followof cases of unpaid profits tax. The Inland Revenue should take swift action to follow

up on the cases. In the course of action, if it is found that the existing statutesup on the cases. In the course of action, if it is found that the existing statutesup on the cases. In the course of action, if it is found that the existing statutesup on the cases. In the course of action, if it is found that the existing statutes

have some grey areas which may lead to disputes and enforcement difficulties, suchhave some grey areas which may lead to disputes and enforcement difficulties, suchhave some grey areas which may lead to disputes and enforcement difficulties, suchhave some grey areas which may lead to disputes and enforcement difficulties, such

as the difficulty to determine whether income from the buying and selling of flatsas the difficulty to determine whether income from the buying and selling of flatsas the difficulty to determine whether income from the buying and selling of flatsas the difficulty to determine whether income from the buying and selling of flats

should be regarded as capital gains or profits from speculation, the Government shouldshould be regarded as capital gains or profits from speculation, the Government shouldshould be regarded as capital gains or profits from speculation, the Government shouldshould be regarded as capital gains or profits from speculation, the Government should

accordingly review and revise the relevant ordinances. Besides, recommendations byaccordingly review and revise the relevant ordinances. Besides, recommendations byaccordingly review and revise the relevant ordinances. Besides, recommendations byaccordingly review and revise the relevant ordinances. Besides, recommendations by

the Taxation Institute of Hong Kong should be given serious consideration andthe Taxation Institute of Hong Kong should be given serious consideration andthe Taxation Institute of Hong Kong should be given serious consideration andthe Taxation Institute of Hong Kong should be given serious consideration and

legislation should be introduced to provide that the resale of a flat within a certainlegislation should be introduced to provide that the resale of a flat within a certainlegislation should be introduced to provide that the resale of a flat within a certainlegislation should be introduced to provide that the resale of a flat within a certain

time limit shall be presumed to be speculation and the profit is taxable.time limit shall be presumed to be speculation and the profit is taxable.time limit shall be presumed to be speculation and the profit is taxable.time limit shall be presumed to be speculation and the profit is taxable.

TheTheTheThe Inland Revenue Department is performing an important duty entrusted to it Inland Revenue Department is performing an important duty entrusted to it Inland Revenue Department is performing an important duty entrusted to it Inland Revenue Department is performing an important duty entrusted to it

by the Government, namely, collecting tax for the Government. In face of theby the Government, namely, collecting tax for the Government. In face of theby the Government, namely, collecting tax for the Government. In face of theby the Government, namely, collecting tax for the Government. In face of the

increasingly sophisticated methods tax evasion and avoidance practices used byincreasingly sophisticated methods tax evasion and avoidance practices used byincreasingly sophisticated methods tax evasion and avoidance practices used byincreasingly sophisticated methods tax evasion and avoidance practices used by

businesses and individuals, the Inland Revenue Department should consider adoptingbusinesses and individuals, the Inland Revenue Department should consider adoptingbusinesses and individuals, the Inland Revenue Department should consider adoptingbusinesses and individuals, the Inland Revenue Department should consider adopting

counter-measures of all kinds, including the increased use of computers.counter-measures of all kinds, including the increased use of computers.counter-measures of all kinds, including the increased use of computers.counter-measures of all kinds, including the increased use of computers.

Another matter is tax assessment. The Inland Revenue Department always favoursAnother matter is tax assessment. The Inland Revenue Department always favoursAnother matter is tax assessment. The Inland Revenue Department always favoursAnother matter is tax assessment. The Inland Revenue Department always favours

the recruitment of junior tax assessors, with a view to promoting them to seniorthe recruitment of junior tax assessors, with a view to promoting them to seniorthe recruitment of junior tax assessors, with a view to promoting them to seniorthe recruitment of junior tax assessors, with a view to promoting them to senior

assessors or even higher positions. The advantage of this is that the promotionassessors or even higher positions. The advantage of this is that the promotionassessors or even higher positions. The advantage of this is that the promotionassessors or even higher positions. The advantage of this is that the promotion

prospect is good. But there are also some disadvantages. Firstly, the tax assessors,prospect is good. But there are also some disadvantages. Firstly, the tax assessors,prospect is good. But there are also some disadvantages. Firstly, the tax assessors,prospect is good. But there are also some disadvantages. Firstly, the tax assessors,

as fresh graduates, do not have up-to-date information on how businesses evade tax.as fresh graduates, do not have up-to-date information on how businesses evade tax.as fresh graduates, do not have up-to-date information on how businesses evade tax.as fresh graduates, do not have up-to-date information on how businesses evade tax.

It is hard for them to uncover the loopholes that are being exploited by tax evasionIt is hard for them to uncover the loopholes that are being exploited by tax evasionIt is hard for them to uncover the loopholes that are being exploited by tax evasionIt is hard for them to uncover the loopholes that are being exploited by tax evasion

experts. Secondly, astute tax assessors, after receiving training in the Inlandexperts. Secondly, astute tax assessors, after receiving training in the Inlandexperts. Secondly, astute tax assessors, after receiving training in the Inlandexperts. Secondly, astute tax assessors, after receiving training in the Inland

Revenue Department, are likely to be poached by private firms once their talent wasRevenue Department, are likely to be poached by private firms once their talent wasRevenue Department, are likely to be poached by private firms once their talent wasRevenue Department, are likely to be poached by private firms once their talent was

spotted. This is why the Inland Revenue Department should review its recruitmentspotted. This is why the Inland Revenue Department should review its recruitmentspotted. This is why the Inland Revenue Department should review its recruitmentspotted. This is why the Inland Revenue Department should review its recruitment

policy and keep it flexible. Thirdly, the Inland Revenue Department may wellpolicy and keep it flexible. Thirdly, the Inland Revenue Department may wellpolicy and keep it flexible. Thirdly, the Inland Revenue Department may wellpolicy and keep it flexible. Thirdly, the Inland Revenue Department may well

consider commissioning professional accountants who have in-depth knowledge of taxconsider commissioning professional accountants who have in-depth knowledge of taxconsider commissioning professional accountants who have in-depth knowledge of taxconsider commissioning professional accountants who have in-depth knowledge of tax

evasion as consultants to study ways to fight tax evasion and tax avoidance and giveevasion as consultants to study ways to fight tax evasion and tax avoidance and giveevasion as consultants to study ways to fight tax evasion and tax avoidance and giveevasion as consultants to study ways to fight tax evasion and tax avoidance and give

the department an idea of the current tax evasion trends. The aim is to heightenthe department an idea of the current tax evasion trends. The aim is to heightenthe department an idea of the current tax evasion trends. The aim is to heightenthe department an idea of the current tax evasion trends. The aim is to heighten

the department's awareness of the problems.the department's awareness of the problems.the department's awareness of the problems.the department's awareness of the problems.

Now, I have spent a lot ofNow, I have spent a lot ofNow, I have spent a lot ofNow, I have spent a lot of time talking about the problems of tax evasion and time talking about the problems of tax evasion and time talking about the problems of tax evasion and time talking about the problems of tax evasion and

avoidance. Together with the United Democrats of Hong Kong and the general public,avoidance. Together with the United Democrats of Hong Kong and the general public,avoidance. Together with the United Democrats of Hong Kong and the general public,avoidance. Together with the United Democrats of Hong Kong and the general public,

I seriously hope that the Inland Revenue Department and the Financial Secretary willI seriously hope that the Inland Revenue Department and the Financial Secretary willI seriously hope that the Inland Revenue Department and the Financial Secretary willI seriously hope that the Inland Revenue Department and the Financial Secretary will

study ways to fight tax evasion and avoidance, so that the Government may recoverstudy ways to fight tax evasion and avoidance, so that the Government may recoverstudy ways to fight tax evasion and avoidance, so that the Government may recoverstudy ways to fight tax evasion and avoidance, so that the Government may recover

tax that is due to it and thus refrain from shifting the tax burden to thetax that is due to it and thus refrain from shifting the tax burden to thetax that is due to it and thus refrain from shifting the tax burden to thetax that is due to it and thus refrain from shifting the tax burden to the

salary-earning class. I respect our entrepreneurs' conscience and believe that theysalary-earning class. I respect our entrepreneurs' conscience and believe that theysalary-earning class. I respect our entrepreneurs' conscience and believe that theysalary-earning class. I respect our entrepreneurs' conscience and believe that they

will not regard Hong Kong merely as a money-making paradise to which they have nowill not regard Hong Kong merely as a money-making paradise to which they have nowill not regard Hong Kong merely as a money-making paradise to which they have nowill not regard Hong Kong merely as a money-making paradise to which they have no

social obligation.social obligation.social obligation.social obligation.

Apart from taxation, another question of late troubling the public is law andApart from taxation, another question of late troubling the public is law andApart from taxation, another question of late troubling the public is law andApart from taxation, another question of late troubling the public is law and

order, particularly the question of public spending on the maintenance of law andorder, particularly the question of public spending on the maintenance of law andorder, particularly the question of public spending on the maintenance of law andorder, particularly the question of public spending on the maintenance of law and

order.order.order.order.

8.00 pm8.00 pm8.00 pm8.00 pm

DEPUTY PRESIDENT: It is now eight o'clock and under Standing Order 8(2) the CouncilDEPUTY PRESIDENT: It is now eight o'clock and under Standing Order 8(2) the CouncilDEPUTY PRESIDENT: It is now eight o'clock and under Standing Order 8(2) the CouncilDEPUTY PRESIDENT: It is now eight o'clock and under Standing Order 8(2) the Council

should adjourn.should adjourn.should adjourn.should adjourn.

ATTORNEY GENERAL: Mr Deputy President, with your consent, I move that Standing OrderATTORNEY GENERAL: Mr Deputy President, with your consent, I move that Standing OrderATTORNEY GENERAL: Mr Deputy President, with your consent, I move that Standing OrderATTORNEY GENERAL: Mr Deputy President, with your consent, I move that Standing Order

8(2) should be suspended so as to allow the Council's business this afternoon to be8(2) should be suspended so as to allow the Council's business this afternoon to be8(2) should be suspended so as to allow the Council's business this afternoon to be8(2) should be suspended so as to allow the Council's business this afternoon to be

concluded.concluded.concluded.concluded.

Question proposed, put and agreed to.Question proposed, put and agreed to.Question proposed, put and agreed to.Question proposed, put and agreed to.

MR JAMES TO (in Cantonese): As the spokesman for the Security Committee of the UnitedMR JAMES TO (in Cantonese): As the spokesman for the Security Committee of the UnitedMR JAMES TO (in Cantonese): As the spokesman for the Security Committee of the UnitedMR JAMES TO (in Cantonese): As the spokesman for the Security Committee of the United

Democrats of Hong Kong, I am concerned and disturbed by the recent armed robberies.Democrats of Hong Kong, I am concerned and disturbed by the recent armed robberies.Democrats of Hong Kong, I am concerned and disturbed by the recent armed robberies.Democrats of Hong Kong, I am concerned and disturbed by the recent armed robberies.

The recent spate of serious crimes suchThe recent spate of serious crimes suchThe recent spate of serious crimes suchThe recent spate of serious crimes such as armed robbery, car theft and smuggling as armed robbery, car theft and smuggling as armed robbery, car theft and smuggling as armed robbery, car theft and smuggling

are obviously inflicting serious losses on the victims but we must not overlook theirare obviously inflicting serious losses on the victims but we must not overlook theirare obviously inflicting serious losses on the victims but we must not overlook theirare obviously inflicting serious losses on the victims but we must not overlook their

impact on the community as a whole.impact on the community as a whole.impact on the community as a whole.impact on the community as a whole.

For instance, the rampant car thefts have led to sharply increased premiums,For instance, the rampant car thefts have led to sharply increased premiums,For instance, the rampant car thefts have led to sharply increased premiums,For instance, the rampant car thefts have led to sharply increased premiums,

resulting in the car owners having to spend more money and to accept additional termsresulting in the car owners having to spend more money and to accept additional termsresulting in the car owners having to spend more money and to accept additional termsresulting in the car owners having to spend more money and to accept additional terms

of insurance with reduced protection for them. The insurance companies are alsoof insurance with reduced protection for them. The insurance companies are alsoof insurance with reduced protection for them. The insurance companies are alsoof insurance with reduced protection for them. The insurance companies are also

affected as they are being exposed to greater risks. The deterioration of law andaffected as they are being exposed to greater risks. The deterioration of law andaffected as they are being exposed to greater risks. The deterioration of law andaffected as they are being exposed to greater risks. The deterioration of law and

order certainly has a direct impact on the general public.order certainly has a direct impact on the general public.order certainly has a direct impact on the general public.order certainly has a direct impact on the general public.

This is why I think that effective and swift action must be taken to wipe outThis is why I think that effective and swift action must be taken to wipe outThis is why I think that effective and swift action must be taken to wipe outThis is why I think that effective and swift action must be taken to wipe out

these crimes.these crimes.these crimes.these crimes.

Fighting crime has always been the mission of the police force. But I think thatFighting crime has always been the mission of the police force. But I think thatFighting crime has always been the mission of the police force. But I think thatFighting crime has always been the mission of the police force. But I think that

we should set a priority in combating crimes and it is very important for the policewe should set a priority in combating crimes and it is very important for the policewe should set a priority in combating crimes and it is very important for the policewe should set a priority in combating crimes and it is very important for the police

to make effective use of its resources.to make effective use of its resources.to make effective use of its resources.to make effective use of its resources.

Besides, it is necessary to establish a modern police force. I am particularlyBesides, it is necessary to establish a modern police force. I am particularlyBesides, it is necessary to establish a modern police force. I am particularlyBesides, it is necessary to establish a modern police force. I am particularly

concerned about the pace of computerization of the police force.concerned about the pace of computerization of the police force.concerned about the pace of computerization of the police force.concerned about the pace of computerization of the police force.

However, upon closerHowever, upon closerHowever, upon closerHowever, upon closer examination of police spending in the 1992-93 Budget, I find examination of police spending in the 1992-93 Budget, I find examination of police spending in the 1992-93 Budget, I find examination of police spending in the 1992-93 Budget, I find

that police spending will receive a nominal 6.4% increase but, allowing for inflation,that police spending will receive a nominal 6.4% increase but, allowing for inflation,that police spending will receive a nominal 6.4% increase but, allowing for inflation,that police spending will receive a nominal 6.4% increase but, allowing for inflation,

there will be no real increase in the 1992-93. In fact, the nominal increase inthere will be no real increase in the 1992-93. In fact, the nominal increase inthere will be no real increase in the 1992-93. In fact, the nominal increase inthere will be no real increase in the 1992-93. In fact, the nominal increase in

spending is allocated not for recruiting more police officers but for somespending is allocated not for recruiting more police officers but for somespending is allocated not for recruiting more police officers but for somespending is allocated not for recruiting more police officers but for some

construction projects. I admit that more construction projects are required as theyconstruction projects. I admit that more construction projects are required as theyconstruction projects. I admit that more construction projects are required as theyconstruction projects. I admit that more construction projects are required as they

will be helpful to the operations of the police force. Still, I must stress thatwill be helpful to the operations of the police force. Still, I must stress thatwill be helpful to the operations of the police force. Still, I must stress thatwill be helpful to the operations of the police force. Still, I must stress that

nothing will be more important than boosting the ranks of the police force. Thisnothing will be more important than boosting the ranks of the police force. Thisnothing will be more important than boosting the ranks of the police force. Thisnothing will be more important than boosting the ranks of the police force. This

is because police officers are on the frontline in our battle against crimes.is because police officers are on the frontline in our battle against crimes.is because police officers are on the frontline in our battle against crimes.is because police officers are on the frontline in our battle against crimes.

I deeply deplore the public spending on the police force in the 1992-93 Budget.I deeply deplore the public spending on the police force in the 1992-93 Budget.I deeply deplore the public spending on the police force in the 1992-93 Budget.I deeply deplore the public spending on the police force in the 1992-93 Budget.

The spending increase as proposed in the Budget is aThe spending increase as proposed in the Budget is aThe spending increase as proposed in the Budget is aThe spending increase as proposed in the Budget is absurd. There will be an 8.3%bsurd. There will be an 8.3%bsurd. There will be an 8.3%bsurd. There will be an 8.3%

increase in spending on the maintenance of law and order. However, this increaseincrease in spending on the maintenance of law and order. However, this increaseincrease in spending on the maintenance of law and order. However, this increaseincrease in spending on the maintenance of law and order. However, this increase

is in reality for some construction projects. The establishment of the police forceis in reality for some construction projects. The establishment of the police forceis in reality for some construction projects. The establishment of the police forceis in reality for some construction projects. The establishment of the police force

may be reduced by 296 officers. As for the spending on the prevention and detectionmay be reduced by 296 officers. As for the spending on the prevention and detectionmay be reduced by 296 officers. As for the spending on the prevention and detectionmay be reduced by 296 officers. As for the spending on the prevention and detection

of crimes, it will go up by only 3.5%.of crimes, it will go up by only 3.5%.of crimes, it will go up by only 3.5%.of crimes, it will go up by only 3.5%.

This is why I and the UDHK are opposed to the proposal of spending more onThis is why I and the UDHK are opposed to the proposal of spending more onThis is why I and the UDHK are opposed to the proposal of spending more onThis is why I and the UDHK are opposed to the proposal of spending more on

construction projects and not on the recruitment of more police officers.construction projects and not on the recruitment of more police officers.construction projects and not on the recruitment of more police officers.construction projects and not on the recruitment of more police officers.

I hope that the Government would shareI hope that the Government would shareI hope that the Government would shareI hope that the Government would share our concern about the present law and order our concern about the present law and order our concern about the present law and order our concern about the present law and order

situation and give careful thought to the police force's actual spending needs.situation and give careful thought to the police force's actual spending needs.situation and give careful thought to the police force's actual spending needs.situation and give careful thought to the police force's actual spending needs.

Concerning the deployment of police resources, I would like to put forward theConcerning the deployment of police resources, I would like to put forward theConcerning the deployment of police resources, I would like to put forward theConcerning the deployment of police resources, I would like to put forward the

following points:following points:following points:following points:

(1)(1)(1)(1) Vietnamese boat peopleVietnamese boat peopleVietnamese boat peopleVietnamese boat people

TTTThe UDHK and I think that the police's spending in connection with the Vietnamesehe UDHK and I think that the police's spending in connection with the Vietnamesehe UDHK and I think that the police's spending in connection with the Vietnamesehe UDHK and I think that the police's spending in connection with the Vietnamese

boat people, both for managing the closed camps and for operational purposes, shouldboat people, both for managing the closed camps and for operational purposes, shouldboat people, both for managing the closed camps and for operational purposes, shouldboat people, both for managing the closed camps and for operational purposes, should

come from the military vote. This will leave the police with more resources for crimecome from the military vote. This will leave the police with more resources for crimecome from the military vote. This will leave the police with more resources for crimecome from the military vote. This will leave the police with more resources for crime

fighting.fighting.fighting.fighting.

(2)(2)(2)(2) RemunerationRemunerationRemunerationRemuneration

Remuneration has recently become the focus of discussions among all the ranksRemuneration has recently become the focus of discussions among all the ranksRemuneration has recently become the focus of discussions among all the ranksRemuneration has recently become the focus of discussions among all the ranks

of the police force. On a business visit to the United Kingdom, I found that thereof the police force. On a business visit to the United Kingdom, I found that thereof the police force. On a business visit to the United Kingdom, I found that thereof the police force. On a business visit to the United Kingdom, I found that there

is no marked pay disparity between police officers at different ranks in the Britishis no marked pay disparity between police officers at different ranks in the Britishis no marked pay disparity between police officers at different ranks in the Britishis no marked pay disparity between police officers at different ranks in the British

police force (such as that between senior police constables and junior inspectors).police force (such as that between senior police constables and junior inspectors).police force (such as that between senior police constables and junior inspectors).police force (such as that between senior police constables and junior inspectors).

The pay scales are laid down in accordance with the principle of value for money.The pay scales are laid down in accordance with the principle of value for money.The pay scales are laid down in accordance with the principle of value for money.The pay scales are laid down in accordance with the principle of value for money.

And this is a far cry from that in Hong Kong.And this is a far cry from that in Hong Kong.And this is a far cry from that in Hong Kong.And this is a far cry from that in Hong Kong.

The high wastage amonThe high wastage amonThe high wastage amonThe high wastage among the junior police officers and the difficultiesg the junior police officers and the difficultiesg the junior police officers and the difficultiesg the junior police officers and the difficulties

encountered in recruitment exercises, I believe, have to do with the fact that, theyencountered in recruitment exercises, I believe, have to do with the fact that, theyencountered in recruitment exercises, I believe, have to do with the fact that, theyencountered in recruitment exercises, I believe, have to do with the fact that, they

are not adequately rewarded in view of the risks involved in their work. I hope thatare not adequately rewarded in view of the risks involved in their work. I hope thatare not adequately rewarded in view of the risks involved in their work. I hope thatare not adequately rewarded in view of the risks involved in their work. I hope that

the authorities will pay attention to this and may use the value-for-money principlethe authorities will pay attention to this and may use the value-for-money principlethe authorities will pay attention to this and may use the value-for-money principlethe authorities will pay attention to this and may use the value-for-money principle

in the United Kingdom as reference when reviewing the police officers' pay scales.in the United Kingdom as reference when reviewing the police officers' pay scales.in the United Kingdom as reference when reviewing the police officers' pay scales.in the United Kingdom as reference when reviewing the police officers' pay scales.

Besides, I do not understand why police officers have to work over-time but withBesides, I do not understand why police officers have to work over-time but withBesides, I do not understand why police officers have to work over-time but withBesides, I do not understand why police officers have to work over-time but with

no specific duties assigned for them in advance and are granted over-time pay. Ino specific duties assigned for them in advance and are granted over-time pay. Ino specific duties assigned for them in advance and are granted over-time pay. Ino specific duties assigned for them in advance and are granted over-time pay. I

hope that a solution to this dispute between the authorities and the police officershope that a solution to this dispute between the authorities and the police officershope that a solution to this dispute between the authorities and the police officershope that a solution to this dispute between the authorities and the police officers

could be reached.could be reached.could be reached.could be reached.

DEPUTY PRESIDENT: Mr TO, the interruption has been deducted; so please try to finishDEPUTY PRESIDENT: Mr TO, the interruption has been deducted; so please try to finishDEPUTY PRESIDENT: Mr TO, the interruption has been deducted; so please try to finishDEPUTY PRESIDENT: Mr TO, the interruption has been deducted; so please try to finish

your speech.your speech.your speech.your speech.

MR JAMES TO: I shall be brief. (in Cantonese) Another matter is the collection ofMR JAMES TO: I shall be brief. (in Cantonese) Another matter is the collection ofMR JAMES TO: I shall be brief. (in Cantonese) Another matter is the collection ofMR JAMES TO: I shall be brief. (in Cantonese) Another matter is the collection of

intelligence. With the changes in criminal activities and practices.....intelligence. With the changes in criminal activities and practices.....intelligence. With the changes in criminal activities and practices.....intelligence. With the changes in criminal activities and practices.....

DEPUTY PRESIDENT: Mr TO, I am afraid you must finish your speech.DEPUTY PRESIDENT: Mr TO, I am afraid you must finish your speech.DEPUTY PRESIDENT: Mr TO, I am afraid you must finish your speech.DEPUTY PRESIDENT: Mr TO, I am afraid you must finish your speech.

MR JAMES TO (in Cantonese): I shall make known my other remarks to the public inMR JAMES TO (in Cantonese): I shall make known my other remarks to the public inMR JAMES TO (in Cantonese): I shall make known my other remarks to the public inMR JAMES TO (in Cantonese): I shall make known my other remarks to the public in

writing.writing.writing.writing.

DR PHILIP WONG (in Cantonese): Mr Deputy President, the major tasks of the presentDR PHILIP WONG (in Cantonese): Mr Deputy President, the major tasks of the presentDR PHILIP WONG (in Cantonese): Mr Deputy President, the major tasks of the presentDR PHILIP WONG (in Cantonese): Mr Deputy President, the major tasks of the present

Financial Secretary are how to maintain the continuity and stability of the fiscalFinancial Secretary are how to maintain the continuity and stability of the fiscalFinancial Secretary are how to maintain the continuity and stability of the fiscalFinancial Secretary are how to maintain the continuity and stability of the fiscal

policy during the latter half of the transition period so as to promote economic growthpolicy during the latter half of the transition period so as to promote economic growthpolicy during the latter half of the transition period so as to promote economic growthpolicy during the latter half of the transition period so as to promote economic growth

and to upgrade the quality of living of our people.and to upgrade the quality of living of our people.and to upgrade the quality of living of our people.and to upgrade the quality of living of our people.

Looking back to the role played by the Financial Secretary during the past sixLooking back to the role played by the Financial Secretary during the past sixLooking back to the role played by the Financial Secretary during the past sixLooking back to the role played by the Financial Secretary during the past six

months since his appointment, many people were perplexed by the approaches adoptedmonths since his appointment, many people were perplexed by the approaches adoptedmonths since his appointment, many people were perplexed by the approaches adoptedmonths since his appointment, many people were perplexed by the approaches adopted

in his policy. Some people expected certain drastic changes while others preferredin his policy. Some people expected certain drastic changes while others preferredin his policy. Some people expected certain drastic changes while others preferredin his policy. Some people expected certain drastic changes while others preferred

the changes to be introduced steadily and progressively. At the outset of his Budgetthe changes to be introduced steadily and progressively. At the outset of his Budgetthe changes to be introduced steadily and progressively. At the outset of his Budgetthe changes to be introduced steadily and progressively. At the outset of his Budget

speech delivered on 4 March, the Financial Secretary used the expressions such asspeech delivered on 4 March, the Financial Secretary used the expressions such asspeech delivered on 4 March, the Financial Secretary used the expressions such asspeech delivered on 4 March, the Financial Secretary used the expressions such as

"fully subscribe", "do all I can to ensure", "a commitment to .....". He also"fully subscribe", "do all I can to ensure", "a commitment to .....". He also"fully subscribe", "do all I can to ensure", "a commitment to .....". He also"fully subscribe", "do all I can to ensure", "a commitment to .....". He also

reiterated the conventional philosophies of financial management such as "areiterated the conventional philosophies of financial management such as "areiterated the conventional philosophies of financial management such as "areiterated the conventional philosophies of financial management such as "a

commitment to enterprise, a commitment to low taxation, and a commitment to freecommitment to enterprise, a commitment to low taxation, and a commitment to freecommitment to enterprise, a commitment to low taxation, and a commitment to freecommitment to enterprise, a commitment to low taxation, and a commitment to free

markets and free trade", and so on. He also talked much about the economic and socialmarkets and free trade", and so on. He also talked much about the economic and socialmarkets and free trade", and so on. He also talked much about the economic and socialmarkets and free trade", and so on. He also talked much about the economic and social

problems of Hong Kong during the latter half of the transition period, and stressedproblems of Hong Kong during the latter half of the transition period, and stressedproblems of Hong Kong during the latter half of the transition period, and stressedproblems of Hong Kong during the latter half of the transition period, and stressed

that the main objective of his financial management was to build a new airport andthat the main objective of his financial management was to build a new airport andthat the main objective of his financial management was to build a new airport andthat the main objective of his financial management was to build a new airport and

to make ample financial reserve. I think that in the first Budget of the Financialto make ample financial reserve. I think that in the first Budget of the Financialto make ample financial reserve. I think that in the first Budget of the Financialto make ample financial reserve. I think that in the first Budget of the Financial

Secretary, he does not only present to us the draft expenditure and revenue estimatesSecretary, he does not only present to us the draft expenditure and revenue estimatesSecretary, he does not only present to us the draft expenditure and revenue estimatesSecretary, he does not only present to us the draft expenditure and revenue estimates

of the coming year, but also tries to delineate a general outline of the fiscal policyof the coming year, but also tries to delineate a general outline of the fiscal policyof the coming year, but also tries to delineate a general outline of the fiscal policyof the coming year, but also tries to delineate a general outline of the fiscal policy

of Hong Kong up to 1997.of Hong Kong up to 1997.of Hong Kong up to 1997.of Hong Kong up to 1997.

Frankly speaking, the Government has achieved remarkable results in maintainingFrankly speaking, the Government has achieved remarkable results in maintainingFrankly speaking, the Government has achieved remarkable results in maintainingFrankly speaking, the Government has achieved remarkable results in maintaining

the low taxation regime, launching the infrastructural programme, providing thethe low taxation regime, launching the infrastructural programme, providing thethe low taxation regime, launching the infrastructural programme, providing thethe low taxation regime, launching the infrastructural programme, providing the

social services and accumulating fiscal reserve, and promoting Hong Kong as ansocial services and accumulating fiscal reserve, and promoting Hong Kong as ansocial services and accumulating fiscal reserve, and promoting Hong Kong as ansocial services and accumulating fiscal reserve, and promoting Hong Kong as an

international city. Comparing it with other countries such as the welfare states,international city. Comparing it with other countries such as the welfare states,international city. Comparing it with other countries such as the welfare states,international city. Comparing it with other countries such as the welfare states,

performance is commendable indeed. The persistent economic growth of our economyperformance is commendable indeed. The persistent economic growth of our economyperformance is commendable indeed. The persistent economic growth of our economyperformance is commendable indeed. The persistent economic growth of our economy

is, to a large extent, due to the reformed open door policy of China. It is alsois, to a large extent, due to the reformed open door policy of China. It is alsois, to a large extent, due to the reformed open door policy of China. It is alsois, to a large extent, due to the reformed open door policy of China. It is also

attributable to the zealous efforts of the civil servants and the general public.attributable to the zealous efforts of the civil servants and the general public.attributable to the zealous efforts of the civil servants and the general public.attributable to the zealous efforts of the civil servants and the general public.

The present prosperity of Hong Kong is achieved through progressive development. InThe present prosperity of Hong Kong is achieved through progressive development. InThe present prosperity of Hong Kong is achieved through progressive development. InThe present prosperity of Hong Kong is achieved through progressive development. In

the past, some people tended to criticize the Budget as being "conservative", "dull"the past, some people tended to criticize the Budget as being "conservative", "dull"the past, some people tended to criticize the Budget as being "conservative", "dull"the past, some people tended to criticize the Budget as being "conservative", "dull"

and "lack of new ideas". But in my opinion, these remarks are too generalized andand "lack of new ideas". But in my opinion, these remarks are too generalized andand "lack of new ideas". But in my opinion, these remarks are too generalized andand "lack of new ideas". But in my opinion, these remarks are too generalized and

simplistic. The free economy of Hong Kong has brought forth many advantages, intersimplistic. The free economy of Hong Kong has brought forth many advantages, intersimplistic. The free economy of Hong Kong has brought forth many advantages, intersimplistic. The free economy of Hong Kong has brought forth many advantages, inter

alia, a simple and straight-forward Budget, the balance between income andalia, a simple and straight-forward Budget, the balance between income andalia, a simple and straight-forward Budget, the balance between income andalia, a simple and straight-forward Budget, the balance between income and

expenditure and fiscal management policies being ruled by law. We have about fiveexpenditure and fiscal management policies being ruled by law. We have about fiveexpenditure and fiscal management policies being ruled by law. We have about fiveexpenditure and fiscal management policies being ruled by law. We have about five

years to go before this latter half of the transition period comes to an end, theyears to go before this latter half of the transition period comes to an end, theyears to go before this latter half of the transition period comes to an end, theyears to go before this latter half of the transition period comes to an end, the

majority of us would not like to experience any drastic change in our fiscal policy,majority of us would not like to experience any drastic change in our fiscal policy,majority of us would not like to experience any drastic change in our fiscal policy,majority of us would not like to experience any drastic change in our fiscal policy,

so as not to jeopardize the favourable conditions of Hong Kong as a low-tax free port.so as not to jeopardize the favourable conditions of Hong Kong as a low-tax free port.so as not to jeopardize the favourable conditions of Hong Kong as a low-tax free port.so as not to jeopardize the favourable conditions of Hong Kong as a low-tax free port.

The general public are reasonable and rational. It is natural that they willThe general public are reasonable and rational. It is natural that they willThe general public are reasonable and rational. It is natural that they willThe general public are reasonable and rational. It is natural that they will

offer favourable and adverse remarks to the Budget. The Budget has rekindled a heatedoffer favourable and adverse remarks to the Budget. The Budget has rekindled a heatedoffer favourable and adverse remarks to the Budget. The Budget has rekindled a heatedoffer favourable and adverse remarks to the Budget. The Budget has rekindled a heated

public debate on whether it is fair and reasonable; the public are concerned aboutpublic debate on whether it is fair and reasonable; the public are concerned aboutpublic debate on whether it is fair and reasonable; the public are concerned aboutpublic debate on whether it is fair and reasonable; the public are concerned about

the implications brought about by the major infrastructural projects on our economythe implications brought about by the major infrastructural projects on our economythe implications brought about by the major infrastructural projects on our economythe implications brought about by the major infrastructural projects on our economy

as well as people's livelihood, so they urged that the Government should monitoras well as people's livelihood, so they urged that the Government should monitoras well as people's livelihood, so they urged that the Government should monitoras well as people's livelihood, so they urged that the Government should monitor

various kinds of income and expenditure, which would then be conducive to the soundvarious kinds of income and expenditure, which would then be conducive to the soundvarious kinds of income and expenditure, which would then be conducive to the soundvarious kinds of income and expenditure, which would then be conducive to the sound

development of the economy. Of course, the Budget is an overall estimate, whichdevelopment of the economy. Of course, the Budget is an overall estimate, whichdevelopment of the economy. Of course, the Budget is an overall estimate, whichdevelopment of the economy. Of course, the Budget is an overall estimate, which

should be pondered deeply and carefully over so as to strike a balance prudently.should be pondered deeply and carefully over so as to strike a balance prudently.should be pondered deeply and carefully over so as to strike a balance prudently.should be pondered deeply and carefully over so as to strike a balance prudently.

But whether it is a good Budget or not, it should be judged by the public and onlyBut whether it is a good Budget or not, it should be judged by the public and onlyBut whether it is a good Budget or not, it should be judged by the public and onlyBut whether it is a good Budget or not, it should be judged by the public and only

time would tell. The criteria for making such judgement are its effectiveness intime would tell. The criteria for making such judgement are its effectiveness intime would tell. The criteria for making such judgement are its effectiveness intime would tell. The criteria for making such judgement are its effectiveness in

enhancing economic growth and social stability. The impact of certain policies andenhancing economic growth and social stability. The impact of certain policies andenhancing economic growth and social stability. The impact of certain policies andenhancing economic growth and social stability. The impact of certain policies and

measures would not necessarily be reflected within a short span of time; it takesmeasures would not necessarily be reflected within a short span of time; it takesmeasures would not necessarily be reflected within a short span of time; it takesmeasures would not necessarily be reflected within a short span of time; it takes

a long duration to realize the impact. Thus, we should be careful and rational ina long duration to realize the impact. Thus, we should be careful and rational ina long duration to realize the impact. Thus, we should be careful and rational ina long duration to realize the impact. Thus, we should be careful and rational in

the evaluation of the Budget. The present economic situation may be closely relatedthe evaluation of the Budget. The present economic situation may be closely relatedthe evaluation of the Budget. The present economic situation may be closely relatedthe evaluation of the Budget. The present economic situation may be closely related

to the implementation of the Budget over the past few years.to the implementation of the Budget over the past few years.to the implementation of the Budget over the past few years.to the implementation of the Budget over the past few years.

AsAsAsAs regards the adjustment of taxation, I have mentioned repeatedly that I support regards the adjustment of taxation, I have mentioned repeatedly that I support regards the adjustment of taxation, I have mentioned repeatedly that I support regards the adjustment of taxation, I have mentioned repeatedly that I support

the slight upward or downward adjustment of profits tax provided that it is necessary.the slight upward or downward adjustment of profits tax provided that it is necessary.the slight upward or downward adjustment of profits tax provided that it is necessary.the slight upward or downward adjustment of profits tax provided that it is necessary.

The profits tax was maintained at 18.5% a few years ago; nevertheless, the industrialThe profits tax was maintained at 18.5% a few years ago; nevertheless, the industrialThe profits tax was maintained at 18.5% a few years ago; nevertheless, the industrialThe profits tax was maintained at 18.5% a few years ago; nevertheless, the industrial

and commercial sectors did not raise strong objection to this rate at that time. Itand commercial sectors did not raise strong objection to this rate at that time. Itand commercial sectors did not raise strong objection to this rate at that time. Itand commercial sectors did not raise strong objection to this rate at that time. It

is because the industrial and commercial sectors have the unavoidable responsibilityis because the industrial and commercial sectors have the unavoidable responsibilityis because the industrial and commercial sectors have the unavoidable responsibilityis because the industrial and commercial sectors have the unavoidable responsibility

of promoting economic growth and boosting government revenue. I believe that theof promoting economic growth and boosting government revenue. I believe that theof promoting economic growth and boosting government revenue. I believe that theof promoting economic growth and boosting government revenue. I believe that the

moderate increase of one percentage point to 17.5% this year would be acceptable tomoderate increase of one percentage point to 17.5% this year would be acceptable tomoderate increase of one percentage point to 17.5% this year would be acceptable tomoderate increase of one percentage point to 17.5% this year would be acceptable to

the majority of the business sector. I have mentioned just now that the low profitsthe majority of the business sector. I have mentioned just now that the low profitsthe majority of the business sector. I have mentioned just now that the low profitsthe majority of the business sector. I have mentioned just now that the low profits

tax is one of the factors that contributes to the success of Hong Kong, therebytax is one of the factors that contributes to the success of Hong Kong, therebytax is one of the factors that contributes to the success of Hong Kong, therebytax is one of the factors that contributes to the success of Hong Kong, thereby

attracting foreign investment. In the case of other countries or regions, such asattracting foreign investment. In the case of other countries or regions, such asattracting foreign investment. In the case of other countries or regions, such asattracting foreign investment. In the case of other countries or regions, such as

South Korea, Singapore and Taiwan, although a higher profits tax is imposed, someSouth Korea, Singapore and Taiwan, although a higher profits tax is imposed, someSouth Korea, Singapore and Taiwan, although a higher profits tax is imposed, someSouth Korea, Singapore and Taiwan, although a higher profits tax is imposed, some

other concessions are offered to investors, which are not provided now in Hong Kong.other concessions are offered to investors, which are not provided now in Hong Kong.other concessions are offered to investors, which are not provided now in Hong Kong.other concessions are offered to investors, which are not provided now in Hong Kong.

Should there be persistent trend of increasing profits tax, we cannot rule out theShould there be persistent trend of increasing profits tax, we cannot rule out theShould there be persistent trend of increasing profits tax, we cannot rule out theShould there be persistent trend of increasing profits tax, we cannot rule out the

possibility of affecting the environment as well as the incentives for makingpossibility of affecting the environment as well as the incentives for makingpossibility of affecting the environment as well as the incentives for makingpossibility of affecting the environment as well as the incentives for making

investment. In order that the economy of Hong Kong may still be flourished afterinvestment. In order that the economy of Hong Kong may still be flourished afterinvestment. In order that the economy of Hong Kong may still be flourished afterinvestment. In order that the economy of Hong Kong may still be flourished after

1997, we must maintain our low tax regime. Taking stock of the situation in some1997, we must maintain our low tax regime. Taking stock of the situation in some1997, we must maintain our low tax regime. Taking stock of the situation in some1997, we must maintain our low tax regime. Taking stock of the situation in some

western countries, the economy is put into a mess due to high taxation policies; thesewestern countries, the economy is put into a mess due to high taxation policies; thesewestern countries, the economy is put into a mess due to high taxation policies; thesewestern countries, the economy is put into a mess due to high taxation policies; these

countries are simply hoist with their own petard and the middle and low income groupscountries are simply hoist with their own petard and the middle and low income groupscountries are simply hoist with their own petard and the middle and low income groupscountries are simply hoist with their own petard and the middle and low income groups

would suffer ultimately. We really do not wish this situation would occur in Hongwould suffer ultimately. We really do not wish this situation would occur in Hongwould suffer ultimately. We really do not wish this situation would occur in Hongwould suffer ultimately. We really do not wish this situation would occur in Hong

Kong. Hence, although the effects may not be serious for a slight increase in profitsKong. Hence, although the effects may not be serious for a slight increase in profitsKong. Hence, although the effects may not be serious for a slight increase in profitsKong. Hence, although the effects may not be serious for a slight increase in profits

tax, it does not necessarily mean that tax rise should go ahead in view of thetax, it does not necessarily mean that tax rise should go ahead in view of thetax, it does not necessarily mean that tax rise should go ahead in view of thetax, it does not necessarily mean that tax rise should go ahead in view of the

insignificant impact, or worse still, to propose any drastic increase to our taxinsignificant impact, or worse still, to propose any drastic increase to our taxinsignificant impact, or worse still, to propose any drastic increase to our taxinsignificant impact, or worse still, to propose any drastic increase to our tax

system. The Financial Secretary ought to give justifications in this case. Shouldsystem. The Financial Secretary ought to give justifications in this case. Shouldsystem. The Financial Secretary ought to give justifications in this case. Shouldsystem. The Financial Secretary ought to give justifications in this case. Should

tax rise be imposed for the sake of the new airport projects to be launched shortly,tax rise be imposed for the sake of the new airport projects to be launched shortly,tax rise be imposed for the sake of the new airport projects to be launched shortly,tax rise be imposed for the sake of the new airport projects to be launched shortly,

it means that the Government is breaking its promise of "not raising tax" and "notit means that the Government is breaking its promise of "not raising tax" and "notit means that the Government is breaking its promise of "not raising tax" and "notit means that the Government is breaking its promise of "not raising tax" and "not

increasing public burden". Should tax increase be imposed because of the need ofincreasing public burden". Should tax increase be imposed because of the need ofincreasing public burden". Should tax increase be imposed because of the need ofincreasing public burden". Should tax increase be imposed because of the need of

boosting financial reserve, this would inevitably attract fierce citicisms from allboosting financial reserve, this would inevitably attract fierce citicisms from allboosting financial reserve, this would inevitably attract fierce citicisms from allboosting financial reserve, this would inevitably attract fierce citicisms from all

sectors. Besides, it would be an issue of controversy if it justifies itself bysectors. Besides, it would be an issue of controversy if it justifies itself bysectors. Besides, it would be an issue of controversy if it justifies itself bysectors. Besides, it would be an issue of controversy if it justifies itself by

professing to strike a balance between different sectors, that is, between theprofessing to strike a balance between different sectors, that is, between theprofessing to strike a balance between different sectors, that is, between theprofessing to strike a balance between different sectors, that is, between the

protection of investment and the widening of "safety net"; because some trades withprotection of investment and the widening of "safety net"; because some trades withprotection of investment and the widening of "safety net"; because some trades withprotection of investment and the widening of "safety net"; because some trades with

low profit margins may be adversely affected by this measure. It is particularlylow profit margins may be adversely affected by this measure. It is particularlylow profit margins may be adversely affected by this measure. It is particularlylow profit margins may be adversely affected by this measure. It is particularly

so because in our neighbouring countries, there is a trend of tax reduction, whereasso because in our neighbouring countries, there is a trend of tax reduction, whereasso because in our neighbouring countries, there is a trend of tax reduction, whereasso because in our neighbouring countries, there is a trend of tax reduction, whereas

Hong Kong is running counter to this trend. We have already yielded a hefty surplusHong Kong is running counter to this trend. We have already yielded a hefty surplusHong Kong is running counter to this trend. We have already yielded a hefty surplusHong Kong is running counter to this trend. We have already yielded a hefty surplus

of $14.1 billion last year and we now have an aggregate reserves of $92 billion, andof $14.1 billion last year and we now have an aggregate reserves of $92 billion, andof $14.1 billion last year and we now have an aggregate reserves of $92 billion, andof $14.1 billion last year and we now have an aggregate reserves of $92 billion, and

in view that we can yield some surplus even without any tax rise, it would bein view that we can yield some surplus even without any tax rise, it would bein view that we can yield some surplus even without any tax rise, it would bein view that we can yield some surplus even without any tax rise, it would be

unconvincing to insist on tax increase. By the same token, the Government onlyunconvincing to insist on tax increase. By the same token, the Government onlyunconvincing to insist on tax increase. By the same token, the Government onlyunconvincing to insist on tax increase. By the same token, the Government only

proposed nominal increase to the personal allowance, while on the other hand, generalproposed nominal increase to the personal allowance, while on the other hand, generalproposed nominal increase to the personal allowance, while on the other hand, generalproposed nominal increase to the personal allowance, while on the other hand, general

rates would be increased and 25% of rates relief would be withdrawn, hence the burdenrates would be increased and 25% of rates relief would be withdrawn, hence the burdenrates would be increased and 25% of rates relief would be withdrawn, hence the burdenrates would be increased and 25% of rates relief would be withdrawn, hence the burden

of the general public would be increased. To accumulate wealth through such meansof the general public would be increased. To accumulate wealth through such meansof the general public would be increased. To accumulate wealth through such meansof the general public would be increased. To accumulate wealth through such means

would certainly arouse social frustration and discontent. Many colleagues havewould certainly arouse social frustration and discontent. Many colleagues havewould certainly arouse social frustration and discontent. Many colleagues havewould certainly arouse social frustration and discontent. Many colleagues have

already elaborated their criticisms, therefore I would not repeat here. Althoughalready elaborated their criticisms, therefore I would not repeat here. Althoughalready elaborated their criticisms, therefore I would not repeat here. Althoughalready elaborated their criticisms, therefore I would not repeat here. Although

I do not think it is appropriate to make drastic changes, the taxation system shouldI do not think it is appropriate to make drastic changes, the taxation system shouldI do not think it is appropriate to make drastic changes, the taxation system shouldI do not think it is appropriate to make drastic changes, the taxation system should

be adjusted in line with the economic situation so as to benefit the general public.be adjusted in line with the economic situation so as to benefit the general public.be adjusted in line with the economic situation so as to benefit the general public.be adjusted in line with the economic situation so as to benefit the general public.

A responsible government should adopt such fiscal management policy. As regards theA responsible government should adopt such fiscal management policy. As regards theA responsible government should adopt such fiscal management policy. As regards theA responsible government should adopt such fiscal management policy. As regards the

constructive ideas, it is hoped that the Government would listen to the useful advice,constructive ideas, it is hoped that the Government would listen to the useful advice,constructive ideas, it is hoped that the Government would listen to the useful advice,constructive ideas, it is hoped that the Government would listen to the useful advice,

sympathize with and understand people's feelings, and make some appropriatesympathize with and understand people's feelings, and make some appropriatesympathize with and understand people's feelings, and make some appropriatesympathize with and understand people's feelings, and make some appropriate

adjustment this year or next year. As the Budget proposes to extend the requirementadjustment this year or next year. As the Budget proposes to extend the requirementadjustment this year or next year. As the Budget proposes to extend the requirementadjustment this year or next year. As the Budget proposes to extend the requirement

to pay duty on light diesel oil to locally registered pleasure craft, in my opinion,to pay duty on light diesel oil to locally registered pleasure craft, in my opinion,to pay duty on light diesel oil to locally registered pleasure craft, in my opinion,to pay duty on light diesel oil to locally registered pleasure craft, in my opinion,

it is reasonable to impose this duty on owners of luxurious pleasure craft which areit is reasonable to impose this duty on owners of luxurious pleasure craft which areit is reasonable to impose this duty on owners of luxurious pleasure craft which areit is reasonable to impose this duty on owners of luxurious pleasure craft which are

used for private entertainment. But as far as I know, this is unfair for fishingused for private entertainment. But as far as I know, this is unfair for fishingused for private entertainment. But as far as I know, this is unfair for fishingused for private entertainment. But as far as I know, this is unfair for fishing

folks who have to hire such crafts to make their earnings or support their own living.folks who have to hire such crafts to make their earnings or support their own living.folks who have to hire such crafts to make their earnings or support their own living.folks who have to hire such crafts to make their earnings or support their own living.

Apart from increasing the operational costs of such fisherman, this measure wouldApart from increasing the operational costs of such fisherman, this measure wouldApart from increasing the operational costs of such fisherman, this measure wouldApart from increasing the operational costs of such fisherman, this measure would

affect the young students and general public who spend their holidays in the outlyingaffect the young students and general public who spend their holidays in the outlyingaffect the young students and general public who spend their holidays in the outlyingaffect the young students and general public who spend their holidays in the outlying

islands, thereby jeopardizing tourism in outlying islands. Did the Financialislands, thereby jeopardizing tourism in outlying islands. Did the Financialislands, thereby jeopardizing tourism in outlying islands. Did the Financialislands, thereby jeopardizing tourism in outlying islands. Did the Financial

Secretary conduct any in-depth research on this issue? Did he consider a separateSecretary conduct any in-depth research on this issue? Did he consider a separateSecretary conduct any in-depth research on this issue? Did he consider a separateSecretary conduct any in-depth research on this issue? Did he consider a separate

taxation system for recreational and commercial use of pleasure crafts, or providingtaxation system for recreational and commercial use of pleasure crafts, or providingtaxation system for recreational and commercial use of pleasure crafts, or providingtaxation system for recreational and commercial use of pleasure crafts, or providing

any allowance for exemption? Moreover, I would like to suggest that the methods inany allowance for exemption? Moreover, I would like to suggest that the methods inany allowance for exemption? Moreover, I would like to suggest that the methods inany allowance for exemption? Moreover, I would like to suggest that the methods in

the levy of estate duty should be amended to prevent people from transferring thethe levy of estate duty should be amended to prevent people from transferring thethe levy of estate duty should be amended to prevent people from transferring thethe levy of estate duty should be amended to prevent people from transferring the

enormous capital abroad so as to avoid paying tax. In view of the huge surplus, mayenormous capital abroad so as to avoid paying tax. In view of the huge surplus, mayenormous capital abroad so as to avoid paying tax. In view of the huge surplus, mayenormous capital abroad so as to avoid paying tax. In view of the huge surplus, may

I urge the Government to allocate more funds for education, law and order and theI urge the Government to allocate more funds for education, law and order and theI urge the Government to allocate more funds for education, law and order and theI urge the Government to allocate more funds for education, law and order and the

health services which are very much needed by the people, so that law and order ashealth services which are very much needed by the people, so that law and order ashealth services which are very much needed by the people, so that law and order ashealth services which are very much needed by the people, so that law and order as

well as the quality of living may be upgraded. Besides, the Government should paywell as the quality of living may be upgraded. Besides, the Government should paywell as the quality of living may be upgraded. Besides, the Government should paywell as the quality of living may be upgraded. Besides, the Government should pay

close attention to the housing problem of the sandwich class and early solutionsclose attention to the housing problem of the sandwich class and early solutionsclose attention to the housing problem of the sandwich class and early solutionsclose attention to the housing problem of the sandwich class and early solutions

should be sought for these people so as to help them to live and work in happinessshould be sought for these people so as to help them to live and work in happinessshould be sought for these people so as to help them to live and work in happinessshould be sought for these people so as to help them to live and work in happiness

and contentment, and making the best possible use of these people.and contentment, and making the best possible use of these people.and contentment, and making the best possible use of these people.and contentment, and making the best possible use of these people.

Mr Deputy President, I always respect and support the executive-led type ofMr Deputy President, I always respect and support the executive-led type ofMr Deputy President, I always respect and support the executive-led type ofMr Deputy President, I always respect and support the executive-led type of

administration, I always respect and support the hard work of the civil servants andadministration, I always respect and support the hard work of the civil servants andadministration, I always respect and support the hard work of the civil servants andadministration, I always respect and support the hard work of the civil servants and

the professionals. The tax adjustment measures and the amount of fund allocationthe professionals. The tax adjustment measures and the amount of fund allocationthe professionals. The tax adjustment measures and the amount of fund allocationthe professionals. The tax adjustment measures and the amount of fund allocation

would not bring about permanent effect. Any excessiveness or shortfall can bewould not bring about permanent effect. Any excessiveness or shortfall can bewould not bring about permanent effect. Any excessiveness or shortfall can bewould not bring about permanent effect. Any excessiveness or shortfall can be

rectified within the same year. Although I have reservations over some aspects ofrectified within the same year. Although I have reservations over some aspects ofrectified within the same year. Although I have reservations over some aspects ofrectified within the same year. Although I have reservations over some aspects of

the Budget, I do not support to veto against the Budget altogether because it willthe Budget, I do not support to veto against the Budget altogether because it willthe Budget, I do not support to veto against the Budget altogether because it willthe Budget, I do not support to veto against the Budget altogether because it will

bring about damaging effect. Hong Kong is a free port. As 1997 is drawing near,bring about damaging effect. Hong Kong is a free port. As 1997 is drawing near,bring about damaging effect. Hong Kong is a free port. As 1997 is drawing near,bring about damaging effect. Hong Kong is a free port. As 1997 is drawing near,

it is paramount to maintain the stable image. It is hoped that the Government willit is paramount to maintain the stable image. It is hoped that the Government willit is paramount to maintain the stable image. It is hoped that the Government willit is paramount to maintain the stable image. It is hoped that the Government will

listen to the views of all sectors and due consideration be given to these opinions.listen to the views of all sectors and due consideration be given to these opinions.listen to the views of all sectors and due consideration be given to these opinions.listen to the views of all sectors and due consideration be given to these opinions.

The Government should adopt the attitude of "listen to both sides and you will beThe Government should adopt the attitude of "listen to both sides and you will beThe Government should adopt the attitude of "listen to both sides and you will beThe Government should adopt the attitude of "listen to both sides and you will be

enlightened, listen to partial opinion and you will remain ignorant" and "remedy theenlightened, listen to partial opinion and you will remain ignorant" and "remedy theenlightened, listen to partial opinion and you will remain ignorant" and "remedy theenlightened, listen to partial opinion and you will remain ignorant" and "remedy the

mistakes if it has committed them and guard against them if there are not." Themistakes if it has committed them and guard against them if there are not." Themistakes if it has committed them and guard against them if there are not." Themistakes if it has committed them and guard against them if there are not." The

Government should review, assess and evaluate seriously the draft income andGovernment should review, assess and evaluate seriously the draft income andGovernment should review, assess and evaluate seriously the draft income andGovernment should review, assess and evaluate seriously the draft income and

expenditure proposals, so that the financial policy and fiscal management strategiesexpenditure proposals, so that the financial policy and fiscal management strategiesexpenditure proposals, so that the financial policy and fiscal management strategiesexpenditure proposals, so that the financial policy and fiscal management strategies

may become stable, fair, reasonable and sound; it will then be conducive to the overallmay become stable, fair, reasonable and sound; it will then be conducive to the overallmay become stable, fair, reasonable and sound; it will then be conducive to the overallmay become stable, fair, reasonable and sound; it will then be conducive to the overall

economy and the smooth convergence.economy and the smooth convergence.economy and the smooth convergence.economy and the smooth convergence.

I have been exchanging views with the business sectors who are also much concernedI have been exchanging views with the business sectors who are also much concernedI have been exchanging views with the business sectors who are also much concernedI have been exchanging views with the business sectors who are also much concerned

with the double digit inflation and the future infrastructural projects. They thinkwith the double digit inflation and the future infrastructural projects. They thinkwith the double digit inflation and the future infrastructural projects. They thinkwith the double digit inflation and the future infrastructural projects. They think

that it is the major enigmatic problem and challenge to be faced by Hong Kong. Thethat it is the major enigmatic problem and challenge to be faced by Hong Kong. Thethat it is the major enigmatic problem and challenge to be faced by Hong Kong. Thethat it is the major enigmatic problem and challenge to be faced by Hong Kong. The

Financial Secretary has attempted to elaborate the complicated causes of inflationFinancial Secretary has attempted to elaborate the complicated causes of inflationFinancial Secretary has attempted to elaborate the complicated causes of inflationFinancial Secretary has attempted to elaborate the complicated causes of inflation

and indicated his intention to alleviate the inflation. Compared with last year,and indicated his intention to alleviate the inflation. Compared with last year,and indicated his intention to alleviate the inflation. Compared with last year,and indicated his intention to alleviate the inflation. Compared with last year,

the Government has tried its best to minimize the impact of tax increase onto thethe Government has tried its best to minimize the impact of tax increase onto thethe Government has tried its best to minimize the impact of tax increase onto thethe Government has tried its best to minimize the impact of tax increase onto the

inflation. However, as the rates increase as well as the fees and charge of publicinflation. However, as the rates increase as well as the fees and charge of publicinflation. However, as the rates increase as well as the fees and charge of publicinflation. However, as the rates increase as well as the fees and charge of public

utilities would be raised by stages, it will exert pressure on inflation. I worryutilities would be raised by stages, it will exert pressure on inflation. I worryutilities would be raised by stages, it will exert pressure on inflation. I worryutilities would be raised by stages, it will exert pressure on inflation. I worry

that the Government is at a loss of identifying effective solutions to containthat the Government is at a loss of identifying effective solutions to containthat the Government is at a loss of identifying effective solutions to containthat the Government is at a loss of identifying effective solutions to contain

inflation and that inflation would be allowed to escalate without control, which wouldinflation and that inflation would be allowed to escalate without control, which wouldinflation and that inflation would be allowed to escalate without control, which wouldinflation and that inflation would be allowed to escalate without control, which would

probably become a factor for social instability, jeopardizing the future developmentprobably become a factor for social instability, jeopardizing the future developmentprobably become a factor for social instability, jeopardizing the future developmentprobably become a factor for social instability, jeopardizing the future development

of Hong Kong. If the Government is serious about combating inflation, it shouldof Hong Kong. If the Government is serious about combating inflation, it shouldof Hong Kong. If the Government is serious about combating inflation, it shouldof Hong Kong. If the Government is serious about combating inflation, it should

strictly adhere to the stringent financial policy to contain the public expenditurestrictly adhere to the stringent financial policy to contain the public expenditurestrictly adhere to the stringent financial policy to contain the public expenditurestrictly adhere to the stringent financial policy to contain the public expenditure

to below GDP, to step up its efforts in monitoring the charge increase of publicto below GDP, to step up its efforts in monitoring the charge increase of publicto below GDP, to step up its efforts in monitoring the charge increase of publicto below GDP, to step up its efforts in monitoring the charge increase of public

utilities, and to enhance the efficiency of the Government and productivity of theutilities, and to enhance the efficiency of the Government and productivity of theutilities, and to enhance the efficiency of the Government and productivity of theutilities, and to enhance the efficiency of the Government and productivity of the

society as a whole. The Government should also encourage the structuralsociety as a whole. The Government should also encourage the structuralsociety as a whole. The Government should also encourage the structuralsociety as a whole. The Government should also encourage the structural

transformation of our economy, the upgrading of technology and training. Recently,transformation of our economy, the upgrading of technology and training. Recently,transformation of our economy, the upgrading of technology and training. Recently,transformation of our economy, the upgrading of technology and training. Recently,

people have been asking why the Government is yet to release full details about thepeople have been asking why the Government is yet to release full details about thepeople have been asking why the Government is yet to release full details about thepeople have been asking why the Government is yet to release full details about the

estimates of the Airport Core Programme projects; it seems that the public has issuedestimates of the Airport Core Programme projects; it seems that the public has issuedestimates of the Airport Core Programme projects; it seems that the public has issuedestimates of the Airport Core Programme projects; it seems that the public has issued

a blank cheque to the Government. There has been criticisms that the Britisha blank cheque to the Government. There has been criticisms that the Britisha blank cheque to the Government. There has been criticisms that the Britisha blank cheque to the Government. There has been criticisms that the British

consortium who designed the new Hong Kong Bank Headquarters has been awarded theconsortium who designed the new Hong Kong Bank Headquarters has been awarded theconsortium who designed the new Hong Kong Bank Headquarters has been awarded theconsortium who designed the new Hong Kong Bank Headquarters has been awarded the

contract for the design of the airport though it proposed the highest bid. This willcontract for the design of the airport though it proposed the highest bid. This willcontract for the design of the airport though it proposed the highest bid. This willcontract for the design of the airport though it proposed the highest bid. This will

make people worry that the Government is paving the way for the British groups tomake people worry that the Government is paving the way for the British groups tomake people worry that the Government is paving the way for the British groups tomake people worry that the Government is paving the way for the British groups to

monopolize all contracts; the Government and this Council were urged to monitormonopolize all contracts; the Government and this Council were urged to monitormonopolize all contracts; the Government and this Council were urged to monitormonopolize all contracts; the Government and this Council were urged to monitor

closely and efficiently on the contracts awarded by the Airport Authority. In myclosely and efficiently on the contracts awarded by the Airport Authority. In myclosely and efficiently on the contracts awarded by the Airport Authority. In myclosely and efficiently on the contracts awarded by the Airport Authority. In my

opinion, the Government is obliged to make the best use of social resources andopinion, the Government is obliged to make the best use of social resources andopinion, the Government is obliged to make the best use of social resources andopinion, the Government is obliged to make the best use of social resources and

strictly control the costs. The cardinal principle should be low investment for highstrictly control the costs. The cardinal principle should be low investment for highstrictly control the costs. The cardinal principle should be low investment for highstrictly control the costs. The cardinal principle should be low investment for high

efficiency, and priorities should be given to airport project items. Hence, theefficiency, and priorities should be given to airport project items. Hence, theefficiency, and priorities should be given to airport project items. Hence, theefficiency, and priorities should be given to airport project items. Hence, the

pressure of inflation and the people's burden may then be alleviated, and then itpressure of inflation and the people's burden may then be alleviated, and then itpressure of inflation and the people's burden may then be alleviated, and then itpressure of inflation and the people's burden may then be alleviated, and then it

may ensure that the scale, the speed and expenditure of the infrastructural programmemay ensure that the scale, the speed and expenditure of the infrastructural programmemay ensure that the scale, the speed and expenditure of the infrastructural programmemay ensure that the scale, the speed and expenditure of the infrastructural programme

may be brought in line with the present and future affordability of Hong Kong. Asmay be brought in line with the present and future affordability of Hong Kong. Asmay be brought in line with the present and future affordability of Hong Kong. Asmay be brought in line with the present and future affordability of Hong Kong. As

the saying goes that we ought to "live within our means ", "cut our coat accordingthe saying goes that we ought to "live within our means ", "cut our coat accordingthe saying goes that we ought to "live within our means ", "cut our coat accordingthe saying goes that we ought to "live within our means ", "cut our coat according

to our cloth", "proportion the expenses to the incomes", it is not advisable to indulgeto our cloth", "proportion the expenses to the incomes", it is not advisable to indulgeto our cloth", "proportion the expenses to the incomes", it is not advisable to indulgeto our cloth", "proportion the expenses to the incomes", it is not advisable to indulge

in luxury and extravagance. We should learn our lesson from the cost overrunin luxury and extravagance. We should learn our lesson from the cost overrunin luxury and extravagance. We should learn our lesson from the cost overrunin luxury and extravagance. We should learn our lesson from the cost overrun

incidents of Hong Kong Bank Headquarters and Hong Kong University of Science andincidents of Hong Kong Bank Headquarters and Hong Kong University of Science andincidents of Hong Kong Bank Headquarters and Hong Kong University of Science andincidents of Hong Kong Bank Headquarters and Hong Kong University of Science and

Technology, and never should we attempt to justify ourselves with the excuse ofTechnology, and never should we attempt to justify ourselves with the excuse ofTechnology, and never should we attempt to justify ourselves with the excuse ofTechnology, and never should we attempt to justify ourselves with the excuse of

accumulating reserves, thus sacrificing future benefits to present gains. It isaccumulating reserves, thus sacrificing future benefits to present gains. It isaccumulating reserves, thus sacrificing future benefits to present gains. It isaccumulating reserves, thus sacrificing future benefits to present gains. It is

unwise to extort large sums of money from the public to meet the unknown expenditureunwise to extort large sums of money from the public to meet the unknown expenditureunwise to extort large sums of money from the public to meet the unknown expenditureunwise to extort large sums of money from the public to meet the unknown expenditure

and to allocate huge funds for the new airport and related projects. As the scaleand to allocate huge funds for the new airport and related projects. As the scaleand to allocate huge funds for the new airport and related projects. As the scaleand to allocate huge funds for the new airport and related projects. As the scale

of the new airport projects are relatively larger than that of the Hong Kong Bankof the new airport projects are relatively larger than that of the Hong Kong Bankof the new airport projects are relatively larger than that of the Hong Kong Bankof the new airport projects are relatively larger than that of the Hong Kong Bank

Headquarters and the University of Science and Technology, the impact of cost overrunHeadquarters and the University of Science and Technology, the impact of cost overrunHeadquarters and the University of Science and Technology, the impact of cost overrunHeadquarters and the University of Science and Technology, the impact of cost overrun

would be much more serious.would be much more serious.would be much more serious.would be much more serious.

In view of the favourable conditions in this latter half of the transition period,In view of the favourable conditions in this latter half of the transition period,In view of the favourable conditions in this latter half of the transition period,In view of the favourable conditions in this latter half of the transition period,

our Financial Secretary is in a better position than his predecessors. He should,our Financial Secretary is in a better position than his predecessors. He should,our Financial Secretary is in a better position than his predecessors. He should,our Financial Secretary is in a better position than his predecessors. He should,

in accordance with the provisions of Sino-British Joint Declaration and thein accordance with the provisions of Sino-British Joint Declaration and thein accordance with the provisions of Sino-British Joint Declaration and thein accordance with the provisions of Sino-British Joint Declaration and the

Memorandum of Understanding of the New Airport, enhance the mutual understanding andMemorandum of Understanding of the New Airport, enhance the mutual understanding andMemorandum of Understanding of the New Airport, enhance the mutual understanding andMemorandum of Understanding of the New Airport, enhance the mutual understanding and

co-operation among China, Britain and Hong Kong, and to hold discussions on majorco-operation among China, Britain and Hong Kong, and to hold discussions on majorco-operation among China, Britain and Hong Kong, and to hold discussions on majorco-operation among China, Britain and Hong Kong, and to hold discussions on major

issues. While launching on the major infrastructural projects, he should also payissues. While launching on the major infrastructural projects, he should also payissues. While launching on the major infrastructural projects, he should also payissues. While launching on the major infrastructural projects, he should also pay

attention to the quality of living of its people, maintain a balance between incomeattention to the quality of living of its people, maintain a balance between incomeattention to the quality of living of its people, maintain a balance between incomeattention to the quality of living of its people, maintain a balance between income

and expenditure, and to leave behind a reasonable reserves, thereby handing over toand expenditure, and to leave behind a reasonable reserves, thereby handing over toand expenditure, and to leave behind a reasonable reserves, thereby handing over toand expenditure, and to leave behind a reasonable reserves, thereby handing over to

the future SAR Government a financially sound, prosperous, stable, dynamic andthe future SAR Government a financially sound, prosperous, stable, dynamic andthe future SAR Government a financially sound, prosperous, stable, dynamic andthe future SAR Government a financially sound, prosperous, stable, dynamic and

low-tax free port. Undoubtedly the Financial Secretary has to consider a lot oflow-tax free port. Undoubtedly the Financial Secretary has to consider a lot oflow-tax free port. Undoubtedly the Financial Secretary has to consider a lot oflow-tax free port. Undoubtedly the Financial Secretary has to consider a lot of

things when he is trying to make the political, economic and social transition ofthings when he is trying to make the political, economic and social transition ofthings when he is trying to make the political, economic and social transition ofthings when he is trying to make the political, economic and social transition of

Hong Kong a smooth and steady one; sometimes he may have to subject to constraintsHong Kong a smooth and steady one; sometimes he may have to subject to constraintsHong Kong a smooth and steady one; sometimes he may have to subject to constraintsHong Kong a smooth and steady one; sometimes he may have to subject to constraints

and it is hard from him to state what ails him.and it is hard from him to state what ails him.and it is hard from him to state what ails him.and it is hard from him to state what ails him.

DEPUTY PRESIDENT: Dr WONG, you must observe Standing Orders and conclude your speech.DEPUTY PRESIDENT: Dr WONG, you must observe Standing Orders and conclude your speech.DEPUTY PRESIDENT: Dr WONG, you must observe Standing Orders and conclude your speech.DEPUTY PRESIDENT: Dr WONG, you must observe Standing Orders and conclude your speech.

DR PHILIP WONG (in Cantonese): My Deputy President, these are my remarks.DR PHILIP WONG (in Cantonese): My Deputy President, these are my remarks.DR PHILIP WONG (in Cantonese): My Deputy President, these are my remarks.DR PHILIP WONG (in Cantonese): My Deputy President, these are my remarks.

DR YEUNG SUM (in Cantonese): Mr Deputy President, when I saw the old barracks on myDR YEUNG SUM (in Cantonese): Mr Deputy President, when I saw the old barracks on myDR YEUNG SUM (in Cantonese): Mr Deputy President, when I saw the old barracks on myDR YEUNG SUM (in Cantonese): Mr Deputy President, when I saw the old barracks on my

way home via Cotton Tree Drive, I wondered why it was not converted into a park inway home via Cotton Tree Drive, I wondered why it was not converted into a park inway home via Cotton Tree Drive, I wondered why it was not converted into a park inway home via Cotton Tree Drive, I wondered why it was not converted into a park in

the interest of the community. I felt that some old things could be changed, if thethe interest of the community. I felt that some old things could be changed, if thethe interest of the community. I felt that some old things could be changed, if thethe interest of the community. I felt that some old things could be changed, if the

consideration was the interest of social progress.consideration was the interest of social progress.consideration was the interest of social progress.consideration was the interest of social progress.

The Budget is a major annual event of the Government and the focal point of thisThe Budget is a major annual event of the Government and the focal point of thisThe Budget is a major annual event of the Government and the focal point of thisThe Budget is a major annual event of the Government and the focal point of this

Council's annual debate. Since yesterday, every Member in this Council has made aCouncil's annual debate. Since yesterday, every Member in this Council has made aCouncil's annual debate. Since yesterday, every Member in this Council has made aCouncil's annual debate. Since yesterday, every Member in this Council has made a

speech concerning this year's Budget. But I say to myself that, apart from makingspeech concerning this year's Budget. But I say to myself that, apart from makingspeech concerning this year's Budget. But I say to myself that, apart from makingspeech concerning this year's Budget. But I say to myself that, apart from making

comments, the most important thing for us Legislative Council Members to do is tocomments, the most important thing for us Legislative Council Members to do is tocomments, the most important thing for us Legislative Council Members to do is tocomments, the most important thing for us Legislative Council Members to do is to

discharge our obligations as Legislative Council Members and act as a watch-dog ondischarge our obligations as Legislative Council Members and act as a watch-dog ondischarge our obligations as Legislative Council Members and act as a watch-dog ondischarge our obligations as Legislative Council Members and act as a watch-dog on

government spending, doing our utmost to urge the Government to change those financialgovernment spending, doing our utmost to urge the Government to change those financialgovernment spending, doing our utmost to urge the Government to change those financialgovernment spending, doing our utmost to urge the Government to change those financial

arrangements that are unreasonable, that are contrary to the public's wish and thatarrangements that are unreasonable, that are contrary to the public's wish and thatarrangements that are unreasonable, that are contrary to the public's wish and thatarrangements that are unreasonable, that are contrary to the public's wish and that

are not in the public's interest, not giving up till the final hour. This is theare not in the public's interest, not giving up till the final hour. This is theare not in the public's interest, not giving up till the final hour. This is theare not in the public's interest, not giving up till the final hour. This is the

way Legislative Council Members show self-respect and demonstrate their sense ofway Legislative Council Members show self-respect and demonstrate their sense ofway Legislative Council Members show self-respect and demonstrate their sense ofway Legislative Council Members show self-respect and demonstrate their sense of

responsibility towards the general public.responsibility towards the general public.responsibility towards the general public.responsibility towards the general public.

Through our colleagues in the Legislative Council, who spoke yesterday and today,Through our colleagues in the Legislative Council, who spoke yesterday and today,Through our colleagues in the Legislative Council, who spoke yesterday and today,Through our colleagues in the Legislative Council, who spoke yesterday and today,

the United Democrats of Hong Kong have made it very clear what legislative steps shouldthe United Democrats of Hong Kong have made it very clear what legislative steps shouldthe United Democrats of Hong Kong have made it very clear what legislative steps shouldthe United Democrats of Hong Kong have made it very clear what legislative steps should

be taken about, and what assessment should be made of, this year's Budget. The Unitedbe taken about, and what assessment should be made of, this year's Budget. The Unitedbe taken about, and what assessment should be made of, this year's Budget. The Unitedbe taken about, and what assessment should be made of, this year's Budget. The United

Democrats have always been dedicated to the promotion of Hong Kong's social stabilityDemocrats have always been dedicated to the promotion of Hong Kong's social stabilityDemocrats have always been dedicated to the promotion of Hong Kong's social stabilityDemocrats have always been dedicated to the promotion of Hong Kong's social stability

and prosperity and supports any government plan that is good for Hong Kong's economicand prosperity and supports any government plan that is good for Hong Kong's economicand prosperity and supports any government plan that is good for Hong Kong's economicand prosperity and supports any government plan that is good for Hong Kong's economic

development. However, the price of such plans must not be the sacrifice of thedevelopment. However, the price of such plans must not be the sacrifice of thedevelopment. However, the price of such plans must not be the sacrifice of thedevelopment. However, the price of such plans must not be the sacrifice of the

interests of the middle and lower income groups.interests of the middle and lower income groups.interests of the middle and lower income groups.interests of the middle and lower income groups.

Over the next six years, Hong Kong will gradually launch infrastructural projectsOver the next six years, Hong Kong will gradually launch infrastructural projectsOver the next six years, Hong Kong will gradually launch infrastructural projectsOver the next six years, Hong Kong will gradually launch infrastructural projects

that are the largest in the history of the territory. The Government's fiscalthat are the largest in the history of the territory. The Government's fiscalthat are the largest in the history of the territory. The Government's fiscalthat are the largest in the history of the territory. The Government's fiscal

planning will decisively be influenced by the Airport Core Programme in these sixplanning will decisively be influenced by the Airport Core Programme in these sixplanning will decisively be influenced by the Airport Core Programme in these sixplanning will decisively be influenced by the Airport Core Programme in these six

years. We can accept that the Government has to make early preparations for meetingyears. We can accept that the Government has to make early preparations for meetingyears. We can accept that the Government has to make early preparations for meetingyears. We can accept that the Government has to make early preparations for meeting

the huge costs of the new airport project. But we cannot accept that the means tothe huge costs of the new airport project. But we cannot accept that the means tothe huge costs of the new airport project. But we cannot accept that the means tothe huge costs of the new airport project. But we cannot accept that the means to

that end should be the deterioration of the quality of life of the middle and lowerthat end should be the deterioration of the quality of life of the middle and lowerthat end should be the deterioration of the quality of life of the middle and lowerthat end should be the deterioration of the quality of life of the middle and lower

income groups. Regrettably, we find that the Government apparently intends to doincome groups. Regrettably, we find that the Government apparently intends to doincome groups. Regrettably, we find that the Government apparently intends to doincome groups. Regrettably, we find that the Government apparently intends to do

precisely that.precisely that.precisely that.precisely that.

Compared with many other paCompared with many other paCompared with many other paCompared with many other parts of the world, Hong Kong's economic performancerts of the world, Hong Kong's economic performancerts of the world, Hong Kong's economic performancerts of the world, Hong Kong's economic performance

was not too bad in the past year or two. Regrettably, however, because of specialwas not too bad in the past year or two. Regrettably, however, because of specialwas not too bad in the past year or two. Regrettably, however, because of specialwas not too bad in the past year or two. Regrettably, however, because of special

factors, Hong Kong's inflation rate has for a long time remained high, at a two-factors, Hong Kong's inflation rate has for a long time remained high, at a two-factors, Hong Kong's inflation rate has for a long time remained high, at a two-factors, Hong Kong's inflation rate has for a long time remained high, at a two-

digit level. For the general public, the increases in real wages have definitelydigit level. For the general public, the increases in real wages have definitelydigit level. For the general public, the increases in real wages have definitelydigit level. For the general public, the increases in real wages have definitely

failed to catch up with the rate of inflation. The result has been a steady declinefailed to catch up with the rate of inflation. The result has been a steady declinefailed to catch up with the rate of inflation. The result has been a steady declinefailed to catch up with the rate of inflation. The result has been a steady decline

in the quality of life. During the 1991-92 financial year, the Government had a $14in the quality of life. During the 1991-92 financial year, the Government had a $14in the quality of life. During the 1991-92 financial year, the Government had a $14in the quality of life. During the 1991-92 financial year, the Government had a $14

billion surplus. Logically, this is a good time to improve the quality of life ofbillion surplus. Logically, this is a good time to improve the quality of life ofbillion surplus. Logically, this is a good time to improve the quality of life ofbillion surplus. Logically, this is a good time to improve the quality of life of

the middle and lower income groups. Regrettably, the Government fails to do so. Thethe middle and lower income groups. Regrettably, the Government fails to do so. Thethe middle and lower income groups. Regrettably, the Government fails to do so. Thethe middle and lower income groups. Regrettably, the Government fails to do so. The

watch word is "to prepare for the rainy days" for the sake of the new airport.watch word is "to prepare for the rainy days" for the sake of the new airport.watch word is "to prepare for the rainy days" for the sake of the new airport.watch word is "to prepare for the rainy days" for the sake of the new airport.

Accordingly, despite the huge Budget surplus, spending on social services continuesAccordingly, despite the huge Budget surplus, spending on social services continuesAccordingly, despite the huge Budget surplus, spending on social services continuesAccordingly, despite the huge Budget surplus, spending on social services continues

to be placed under tight control, and tax is being increased for the middle and lowerto be placed under tight control, and tax is being increased for the middle and lowerto be placed under tight control, and tax is being increased for the middle and lowerto be placed under tight control, and tax is being increased for the middle and lower

income groups. Dr HUANG Chen-ya has already made ample comments on this. I do notincome groups. Dr HUANG Chen-ya has already made ample comments on this. I do notincome groups. Dr HUANG Chen-ya has already made ample comments on this. I do notincome groups. Dr HUANG Chen-ya has already made ample comments on this. I do not

intend to repeat. We cannot accept the Financial Secretary doing things in such aintend to repeat. We cannot accept the Financial Secretary doing things in such aintend to repeat. We cannot accept the Financial Secretary doing things in such aintend to repeat. We cannot accept the Financial Secretary doing things in such a

way.way.way.way.

The United Democrats have openly said more than once that, if the GovernmentThe United Democrats have openly said more than once that, if the GovernmentThe United Democrats have openly said more than once that, if the GovernmentThe United Democrats have openly said more than once that, if the Government

really feels for the hardships of life now being experienced by the middle and lowerreally feels for the hardships of life now being experienced by the middle and lowerreally feels for the hardships of life now being experienced by the middle and lowerreally feels for the hardships of life now being experienced by the middle and lower

income groups, it should make four changes in this year's Budget:income groups, it should make four changes in this year's Budget:income groups, it should make four changes in this year's Budget:income groups, it should make four changes in this year's Budget:

(1)(1)(1)(1) Raise the personal allowance of the income tax to $64,000;Raise the personal allowance of the income tax to $64,000;Raise the personal allowance of the income tax to $64,000;Raise the personal allowance of the income tax to $64,000;

(2)(2)(2)(2) Abolish the 25% marginal rate and the 15% standard rate, and substitute aAbolish the 25% marginal rate and the 15% standard rate, and substitute aAbolish the 25% marginal rate and the 15% standard rate, and substitute aAbolish the 25% marginal rate and the 15% standard rate, and substitute a

17% rate for them. This will alleviate the tax burden for the middle income group17% rate for them. This will alleviate the tax burden for the middle income group17% rate for them. This will alleviate the tax burden for the middle income group17% rate for them. This will alleviate the tax burden for the middle income group

earning between $10,000 and $50,000 a month;earning between $10,000 and $50,000 a month;earning between $10,000 and $50,000 a month;earning between $10,000 and $50,000 a month;

(3)(3)(3)(3) Keep the 5.5% rates on property unchanged and extend the rates relief scheme;Keep the 5.5% rates on property unchanged and extend the rates relief scheme;Keep the 5.5% rates on property unchanged and extend the rates relief scheme;Keep the 5.5% rates on property unchanged and extend the rates relief scheme;

(4)(4)(4)(4) Increase spending on basic services such as education, medical and healthIncrease spending on basic services such as education, medical and healthIncrease spending on basic services such as education, medical and healthIncrease spending on basic services such as education, medical and health

services during the coming year. The increase should not be less than 15.4%, whichservices during the coming year. The increase should not be less than 15.4%, whichservices during the coming year. The increase should not be less than 15.4%, whichservices during the coming year. The increase should not be less than 15.4%, which

is the economy's growth rate in real terms plus the rate of inflation.is the economy's growth rate in real terms plus the rate of inflation.is the economy's growth rate in real terms plus the rate of inflation.is the economy's growth rate in real terms plus the rate of inflation.

These four points are fair and reasonable and in line with the wish of the generalThese four points are fair and reasonable and in line with the wish of the generalThese four points are fair and reasonable and in line with the wish of the generalThese four points are fair and reasonable and in line with the wish of the general

public. During the past two or three weeks, we tried to fight for them by differentpublic. During the past two or three weeks, we tried to fight for them by differentpublic. During the past two or three weeks, we tried to fight for them by differentpublic. During the past two or three weeks, we tried to fight for them by different

lawful means. At first, we hoped that the Financial Secretary would heed the public'slawful means. At first, we hoped that the Financial Secretary would heed the public'slawful means. At first, we hoped that the Financial Secretary would heed the public'slawful means. At first, we hoped that the Financial Secretary would heed the public's

views and make a move to change things. So we met with him several times.views and make a move to change things. So we met with him several times.views and make a move to change things. So we met with him several times.views and make a move to change things. So we met with him several times.

Regrettably, what we heard was "the Budget must be considered as a package and cannotRegrettably, what we heard was "the Budget must be considered as a package and cannotRegrettably, what we heard was "the Budget must be considered as a package and cannotRegrettably, what we heard was "the Budget must be considered as a package and cannot

be revised separately" and "if amendments are made according to your suggestions,be revised separately" and "if amendments are made according to your suggestions,be revised separately" and "if amendments are made according to your suggestions,be revised separately" and "if amendments are made according to your suggestions,

the fear is that you may form a bad bargaining habit." Those words are reallythe fear is that you may form a bad bargaining habit." Those words are reallythe fear is that you may form a bad bargaining habit." Those words are reallythe fear is that you may form a bad bargaining habit." Those words are really

disappointing.disappointing.disappointing.disappointing.

Since the Financial Secretary refused to take the initiative to revise the Budget,Since the Financial Secretary refused to take the initiative to revise the Budget,Since the Financial Secretary refused to take the initiative to revise the Budget,Since the Financial Secretary refused to take the initiative to revise the Budget,

what we could do was to move a motion for amendment ourselves. Regrettably, underwhat we could do was to move a motion for amendment ourselves. Regrettably, underwhat we could do was to move a motion for amendment ourselves. Regrettably, underwhat we could do was to move a motion for amendment ourselves. Regrettably, under

the operation of the present executive-led political system, any Legislative Councilthe operation of the present executive-led political system, any Legislative Councilthe operation of the present executive-led political system, any Legislative Councilthe operation of the present executive-led political system, any Legislative Council

Member wishing to move a motion for amending the Budget must have the prior approvalMember wishing to move a motion for amending the Budget must have the prior approvalMember wishing to move a motion for amending the Budget must have the prior approvalMember wishing to move a motion for amending the Budget must have the prior approval

of the Governor. Regrettably again, our Governor is not broad-minded enough to letof the Governor. Regrettably again, our Governor is not broad-minded enough to letof the Governor. Regrettably again, our Governor is not broad-minded enough to letof the Governor. Regrettably again, our Governor is not broad-minded enough to let

us move a motion for amendment or to let us have a chance to debate a motion forus move a motion for amendment or to let us have a chance to debate a motion forus move a motion for amendment or to let us have a chance to debate a motion forus move a motion for amendment or to let us have a chance to debate a motion for

amendment.amendment.amendment.amendment.

The above is what has happened so far. Now, there is only one remaining chanceThe above is what has happened so far. Now, there is only one remaining chanceThe above is what has happened so far. Now, there is only one remaining chanceThe above is what has happened so far. Now, there is only one remaining chance

for forcing amendments on the Budget. All of the Members of the Legislative Council,for forcing amendments on the Budget. All of the Members of the Legislative Council,for forcing amendments on the Budget. All of the Members of the Legislative Council,for forcing amendments on the Budget. All of the Members of the Legislative Council,

acting in unison, can tell the Government that, if it continues along its arbitraryacting in unison, can tell the Government that, if it continues along its arbitraryacting in unison, can tell the Government that, if it continues along its arbitraryacting in unison, can tell the Government that, if it continues along its arbitrary

course and refuses to amend the Budget, then, on 1 April, we will all vote downcourse and refuses to amend the Budget, then, on 1 April, we will all vote downcourse and refuses to amend the Budget, then, on 1 April, we will all vote downcourse and refuses to amend the Budget, then, on 1 April, we will all vote down

the Appropriation Bill. As this Council some time ago passed a resolution tothe Appropriation Bill. As this Council some time ago passed a resolution tothe Appropriation Bill. As this Council some time ago passed a resolution tothe Appropriation Bill. As this Council some time ago passed a resolution to

appropriate a sum of money to the Government in advance, the dissenting votes castappropriate a sum of money to the Government in advance, the dissenting votes castappropriate a sum of money to the Government in advance, the dissenting votes castappropriate a sum of money to the Government in advance, the dissenting votes cast

by all the Members of this Council on 1 April would still leave the Governmentby all the Members of this Council on 1 April would still leave the Governmentby all the Members of this Council on 1 April would still leave the Governmentby all the Members of this Council on 1 April would still leave the Government

with $39 billion of the public fund to spend. I stress that we have already votedwith $39 billion of the public fund to spend. I stress that we have already votedwith $39 billion of the public fund to spend. I stress that we have already votedwith $39 billion of the public fund to spend. I stress that we have already voted

to approve the appropriation of $39 billion for the Government to spend. The Unitedto approve the appropriation of $39 billion for the Government to spend. The Unitedto approve the appropriation of $39 billion for the Government to spend. The Unitedto approve the appropriation of $39 billion for the Government to spend. The United

Democrats at the time did not oppose the appropriation in any manner. Therefore,Democrats at the time did not oppose the appropriation in any manner. Therefore,Democrats at the time did not oppose the appropriation in any manner. Therefore,Democrats at the time did not oppose the appropriation in any manner. Therefore,

even if we all vote "no" on 1 April, thus blocking the passage of the Budget, theeven if we all vote "no" on 1 April, thus blocking the passage of the Budget, theeven if we all vote "no" on 1 April, thus blocking the passage of the Budget, theeven if we all vote "no" on 1 April, thus blocking the passage of the Budget, the

operations of the Government will still not be paralysed. Just now, Mr Steven POONoperations of the Government will still not be paralysed. Just now, Mr Steven POONoperations of the Government will still not be paralysed. Just now, Mr Steven POONoperations of the Government will still not be paralysed. Just now, Mr Steven POON

said that, according to the Basic Law, if the Budget fails to be passed, the Chiefsaid that, according to the Basic Law, if the Budget fails to be passed, the Chiefsaid that, according to the Basic Law, if the Budget fails to be passed, the Chiefsaid that, according to the Basic Law, if the Budget fails to be passed, the Chief

Executive may dissolve the Legislative Council. This is true. But it applies onlyExecutive may dissolve the Legislative Council. This is true. But it applies onlyExecutive may dissolve the Legislative Council. This is true. But it applies onlyExecutive may dissolve the Legislative Council. This is true. But it applies only

when the Budget fails to be passed for the second time. If the Budget, upon beingwhen the Budget fails to be passed for the second time. If the Budget, upon beingwhen the Budget fails to be passed for the second time. If the Budget, upon beingwhen the Budget fails to be passed for the second time. If the Budget, upon being

presented for the second time, still fails to be passed, then he will have the powerpresented for the second time, still fails to be passed, then he will have the powerpresented for the second time, still fails to be passed, then he will have the powerpresented for the second time, still fails to be passed, then he will have the power

to dissolve the Legislative Council. It does not apply to the first time. Afterto dissolve the Legislative Council. It does not apply to the first time. Afterto dissolve the Legislative Council. It does not apply to the first time. Afterto dissolve the Legislative Council. It does not apply to the first time. After

we vote "no" the first time, the Financial Secretary will have received a signal.we vote "no" the first time, the Financial Secretary will have received a signal.we vote "no" the first time, the Financial Secretary will have received a signal.we vote "no" the first time, the Financial Secretary will have received a signal.

He will accordingly amend the Budget. When he presents his Budget for the secondHe will accordingly amend the Budget. When he presents his Budget for the secondHe will accordingly amend the Budget. When he presents his Budget for the secondHe will accordingly amend the Budget. When he presents his Budget for the second

time, I believe that the Legislative Council will not vote against it. In fact, thetime, I believe that the Legislative Council will not vote against it. In fact, thetime, I believe that the Legislative Council will not vote against it. In fact, thetime, I believe that the Legislative Council will not vote against it. In fact, the

real effect of the dissenting votes is to force the Financial Secretary to submitreal effect of the dissenting votes is to force the Financial Secretary to submitreal effect of the dissenting votes is to force the Financial Secretary to submitreal effect of the dissenting votes is to force the Financial Secretary to submit

to the public's wish and amend the Budget accordingly. I wish to stress that thisto the public's wish and amend the Budget accordingly. I wish to stress that thisto the public's wish and amend the Budget accordingly. I wish to stress that thisto the public's wish and amend the Budget accordingly. I wish to stress that this

is consistent with the power vested by law in the Legislative Council for monitoringis consistent with the power vested by law in the Legislative Council for monitoringis consistent with the power vested by law in the Legislative Council for monitoringis consistent with the power vested by law in the Legislative Council for monitoring

the operations of the Government and is something that a Member should do if he isthe operations of the Government and is something that a Member should do if he isthe operations of the Government and is something that a Member should do if he isthe operations of the Government and is something that a Member should do if he is

faithful to his duty. Regrettably, after two days of debate, I have been made tofaithful to his duty. Regrettably, after two days of debate, I have been made tofaithful to his duty. Regrettably, after two days of debate, I have been made tofaithful to his duty. Regrettably, after two days of debate, I have been made to

feel that the chances are not good. Many Members have said openly that they willfeel that the chances are not good. Many Members have said openly that they willfeel that the chances are not good. Many Members have said openly that they willfeel that the chances are not good. Many Members have said openly that they will

fight for the interest of the middle income group. Regrettably, they now say that,fight for the interest of the middle income group. Regrettably, they now say that,fight for the interest of the middle income group. Regrettably, they now say that,fight for the interest of the middle income group. Regrettably, they now say that,

on 1 April, they will not vote down the Appropriation Bill. Just now, Mr Henry TANGon 1 April, they will not vote down the Appropriation Bill. Just now, Mr Henry TANGon 1 April, they will not vote down the Appropriation Bill. Just now, Mr Henry TANGon 1 April, they will not vote down the Appropriation Bill. Just now, Mr Henry TANG

said that, according to some Members, the Co-operative Resources Centre has changedsaid that, according to some Members, the Co-operative Resources Centre has changedsaid that, according to some Members, the Co-operative Resources Centre has changedsaid that, according to some Members, the Co-operative Resources Centre has changed

course, the reason being that the Co-operative Resources Centre has never openlycourse, the reason being that the Co-operative Resources Centre has never openlycourse, the reason being that the Co-operative Resources Centre has never openlycourse, the reason being that the Co-operative Resources Centre has never openly

opposed the Appropriation Bill. That is a right thing to say. But the point is thatopposed the Appropriation Bill. That is a right thing to say. But the point is thatopposed the Appropriation Bill. That is a right thing to say. But the point is thatopposed the Appropriation Bill. That is a right thing to say. But the point is that

the Co-operative Resources Centre has voiced open support for the Budget too soon;the Co-operative Resources Centre has voiced open support for the Budget too soon;the Co-operative Resources Centre has voiced open support for the Budget too soon;the Co-operative Resources Centre has voiced open support for the Budget too soon;

and it has said too soon that it will not vote down the Appropriation Bill. As aand it has said too soon that it will not vote down the Appropriation Bill. As aand it has said too soon that it will not vote down the Appropriation Bill. As aand it has said too soon that it will not vote down the Appropriation Bill. As a

result, the Co-operative Resources Centre has missed an opportunity to bargain withresult, the Co-operative Resources Centre has missed an opportunity to bargain withresult, the Co-operative Resources Centre has missed an opportunity to bargain withresult, the Co-operative Resources Centre has missed an opportunity to bargain with

the Government, while the Government has been so emboldened that it has turned a deafthe Government, while the Government has been so emboldened that it has turned a deafthe Government, while the Government has been so emboldened that it has turned a deafthe Government, while the Government has been so emboldened that it has turned a deaf

ear to all requests by Members to move motions for amendment.ear to all requests by Members to move motions for amendment.ear to all requests by Members to move motions for amendment.ear to all requests by Members to move motions for amendment.

I wish to point out here that, if the Co-operative Resources Centre's whole-I wish to point out here that, if the Co-operative Resources Centre's whole-I wish to point out here that, if the Co-operative Resources Centre's whole-I wish to point out here that, if the Co-operative Resources Centre's whole-

hearted dedication to the interest of the public is real, then it should considerhearted dedication to the interest of the public is real, then it should considerhearted dedication to the interest of the public is real, then it should considerhearted dedication to the interest of the public is real, then it should consider

changing its mind now. It is true that there are differences between the Unitedchanging its mind now. It is true that there are differences between the Unitedchanging its mind now. It is true that there are differences between the Unitedchanging its mind now. It is true that there are differences between the United

Democrats and the Co-operative Resources Centre. Still, we would like to make anDemocrats and the Co-operative Resources Centre. Still, we would like to make anDemocrats and the Co-operative Resources Centre. Still, we would like to make anDemocrats and the Co-operative Resources Centre. Still, we would like to make an

appeal here. Let us "forget our past favours and grudges with a smile." Let us holdappeal here. Let us "forget our past favours and grudges with a smile." Let us holdappeal here. Let us "forget our past favours and grudges with a smile." Let us holdappeal here. Let us "forget our past favours and grudges with a smile." Let us hold

hands and, on 1 April, openly tell the Financial Secretary that, unless he amendshands and, on 1 April, openly tell the Financial Secretary that, unless he amendshands and, on 1 April, openly tell the Financial Secretary that, unless he amendshands and, on 1 April, openly tell the Financial Secretary that, unless he amends

the Budget, we will vote against it in unison. In this way, we can force the Financialthe Budget, we will vote against it in unison. In this way, we can force the Financialthe Budget, we will vote against it in unison. In this way, we can force the Financialthe Budget, we will vote against it in unison. In this way, we can force the Financial

Secretary to revise the Budget and further the public's interest in Hong Kong. ISecretary to revise the Budget and further the public's interest in Hong Kong. ISecretary to revise the Budget and further the public's interest in Hong Kong. ISecretary to revise the Budget and further the public's interest in Hong Kong. I

believe that Mr NG Ming-yum will support such a position absolutely.believe that Mr NG Ming-yum will support such a position absolutely.believe that Mr NG Ming-yum will support such a position absolutely.believe that Mr NG Ming-yum will support such a position absolutely.

MRS SELINA CHOW: Mr Deputy President, a point of elucidation. Since Dr YEUNG hasMRS SELINA CHOW: Mr Deputy President, a point of elucidation. Since Dr YEUNG hasMRS SELINA CHOW: Mr Deputy President, a point of elucidation. Since Dr YEUNG hasMRS SELINA CHOW: Mr Deputy President, a point of elucidation. Since Dr YEUNG has

mentioned that we have voted a 25% interim expenditure for the Government to operatementioned that we have voted a 25% interim expenditure for the Government to operatementioned that we have voted a 25% interim expenditure for the Government to operatementioned that we have voted a 25% interim expenditure for the Government to operate

on pending the voting in of the Appropriation Bill, may I ask if we were to vote downon pending the voting in of the Appropriation Bill, may I ask if we were to vote downon pending the voting in of the Appropriation Bill, may I ask if we were to vote downon pending the voting in of the Appropriation Bill, may I ask if we were to vote down

the Appropriation Bill and when the 25% voted-in expenditure has been exhausted whatthe Appropriation Bill and when the 25% voted-in expenditure has been exhausted whatthe Appropriation Bill and when the 25% voted-in expenditure has been exhausted whatthe Appropriation Bill and when the 25% voted-in expenditure has been exhausted what

will happen to the operation of the Government?will happen to the operation of the Government?will happen to the operation of the Government?will happen to the operation of the Government?

DEPUTY PRESIDENT: Dr YEUNG, did you catch the intervention?DEPUTY PRESIDENT: Dr YEUNG, did you catch the intervention?DEPUTY PRESIDENT: Dr YEUNG, did you catch the intervention?DEPUTY PRESIDENT: Dr YEUNG, did you catch the intervention?

DR YEUNG SUM: Yes, Mr Deputy President.DR YEUNG SUM: Yes, Mr Deputy President.DR YEUNG SUM: Yes, Mr Deputy President.DR YEUNG SUM: Yes, Mr Deputy President.

DEPUTY PRESIDENT: It is up to you whether you do wish to elucidate.DEPUTY PRESIDENT: It is up to you whether you do wish to elucidate.DEPUTY PRESIDENT: It is up to you whether you do wish to elucidate.DEPUTY PRESIDENT: It is up to you whether you do wish to elucidate.

DR YEUNG SUM (in Cantonese): The $39 billion will be sufficient for the GovernmentDR YEUNG SUM (in Cantonese): The $39 billion will be sufficient for the GovernmentDR YEUNG SUM (in Cantonese): The $39 billion will be sufficient for the GovernmentDR YEUNG SUM (in Cantonese): The $39 billion will be sufficient for the Government

to spend for three months. If the Financial Secretary presents a new Budget withinto spend for three months. If the Financial Secretary presents a new Budget withinto spend for three months. If the Financial Secretary presents a new Budget withinto spend for three months. If the Financial Secretary presents a new Budget within

this period, I believe that we will not oppose it, especially if he heeds our viewsthis period, I believe that we will not oppose it, especially if he heeds our viewsthis period, I believe that we will not oppose it, especially if he heeds our viewsthis period, I believe that we will not oppose it, especially if he heeds our views

and makes some changes in it. As a political party representing the public andand makes some changes in it. As a political party representing the public andand makes some changes in it. As a political party representing the public andand makes some changes in it. As a political party representing the public and

championing the public's cause, the United Democrats will consistently adhere to thechampioning the public's cause, the United Democrats will consistently adhere to thechampioning the public's cause, the United Democrats will consistently adhere to thechampioning the public's cause, the United Democrats will consistently adhere to the

public's wish. It is hoped that the Financial Secretary will heed the public's wishpublic's wish. It is hoped that the Financial Secretary will heed the public's wishpublic's wish. It is hoped that the Financial Secretary will heed the public's wishpublic's wish. It is hoped that the Financial Secretary will heed the public's wish

and revise the Budget. If he revises it, we will be quite willing to support himand revise the Budget. If he revises it, we will be quite willing to support himand revise the Budget. If he revises it, we will be quite willing to support himand revise the Budget. If he revises it, we will be quite willing to support him

on 1 April. If the Financial Secretary should continue along his arbitrary courseon 1 April. If the Financial Secretary should continue along his arbitrary courseon 1 April. If the Financial Secretary should continue along his arbitrary courseon 1 April. If the Financial Secretary should continue along his arbitrary course

and refuse to make any change in the Budget, then we would be forced to vote "no".and refuse to make any change in the Budget, then we would be forced to vote "no".and refuse to make any change in the Budget, then we would be forced to vote "no".and refuse to make any change in the Budget, then we would be forced to vote "no".

Now, when I go home via Cotton Tree Drive, I find that the old barracks have beenNow, when I go home via Cotton Tree Drive, I find that the old barracks have beenNow, when I go home via Cotton Tree Drive, I find that the old barracks have beenNow, when I go home via Cotton Tree Drive, I find that the old barracks have been

converted into a magnificent park. The truth is that old things can be changed inconverted into a magnificent park. The truth is that old things can be changed inconverted into a magnificent park. The truth is that old things can be changed inconverted into a magnificent park. The truth is that old things can be changed in

the overall interest of the community. This is what we should do. I believe that,the overall interest of the community. This is what we should do. I believe that,the overall interest of the community. This is what we should do. I believe that,the overall interest of the community. This is what we should do. I believe that,

in the course of the construction of the park, many decisions were made, requiringin the course of the construction of the park, many decisions were made, requiringin the course of the construction of the park, many decisions were made, requiringin the course of the construction of the park, many decisions were made, requiring

patience, hard work and courage. I hope that the Financial Secretary will work withpatience, hard work and courage. I hope that the Financial Secretary will work withpatience, hard work and courage. I hope that the Financial Secretary will work withpatience, hard work and courage. I hope that the Financial Secretary will work with

us in the overall interest of Hong Kong.us in the overall interest of Hong Kong.us in the overall interest of Hong Kong.us in the overall interest of Hong Kong.

MR HOWARD YOUNG (in Cantonese): Mr Deputy President, is the Budget for 1992 in lineMR HOWARD YOUNG (in Cantonese): Mr Deputy President, is the Budget for 1992 in lineMR HOWARD YOUNG (in Cantonese): Mr Deputy President, is the Budget for 1992 in lineMR HOWARD YOUNG (in Cantonese): Mr Deputy President, is the Budget for 1992 in line

with the principle of "keeping expenditure within the limits of revenues"?with the principle of "keeping expenditure within the limits of revenues"?with the principle of "keeping expenditure within the limits of revenues"?with the principle of "keeping expenditure within the limits of revenues"?

Given the projected surplus of $14.1 billion this year and the projected sGiven the projected surplus of $14.1 billion this year and the projected sGiven the projected surplus of $14.1 billion this year and the projected sGiven the projected surplus of $14.1 billion this year and the projected surplusurplusurplusurplus

of $5.1 billion next year, expenditure figures are, in my view, far short of expectedof $5.1 billion next year, expenditure figures are, in my view, far short of expectedof $5.1 billion next year, expenditure figures are, in my view, far short of expectedof $5.1 billion next year, expenditure figures are, in my view, far short of expected

revenue. So I do not find the expenditure figures excessive. In fact there are somerevenue. So I do not find the expenditure figures excessive. In fact there are somerevenue. So I do not find the expenditure figures excessive. In fact there are somerevenue. So I do not find the expenditure figures excessive. In fact there are some

areas, such as resources for the police and education where I think we could spendareas, such as resources for the police and education where I think we could spendareas, such as resources for the police and education where I think we could spendareas, such as resources for the police and education where I think we could spend

more. It is a Budget that seeks to keep revenue well above the needs of expenditure.more. It is a Budget that seeks to keep revenue well above the needs of expenditure.more. It is a Budget that seeks to keep revenue well above the needs of expenditure.more. It is a Budget that seeks to keep revenue well above the needs of expenditure.

I do not subscribe to the theory that the infrastructure projects related to theI do not subscribe to the theory that the infrastructure projects related to theI do not subscribe to the theory that the infrastructure projects related to theI do not subscribe to the theory that the infrastructure projects related to the

new airport and port are draining resources at the expense of welfare. Members ofnew airport and port are draining resources at the expense of welfare. Members ofnew airport and port are draining resources at the expense of welfare. Members ofnew airport and port are draining resources at the expense of welfare. Members of

the tourism industry regard the airport as an essential investment for the long-the tourism industry regard the airport as an essential investment for the long-the tourism industry regard the airport as an essential investment for the long-the tourism industry regard the airport as an essential investment for the long-

term future of Hong Kong and without it the employment of hundreds of thousands ofterm future of Hong Kong and without it the employment of hundreds of thousands ofterm future of Hong Kong and without it the employment of hundreds of thousands ofterm future of Hong Kong and without it the employment of hundreds of thousands of

people in the tourism and related industries will be at stake. I am confident thatpeople in the tourism and related industries will be at stake. I am confident thatpeople in the tourism and related industries will be at stake. I am confident thatpeople in the tourism and related industries will be at stake. I am confident that

the investment today in our infrastructure will bring economic growth and returnsthe investment today in our infrastructure will bring economic growth and returnsthe investment today in our infrastructure will bring economic growth and returnsthe investment today in our infrastructure will bring economic growth and returns

to those who will be staying and working in Hong Kong after 1997.to those who will be staying and working in Hong Kong after 1997.to those who will be staying and working in Hong Kong after 1997.to those who will be staying and working in Hong Kong after 1997.

As a new Legislative Councillor, like many other colleagues, I would confrontAs a new Legislative Councillor, like many other colleagues, I would confrontAs a new Legislative Councillor, like many other colleagues, I would confrontAs a new Legislative Councillor, like many other colleagues, I would confront

the Budget of the Hong Kong Government in a totally different light from that of athe Budget of the Hong Kong Government in a totally different light from that of athe Budget of the Hong Kong Government in a totally different light from that of athe Budget of the Hong Kong Government in a totally different light from that of a

layman who would say to himself, "How does the Budget and taxation affect melayman who would say to himself, "How does the Budget and taxation affect melayman who would say to himself, "How does the Budget and taxation affect melayman who would say to himself, "How does the Budget and taxation affect me

personally". Rather I would look at it from the viewpoint of "How will this affectpersonally". Rather I would look at it from the viewpoint of "How will this affectpersonally". Rather I would look at it from the viewpoint of "How will this affectpersonally". Rather I would look at it from the viewpoint of "How will this affect

my constituents -- how will this affect the man in the street -- how will this affectmy constituents -- how will this affect the man in the street -- how will this affectmy constituents -- how will this affect the man in the street -- how will this affectmy constituents -- how will this affect the man in the street -- how will this affect

different sectors of the economy -- how will this affect the interests of the wholedifferent sectors of the economy -- how will this affect the interests of the wholedifferent sectors of the economy -- how will this affect the interests of the wholedifferent sectors of the economy -- how will this affect the interests of the whole

community?" I would like to repeat what Mr SZETO Wah said yesterday, "Could Icommunity?" I would like to repeat what Mr SZETO Wah said yesterday, "Could Icommunity?" I would like to repeat what Mr SZETO Wah said yesterday, "Could Icommunity?" I would like to repeat what Mr SZETO Wah said yesterday, "Could I

represent the views of my constituents?represent the views of my constituents?represent the views of my constituents?represent the views of my constituents?

During the BDuring the BDuring the BDuring the Budget exercise, I have felt the importance and value of division ofudget exercise, I have felt the importance and value of division ofudget exercise, I have felt the importance and value of division ofudget exercise, I have felt the importance and value of division of

labour and co-operation amongst fellow Councillors in trying to sift through the masslabour and co-operation amongst fellow Councillors in trying to sift through the masslabour and co-operation amongst fellow Councillors in trying to sift through the masslabour and co-operation amongst fellow Councillors in trying to sift through the mass

of information that comprises the way the Government is proposing to spend the $115.1of information that comprises the way the Government is proposing to spend the $115.1of information that comprises the way the Government is proposing to spend the $115.1of information that comprises the way the Government is proposing to spend the $115.1

billion of taxpayers' money. Many long hours of discussion and exchange ofbillion of taxpayers' money. Many long hours of discussion and exchange ofbillion of taxpayers' money. Many long hours of discussion and exchange ofbillion of taxpayers' money. Many long hours of discussion and exchange of

experience amongst members of the Co-operative Resources Centre has enabled us toexperience amongst members of the Co-operative Resources Centre has enabled us toexperience amongst members of the Co-operative Resources Centre has enabled us toexperience amongst members of the Co-operative Resources Centre has enabled us to

compare the philosophies of government spending with the values that we share. Icompare the philosophies of government spending with the values that we share. Icompare the philosophies of government spending with the values that we share. Icompare the philosophies of government spending with the values that we share. I

believe that these values are shared not just by a group of Legislative Councillors,believe that these values are shared not just by a group of Legislative Councillors,believe that these values are shared not just by a group of Legislative Councillors,believe that these values are shared not just by a group of Legislative Councillors,

but also by the bulk of the members of the travel and tourism industry.but also by the bulk of the members of the travel and tourism industry.but also by the bulk of the members of the travel and tourism industry.but also by the bulk of the members of the travel and tourism industry.

The crux of these values as related to the Budget includes whether the BudgetThe crux of these values as related to the Budget includes whether the BudgetThe crux of these values as related to the Budget includes whether the BudgetThe crux of these values as related to the Budget includes whether the Budget

provides for an improvement in the quality of life in Hong Kong; and whether it isprovides for an improvement in the quality of life in Hong Kong; and whether it isprovides for an improvement in the quality of life in Hong Kong; and whether it isprovides for an improvement in the quality of life in Hong Kong; and whether it is

conducive to retaining a healthy environment for investment so that more wealth canconducive to retaining a healthy environment for investment so that more wealth canconducive to retaining a healthy environment for investment so that more wealth canconducive to retaining a healthy environment for investment so that more wealth can

be created for the whole community. In addition, is the Budget moving towards orbe created for the whole community. In addition, is the Budget moving towards orbe created for the whole community. In addition, is the Budget moving towards orbe created for the whole community. In addition, is the Budget moving towards or

against helping to achieve a smooth transition for the long-term benefit of Hong Kong?against helping to achieve a smooth transition for the long-term benefit of Hong Kong?against helping to achieve a smooth transition for the long-term benefit of Hong Kong?against helping to achieve a smooth transition for the long-term benefit of Hong Kong?

It is in this light that I make comments on the Budget, both favourable andIt is in this light that I make comments on the Budget, both favourable andIt is in this light that I make comments on the Budget, both favourable andIt is in this light that I make comments on the Budget, both favourable and

unfavourable.unfavourable.unfavourable.unfavourable.

Corporate profits taxCorporate profits taxCorporate profits taxCorporate profits tax

Firstly, the 1% increase in corporate profits tax has drawn little adverse commentFirstly, the 1% increase in corporate profits tax has drawn little adverse commentFirstly, the 1% increase in corporate profits tax has drawn little adverse commentFirstly, the 1% increase in corporate profits tax has drawn little adverse comment

from even owners of businesses in my industry. For those who can show healthy returnsfrom even owners of businesses in my industry. For those who can show healthy returnsfrom even owners of businesses in my industry. For those who can show healthy returnsfrom even owners of businesses in my industry. For those who can show healthy returns

to their businesses, most find the increase bearable. However, this is not the startto their businesses, most find the increase bearable. However, this is not the startto their businesses, most find the increase bearable. However, this is not the startto their businesses, most find the increase bearable. However, this is not the start

of a general trend of increasing the level of taxation in Hong Kong. It has beenof a general trend of increasing the level of taxation in Hong Kong. It has beenof a general trend of increasing the level of taxation in Hong Kong. It has beenof a general trend of increasing the level of taxation in Hong Kong. It has been

pointed out that of the three segments of the tourist industry, hotels, airlines andpointed out that of the three segments of the tourist industry, hotels, airlines andpointed out that of the three segments of the tourist industry, hotels, airlines andpointed out that of the three segments of the tourist industry, hotels, airlines and

travel agents, many travel agents are probably hard pushed to make a 1% gross turnovertravel agents, many travel agents are probably hard pushed to make a 1% gross turnovertravel agents, many travel agents are probably hard pushed to make a 1% gross turnovertravel agents, many travel agents are probably hard pushed to make a 1% gross turnover

in profit; so to pay 1% out of that 1% will amount only to 0.01%, which is not anin profit; so to pay 1% out of that 1% will amount only to 0.01%, which is not anin profit; so to pay 1% out of that 1% will amount only to 0.01%, which is not anin profit; so to pay 1% out of that 1% will amount only to 0.01%, which is not an

excessive burden.excessive burden.excessive burden.excessive burden.

I do have rI do have rI do have rI do have reservations on whether it is really necessary for the Government toeservations on whether it is really necessary for the Government toeservations on whether it is really necessary for the Government toeservations on whether it is really necessary for the Government to

hoard money for the sake of hoarding it, given our substantial surplus which is thehoard money for the sake of hoarding it, given our substantial surplus which is thehoard money for the sake of hoarding it, given our substantial surplus which is thehoard money for the sake of hoarding it, given our substantial surplus which is the

envy of many countries and places around the world. After all money sitting inenvy of many countries and places around the world. After all money sitting inenvy of many countries and places around the world. After all money sitting inenvy of many countries and places around the world. After all money sitting in

surpluses is really draining resources that could be productively used to encouragesurpluses is really draining resources that could be productively used to encouragesurpluses is really draining resources that could be productively used to encouragesurpluses is really draining resources that could be productively used to encourage

growth in the economy through private investment.growth in the economy through private investment.growth in the economy through private investment.growth in the economy through private investment.

The fact that our level of taxation is lower than that of most places in the regionThe fact that our level of taxation is lower than that of most places in the regionThe fact that our level of taxation is lower than that of most places in the regionThe fact that our level of taxation is lower than that of most places in the region

is not good enough an excuse to bring in increases. In fact the general trend ofis not good enough an excuse to bring in increases. In fact the general trend ofis not good enough an excuse to bring in increases. In fact the general trend ofis not good enough an excuse to bring in increases. In fact the general trend of

developed economies is to decrease the burden of taxation in order to encouragedeveloped economies is to decrease the burden of taxation in order to encouragedeveloped economies is to decrease the burden of taxation in order to encouragedeveloped economies is to decrease the burden of taxation in order to encourage

economic growth -- look at Singapore which has recently decreased its taxes.economic growth -- look at Singapore which has recently decreased its taxes.economic growth -- look at Singapore which has recently decreased its taxes.economic growth -- look at Singapore which has recently decreased its taxes.

We also must not forget that right next to Hong Kong there are a number of We also must not forget that right next to Hong Kong there are a number of We also must not forget that right next to Hong Kong there are a number of We also must not forget that right next to Hong Kong there are a number of specialspecialspecialspecial

economic zones in China where the corporate taxation level is as low as 15%, and theeconomic zones in China where the corporate taxation level is as low as 15%, and theeconomic zones in China where the corporate taxation level is as low as 15%, and theeconomic zones in China where the corporate taxation level is as low as 15%, and the

offer of tax holidays is another incentive to attract investment. I am sure thatoffer of tax holidays is another incentive to attract investment. I am sure thatoffer of tax holidays is another incentive to attract investment. I am sure thatoffer of tax holidays is another incentive to attract investment. I am sure that

with the recent renewed impetus of reform in China, there will be even more aggressivewith the recent renewed impetus of reform in China, there will be even more aggressivewith the recent renewed impetus of reform in China, there will be even more aggressivewith the recent renewed impetus of reform in China, there will be even more aggressive

moves towards attracting investors.moves towards attracting investors.moves towards attracting investors.moves towards attracting investors.

Mr Deputy President, the Financial Secretary has attempted to give reassurancesMr Deputy President, the Financial Secretary has attempted to give reassurancesMr Deputy President, the Financial Secretary has attempted to give reassurancesMr Deputy President, the Financial Secretary has attempted to give reassurances

that the economic philosophy of free enterprise as the basis of economic growth willthat the economic philosophy of free enterprise as the basis of economic growth willthat the economic philosophy of free enterprise as the basis of economic growth willthat the economic philosophy of free enterprise as the basis of economic growth will

be continued. This is to be welcomed, but will also be watched with a hawk's eyebe continued. This is to be welcomed, but will also be watched with a hawk's eyebe continued. This is to be welcomed, but will also be watched with a hawk's eyebe continued. This is to be welcomed, but will also be watched with a hawk's eye

forthwith to see that the words are reflected in deeds.forthwith to see that the words are reflected in deeds.forthwith to see that the words are reflected in deeds.forthwith to see that the words are reflected in deeds.

Airport and sales taxAirport and sales taxAirport and sales taxAirport and sales tax

To borrow the words of the Chairman of the Travel Industry Council of Hong KongTo borrow the words of the Chairman of the Travel Industry Council of Hong KongTo borrow the words of the Chairman of the Travel Industry Council of Hong KongTo borrow the words of the Chairman of the Travel Industry Council of Hong Kong

last Friday: "The industry is disappointed that, in light of the surplus, thelast Friday: "The industry is disappointed that, in light of the surplus, thelast Friday: "The industry is disappointed that, in light of the surplus, thelast Friday: "The industry is disappointed that, in light of the surplus, the

Government has not agreed to lower the airport tax of Hong Kong, but we can take someGovernment has not agreed to lower the airport tax of Hong Kong, but we can take someGovernment has not agreed to lower the airport tax of Hong Kong, but we can take someGovernment has not agreed to lower the airport tax of Hong Kong, but we can take some

consolation in seeing that a sales tax has not been introduced." I believe that theconsolation in seeing that a sales tax has not been introduced." I believe that theconsolation in seeing that a sales tax has not been introduced." I believe that theconsolation in seeing that a sales tax has not been introduced." I believe that the

Chairman of the Hong Kong Tourist Association, who also sits in this Chamber, willChairman of the Hong Kong Tourist Association, who also sits in this Chamber, willChairman of the Hong Kong Tourist Association, who also sits in this Chamber, willChairman of the Hong Kong Tourist Association, who also sits in this Chamber, will

share this view.share this view.share this view.share this view.

The tourist industry and related trades employs over 100 000 people in Hong KongThe tourist industry and related trades employs over 100 000 people in Hong KongThe tourist industry and related trades employs over 100 000 people in Hong KongThe tourist industry and related trades employs over 100 000 people in Hong Kong

and the expenditure by over six million tourists that come here injects more thanand the expenditure by over six million tourists that come here injects more thanand the expenditure by over six million tourists that come here injects more thanand the expenditure by over six million tourists that come here injects more than

$39 billion into the economy. We must not be complacent in thinking that since six$39 billion into the economy. We must not be complacent in thinking that since six$39 billion into the economy. We must not be complacent in thinking that since six$39 billion into the economy. We must not be complacent in thinking that since six

million overseas tourists, as against two million Hong Kong residents, pay this tax,million overseas tourists, as against two million Hong Kong residents, pay this tax,million overseas tourists, as against two million Hong Kong residents, pay this tax,million overseas tourists, as against two million Hong Kong residents, pay this tax,

and that overseas tourists only complain about it after they have left Hong Kong,and that overseas tourists only complain about it after they have left Hong Kong,and that overseas tourists only complain about it after they have left Hong Kong,and that overseas tourists only complain about it after they have left Hong Kong,

we can treat them as cows to be milked. To quote the words of the Chairman of thewe can treat them as cows to be milked. To quote the words of the Chairman of thewe can treat them as cows to be milked. To quote the words of the Chairman of thewe can treat them as cows to be milked. To quote the words of the Chairman of the

Hong Kong Hotels Association; "Each of them will leave with the feeling that HongHong Kong Hotels Association; "Each of them will leave with the feeling that HongHong Kong Hotels Association; "Each of them will leave with the feeling that HongHong Kong Hotels Association; "Each of them will leave with the feeling that Hong

Kong has tried to extract their last dollars at the moment of departure. It doesKong has tried to extract their last dollars at the moment of departure. It doesKong has tried to extract their last dollars at the moment of departure. It doesKong has tried to extract their last dollars at the moment of departure. It does

not help us to promote Hong Kong as a tourist centre."not help us to promote Hong Kong as a tourist centre."not help us to promote Hong Kong as a tourist centre."not help us to promote Hong Kong as a tourist centre."

We want touristWe want touristWe want touristWe want tourists to come back for a further trip, and we want them to tell theirs to come back for a further trip, and we want them to tell theirs to come back for a further trip, and we want them to tell theirs to come back for a further trip, and we want them to tell their

friends to come here too. The fact that we have the highest airport departure taxfriends to come here too. The fact that we have the highest airport departure taxfriends to come here too. The fact that we have the highest airport departure taxfriends to come here too. The fact that we have the highest airport departure tax

in the world certainly does us no good at all in the eyes of tourists, leaving themin the world certainly does us no good at all in the eyes of tourists, leaving themin the world certainly does us no good at all in the eyes of tourists, leaving themin the world certainly does us no good at all in the eyes of tourists, leaving them

with a bitter taste in the mouth.with a bitter taste in the mouth.with a bitter taste in the mouth.with a bitter taste in the mouth.

The Financial Secretary has stated that sales tax is not currently under seriousThe Financial Secretary has stated that sales tax is not currently under seriousThe Financial Secretary has stated that sales tax is not currently under seriousThe Financial Secretary has stated that sales tax is not currently under serious

consideration but qualified it by "at a time of relatively high inflation".consideration but qualified it by "at a time of relatively high inflation".consideration but qualified it by "at a time of relatively high inflation".consideration but qualified it by "at a time of relatively high inflation".

Reassuring as it may be for this year, the tourism industry is adamantly opposed toReassuring as it may be for this year, the tourism industry is adamantly opposed toReassuring as it may be for this year, the tourism industry is adamantly opposed toReassuring as it may be for this year, the tourism industry is adamantly opposed to

sales tax under any level of inflation on the grounds that it will destroy Hong Kong'ssales tax under any level of inflation on the grounds that it will destroy Hong Kong'ssales tax under any level of inflation on the grounds that it will destroy Hong Kong'ssales tax under any level of inflation on the grounds that it will destroy Hong Kong's

third largest source of foreign earnings, not just because it is inflationary.third largest source of foreign earnings, not just because it is inflationary.third largest source of foreign earnings, not just because it is inflationary.third largest source of foreign earnings, not just because it is inflationary.

RatesRatesRatesRates

On this basis, members of the tourism industry are, given Hobson's choice overOn this basis, members of the tourism industry are, given Hobson's choice overOn this basis, members of the tourism industry are, given Hobson's choice overOn this basis, members of the tourism industry are, given Hobson's choice over

the Government needing some sort of stable, broad-based and predictable revenue,the Government needing some sort of stable, broad-based and predictable revenue,the Government needing some sort of stable, broad-based and predictable revenue,the Government needing some sort of stable, broad-based and predictable revenue,

prepared not to make too much fuss over the 0.5% increase in rates. However, thereprepared not to make too much fuss over the 0.5% increase in rates. However, thereprepared not to make too much fuss over the 0.5% increase in rates. However, thereprepared not to make too much fuss over the 0.5% increase in rates. However, there

are grave concern and protests in the lifting of the cap provided by the rates reliefare grave concern and protests in the lifting of the cap provided by the rates reliefare grave concern and protests in the lifting of the cap provided by the rates reliefare grave concern and protests in the lifting of the cap provided by the rates relief

scheme. Whether domestic or commercial, to have to swallow in excess of 25% increasescheme. Whether domestic or commercial, to have to swallow in excess of 25% increasescheme. Whether domestic or commercial, to have to swallow in excess of 25% increasescheme. Whether domestic or commercial, to have to swallow in excess of 25% increase

in payment of such a tax in one year is an excessive burden in anyone's book. Thatin payment of such a tax in one year is an excessive burden in anyone's book. Thatin payment of such a tax in one year is an excessive burden in anyone's book. Thatin payment of such a tax in one year is an excessive burden in anyone's book. That

is the view of the industry, which may not necessarily coincide entirely with theis the view of the industry, which may not necessarily coincide entirely with theis the view of the industry, which may not necessarily coincide entirely with theis the view of the industry, which may not necessarily coincide entirely with the

views of all Members, or even of the views of other Councillors of the Co-operativeviews of all Members, or even of the views of other Councillors of the Co-operativeviews of all Members, or even of the views of other Councillors of the Co-operativeviews of all Members, or even of the views of other Councillors of the Co-operative

Resources Centre. The Centre comprises members with a much wider perspective thanResources Centre. The Centre comprises members with a much wider perspective thanResources Centre. The Centre comprises members with a much wider perspective thanResources Centre. The Centre comprises members with a much wider perspective than

just one segment of the community, or just the constituency to which I belong, andjust one segment of the community, or just the constituency to which I belong, andjust one segment of the community, or just the constituency to which I belong, andjust one segment of the community, or just the constituency to which I belong, and

therefore is a broader representation of what is good for Hong Kong.therefore is a broader representation of what is good for Hong Kong.therefore is a broader representation of what is good for Hong Kong.therefore is a broader representation of what is good for Hong Kong.

Salaries taxSalaries taxSalaries taxSalaries tax

Whilst members of the tourism industry, the voters of which are mainly proprietorsWhilst members of the tourism industry, the voters of which are mainly proprietorsWhilst members of the tourism industry, the voters of which are mainly proprietorsWhilst members of the tourism industry, the voters of which are mainly proprietors

and managers, are less concerned about the increase this time in profits tax, theyand managers, are less concerned about the increase this time in profits tax, theyand managers, are less concerned about the increase this time in profits tax, theyand managers, are less concerned about the increase this time in profits tax, they

are in fact extremely concerned about the plight of their staff. A very largeare in fact extremely concerned about the plight of their staff. A very largeare in fact extremely concerned about the plight of their staff. A very largeare in fact extremely concerned about the plight of their staff. A very large

proportion of staff in this industry are salaries tax payers, many belong to theproportion of staff in this industry are salaries tax payers, many belong to theproportion of staff in this industry are salaries tax payers, many belong to theproportion of staff in this industry are salaries tax payers, many belong to the

so-called "sandwich class". Without these people, the industry cannot survive, asso-called "sandwich class". Without these people, the industry cannot survive, asso-called "sandwich class". Without these people, the industry cannot survive, asso-called "sandwich class". Without these people, the industry cannot survive, as

we are a "people industry". On their behalf, I wish to call upon the Government towe are a "people industry". On their behalf, I wish to call upon the Government towe are a "people industry". On their behalf, I wish to call upon the Government towe are a "people industry". On their behalf, I wish to call upon the Government to

be more generous in raising the single and married person's allowances to $50,000be more generous in raising the single and married person's allowances to $50,000be more generous in raising the single and married person's allowances to $50,000be more generous in raising the single and married person's allowances to $50,000

and $100,000 respectively, and to widen the tax band so that the burden is eased onand $100,000 respectively, and to widen the tax band so that the burden is eased onand $100,000 respectively, and to widen the tax band so that the burden is eased onand $100,000 respectively, and to widen the tax band so that the burden is eased on

those taxpayers who in the main are not fortunate to enjoy public housing and notthose taxpayers who in the main are not fortunate to enjoy public housing and notthose taxpayers who in the main are not fortunate to enjoy public housing and notthose taxpayers who in the main are not fortunate to enjoy public housing and not

well off enough to adequately provide for themselves in the area of housing.well off enough to adequately provide for themselves in the area of housing.well off enough to adequately provide for themselves in the area of housing.well off enough to adequately provide for themselves in the area of housing.

More resource allocationMore resource allocationMore resource allocationMore resource allocation

Mr Deputy President, proposing to spend more money is the prerogative of theMr Deputy President, proposing to spend more money is the prerogative of theMr Deputy President, proposing to spend more money is the prerogative of theMr Deputy President, proposing to spend more money is the prerogative of the

Administration in our executive-led style of government. However, there are threeAdministration in our executive-led style of government. However, there are threeAdministration in our executive-led style of government. However, there are threeAdministration in our executive-led style of government. However, there are three

areas where I would have rather seen more resources being provided for by theareas where I would have rather seen more resources being provided for by theareas where I would have rather seen more resources being provided for by theareas where I would have rather seen more resources being provided for by the

Government.Government.Government.Government.

EducationEducationEducationEducation

One is education in the primary and secondary sector. While it is commendableOne is education in the primary and secondary sector. While it is commendableOne is education in the primary and secondary sector. While it is commendableOne is education in the primary and secondary sector. While it is commendable

that places for tertiary education have increased, it is alarming that the standardsthat places for tertiary education have increased, it is alarming that the standardsthat places for tertiary education have increased, it is alarming that the standardsthat places for tertiary education have increased, it is alarming that the standards

in certain areas, especially English which is so important to maintaining Hong Kong'sin certain areas, especially English which is so important to maintaining Hong Kong'sin certain areas, especially English which is so important to maintaining Hong Kong'sin certain areas, especially English which is so important to maintaining Hong Kong's

international competitiveness, seem to have dropped. This is borne out by manyinternational competitiveness, seem to have dropped. This is borne out by manyinternational competitiveness, seem to have dropped. This is borne out by manyinternational competitiveness, seem to have dropped. This is borne out by many

employers who in recent years have had to drop the recruitment standards of schoolemployers who in recent years have had to drop the recruitment standards of schoolemployers who in recent years have had to drop the recruitment standards of schoolemployers who in recent years have had to drop the recruitment standards of school

leavers seeking jobs.leavers seeking jobs.leavers seeking jobs.leavers seeking jobs.

Recent measures to achieve cost savings have resulted in the need to consolidateRecent measures to achieve cost savings have resulted in the need to consolidateRecent measures to achieve cost savings have resulted in the need to consolidateRecent measures to achieve cost savings have resulted in the need to consolidate

classes amongst schools. Whilst statistically it seems a logical exercise, itclasses amongst schools. Whilst statistically it seems a logical exercise, itclasses amongst schools. Whilst statistically it seems a logical exercise, itclasses amongst schools. Whilst statistically it seems a logical exercise, it

creates undue stress on students and parents alike by dislocation. In the travelcreates undue stress on students and parents alike by dislocation. In the travelcreates undue stress on students and parents alike by dislocation. In the travelcreates undue stress on students and parents alike by dislocation. In the travel

industry, what consumers are most likely to have anxieties about on joining a groupindustry, what consumers are most likely to have anxieties about on joining a groupindustry, what consumers are most likely to have anxieties about on joining a groupindustry, what consumers are most likely to have anxieties about on joining a group

tour is to find that suddenly, before embarking on the journey, they have beentour is to find that suddenly, before embarking on the journey, they have beentour is to find that suddenly, before embarking on the journey, they have beentour is to find that suddenly, before embarking on the journey, they have been

"consolidated" or, as colloquially put in Cantonese, "sold off like a suckling pig"."consolidated" or, as colloquially put in Cantonese, "sold off like a suckling pig"."consolidated" or, as colloquially put in Cantonese, "sold off like a suckling pig"."consolidated" or, as colloquially put in Cantonese, "sold off like a suckling pig".

However righteous the decision, the end receiver often goes through unnecessaryHowever righteous the decision, the end receiver often goes through unnecessaryHowever righteous the decision, the end receiver often goes through unnecessaryHowever righteous the decision, the end receiver often goes through unnecessary

stress, and in the context of this exercise on our schools, both pupils and parentsstress, and in the context of this exercise on our schools, both pupils and parentsstress, and in the context of this exercise on our schools, both pupils and parentsstress, and in the context of this exercise on our schools, both pupils and parents

alike are experiencing this stress. Yesterday's announcement on the cancellationalike are experiencing this stress. Yesterday's announcement on the cancellationalike are experiencing this stress. Yesterday's announcement on the cancellationalike are experiencing this stress. Yesterday's announcement on the cancellation

of that un-necessary shuffling of students from one school to another which has causedof that un-necessary shuffling of students from one school to another which has causedof that un-necessary shuffling of students from one school to another which has causedof that un-necessary shuffling of students from one school to another which has caused

disruption in the middle of their school careers is to be welcomed.disruption in the middle of their school careers is to be welcomed.disruption in the middle of their school careers is to be welcomed.disruption in the middle of their school careers is to be welcomed.

Vocational trainingVocational trainingVocational trainingVocational training

We must ask ourselves whether coWe must ask ourselves whether coWe must ask ourselves whether coWe must ask ourselves whether cost cutting measures are economically effectivest cutting measures are economically effectivest cutting measures are economically effectivest cutting measures are economically effective

in the long run, or whether they are another form of wasting resources. For example,in the long run, or whether they are another form of wasting resources. For example,in the long run, or whether they are another form of wasting resources. For example,in the long run, or whether they are another form of wasting resources. For example,

training at the Vocational Training Council (VTC) has become even more important andtraining at the Vocational Training Council (VTC) has become even more important andtraining at the Vocational Training Council (VTC) has become even more important andtraining at the Vocational Training Council (VTC) has become even more important and

critical at a time of importation of labour and shortage of labour resources. I amcritical at a time of importation of labour and shortage of labour resources. I amcritical at a time of importation of labour and shortage of labour resources. I amcritical at a time of importation of labour and shortage of labour resources. I am

given to understand that in order to meet the requirement for controlling ofgiven to understand that in order to meet the requirement for controlling ofgiven to understand that in order to meet the requirement for controlling ofgiven to understand that in order to meet the requirement for controlling of

expenditure, the VTC is making ends meet at its new Pokfulam Training Centre byexpenditure, the VTC is making ends meet at its new Pokfulam Training Centre byexpenditure, the VTC is making ends meet at its new Pokfulam Training Centre byexpenditure, the VTC is making ends meet at its new Pokfulam Training Centre by

operating below capacity and thereby less staff. Is this really a saving, or is itoperating below capacity and thereby less staff. Is this really a saving, or is itoperating below capacity and thereby less staff. Is this really a saving, or is itoperating below capacity and thereby less staff. Is this really a saving, or is it

really costing us more in the long run by not being able to turn out as many neededreally costing us more in the long run by not being able to turn out as many neededreally costing us more in the long run by not being able to turn out as many neededreally costing us more in the long run by not being able to turn out as many needed

skilled workers for industry as quickly as we can?skilled workers for industry as quickly as we can?skilled workers for industry as quickly as we can?skilled workers for industry as quickly as we can?

Recreation and cultureRecreation and cultureRecreation and cultureRecreation and culture

I would like to make a plea not to make recreation and culture aI would like to make a plea not to make recreation and culture aI would like to make a plea not to make recreation and culture aI would like to make a plea not to make recreation and culture a victim of cost victim of cost victim of cost victim of cost

cutting and, in the process, destroy the momentum that has been built up over thecutting and, in the process, destroy the momentum that has been built up over thecutting and, in the process, destroy the momentum that has been built up over thecutting and, in the process, destroy the momentum that has been built up over the

last two decades in eradicating the image of a cultural desert from Hong Kong'slast two decades in eradicating the image of a cultural desert from Hong Kong'slast two decades in eradicating the image of a cultural desert from Hong Kong'slast two decades in eradicating the image of a cultural desert from Hong Kong's

reputation. Life is not all about hard work and making money. Recreation andreputation. Life is not all about hard work and making money. Recreation andreputation. Life is not all about hard work and making money. Recreation andreputation. Life is not all about hard work and making money. Recreation and

culture is a way for our population at large, in particular young people, to enjoyculture is a way for our population at large, in particular young people, to enjoyculture is a way for our population at large, in particular young people, to enjoyculture is a way for our population at large, in particular young people, to enjoy

the rightfully earned fruits of economic success. We must ensure this fruit isthe rightfully earned fruits of economic success. We must ensure this fruit isthe rightfully earned fruits of economic success. We must ensure this fruit isthe rightfully earned fruits of economic success. We must ensure this fruit is

nurtured and not withered on the vine due to lack of resources.nurtured and not withered on the vine due to lack of resources.nurtured and not withered on the vine due to lack of resources.nurtured and not withered on the vine due to lack of resources.

Mr Deputy President, I seeMr Deputy President, I seeMr Deputy President, I seeMr Deputy President, I see no point in preventing the Government from getting no point in preventing the Government from getting no point in preventing the Government from getting no point in preventing the Government from getting

on with its work which is for the overall good of Hong Kong. Therefore, based onon with its work which is for the overall good of Hong Kong. Therefore, based onon with its work which is for the overall good of Hong Kong. Therefore, based onon with its work which is for the overall good of Hong Kong. Therefore, based on

the views of my constituents, I support the Appropriation Bill. I however call uponthe views of my constituents, I support the Appropriation Bill. I however call uponthe views of my constituents, I support the Appropriation Bill. I however call uponthe views of my constituents, I support the Appropriation Bill. I however call upon

the Financial Secretary to heed the sentiments of this Council carefully and in histhe Financial Secretary to heed the sentiments of this Council carefully and in histhe Financial Secretary to heed the sentiments of this Council carefully and in histhe Financial Secretary to heed the sentiments of this Council carefully and in his

reply give a firm commitment to addressing Members' concerns.reply give a firm commitment to addressing Members' concerns.reply give a firm commitment to addressing Members' concerns.reply give a firm commitment to addressing Members' concerns.

MR WONG WAI-YIN (in Cantonese): Mr Deputy President, first of all, I regret that theMR WONG WAI-YIN (in Cantonese): Mr Deputy President, first of all, I regret that theMR WONG WAI-YIN (in Cantonese): Mr Deputy President, first of all, I regret that theMR WONG WAI-YIN (in Cantonese): Mr Deputy President, first of all, I regret that the

Governor Lord WILSON, as President of the Legislative Council, was unable to attendGovernor Lord WILSON, as President of the Legislative Council, was unable to attendGovernor Lord WILSON, as President of the Legislative Council, was unable to attendGovernor Lord WILSON, as President of the Legislative Council, was unable to attend

the debate on the Budget yesterday and today to listen directly to the views of thethe debate on the Budget yesterday and today to listen directly to the views of thethe debate on the Budget yesterday and today to listen directly to the views of thethe debate on the Budget yesterday and today to listen directly to the views of the

Members, and that the Members' motions for amendment were formally rejectedMembers, and that the Members' motions for amendment were formally rejectedMembers, and that the Members' motions for amendment were formally rejectedMembers, and that the Members' motions for amendment were formally rejected

yesterday.yesterday.yesterday.yesterday.

Just now, two of my Meeting Point friends in this Council, Just now, two of my Meeting Point friends in this Council, Just now, two of my Meeting Point friends in this Council, Just now, two of my Meeting Point friends in this Council, Mr Fred LI and Mr TIKMr Fred LI and Mr TIKMr Fred LI and Mr TIKMr Fred LI and Mr TIK

Chi-yuen, have expounded our overall views on the Budget for the coming year and ourChi-yuen, have expounded our overall views on the Budget for the coming year and ourChi-yuen, have expounded our overall views on the Budget for the coming year and ourChi-yuen, have expounded our overall views on the Budget for the coming year and our

views on medical services, education and welfare. I will focus my comments on twoviews on medical services, education and welfare. I will focus my comments on twoviews on medical services, education and welfare. I will focus my comments on twoviews on medical services, education and welfare. I will focus my comments on two

aspects: "the gap between the 'haves' and the 'have-nots'" and "rates."aspects: "the gap between the 'haves' and the 'have-nots'" and "rates."aspects: "the gap between the 'haves' and the 'have-nots'" and "rates."aspects: "the gap between the 'haves' and the 'have-nots'" and "rates."

Mr Deputy President, The Analects of Confucius says: "Inequity is more worryingMr Deputy President, The Analects of Confucius says: "Inequity is more worryingMr Deputy President, The Analects of Confucius says: "Inequity is more worryingMr Deputy President, The Analects of Confucius says: "Inequity is more worrying

than insufficiency and instability is worse than poverty." In Hong Kong, thethan insufficiency and instability is worse than poverty." In Hong Kong, thethan insufficiency and instability is worse than poverty." In Hong Kong, thethan insufficiency and instability is worse than poverty." In Hong Kong, the

narrowness of the tax base and the inequitable distribution of the tax burden havenarrowness of the tax base and the inequitable distribution of the tax burden havenarrowness of the tax base and the inequitable distribution of the tax burden havenarrowness of the tax base and the inequitable distribution of the tax burden have

been long-standing problems. Very regrettably, the Financial Secretary, Mrbeen long-standing problems. Very regrettably, the Financial Secretary, Mrbeen long-standing problems. Very regrettably, the Financial Secretary, Mrbeen long-standing problems. Very regrettably, the Financial Secretary, Mr

MacLEOD's maiden Budget does not help alleviating those problems. For the lower andMacLEOD's maiden Budget does not help alleviating those problems. For the lower andMacLEOD's maiden Budget does not help alleviating those problems. For the lower andMacLEOD's maiden Budget does not help alleviating those problems. For the lower and

middle income groups, the relative burden on them will continue to get heavier.middle income groups, the relative burden on them will continue to get heavier.middle income groups, the relative burden on them will continue to get heavier.middle income groups, the relative burden on them will continue to get heavier.

Meeting Point expresses strong dissatisfaction with this situation.Meeting Point expresses strong dissatisfaction with this situation.Meeting Point expresses strong dissatisfaction with this situation.Meeting Point expresses strong dissatisfaction with this situation.

The Financial Secretary proposes to raise the corporate profits tax rate by oneThe Financial Secretary proposes to raise the corporate profits tax rate by oneThe Financial Secretary proposes to raise the corporate profits tax rate by oneThe Financial Secretary proposes to raise the corporate profits tax rate by one

percentage point to 17.5% and to increase personal salaries tax allowance by 12% topercentage point to 17.5% and to increase personal salaries tax allowance by 12% topercentage point to 17.5% and to increase personal salaries tax allowance by 12% topercentage point to 17.5% and to increase personal salaries tax allowance by 12% to

$46,000. On the surface, this appears to be an equitable redistribution of the tax$46,000. On the surface, this appears to be an equitable redistribution of the tax$46,000. On the surface, this appears to be an equitable redistribution of the tax$46,000. On the surface, this appears to be an equitable redistribution of the tax

burden, but it is not so in fact. Ever since the early 1980's, profits tax has formedburden, but it is not so in fact. Ever since the early 1980's, profits tax has formedburden, but it is not so in fact. Ever since the early 1980's, profits tax has formedburden, but it is not so in fact. Ever since the early 1980's, profits tax has formed

a shrinking proportion of our total tax revenue, while in the case of salaries tax,a shrinking proportion of our total tax revenue, while in the case of salaries tax,a shrinking proportion of our total tax revenue, while in the case of salaries tax,a shrinking proportion of our total tax revenue, while in the case of salaries tax,

the situation has been just the opposite. In other words, businessmen's relativethe situation has been just the opposite. In other words, businessmen's relativethe situation has been just the opposite. In other words, businessmen's relativethe situation has been just the opposite. In other words, businessmen's relative

share of the tax burden has been on the decline though making more money, while thatshare of the tax burden has been on the decline though making more money, while thatshare of the tax burden has been on the decline though making more money, while thatshare of the tax burden has been on the decline though making more money, while that

for salary earners has increased.for salary earners has increased.for salary earners has increased.for salary earners has increased.

In the Budget, inadvertently or out of ignorance, the Financial Secretary notIn the Budget, inadvertently or out of ignorance, the Financial Secretary notIn the Budget, inadvertently or out of ignorance, the Financial Secretary notIn the Budget, inadvertently or out of ignorance, the Financial Secretary not

only fails to arrest such a trend but allows the situation to continue to worsen.only fails to arrest such a trend but allows the situation to continue to worsen.only fails to arrest such a trend but allows the situation to continue to worsen.only fails to arrest such a trend but allows the situation to continue to worsen.

Let us review the proportion of direct taxes in our total tax revenue. In 1980-Let us review the proportion of direct taxes in our total tax revenue. In 1980-Let us review the proportion of direct taxes in our total tax revenue. In 1980-Let us review the proportion of direct taxes in our total tax revenue. In 1980-

81, the percentages of corporate profits tax and salaries tax were respectively 69%81, the percentages of corporate profits tax and salaries tax were respectively 69%81, the percentages of corporate profits tax and salaries tax were respectively 69%81, the percentages of corporate profits tax and salaries tax were respectively 69%

and 16%. These became 61% and 32% in 1985-86; 56.2% and 36.1% in 1990-91; 55.1% andand 16%. These became 61% and 32% in 1985-86; 56.2% and 36.1% in 1990-91; 55.1% andand 16%. These became 61% and 32% in 1985-86; 56.2% and 36.1% in 1990-91; 55.1% andand 16%. These became 61% and 32% in 1985-86; 56.2% and 36.1% in 1990-91; 55.1% and

40.7% in 1991-92 (according to the revised Budget); and 53.1% and 43% in 1992-9340.7% in 1991-92 (according to the revised Budget); and 53.1% and 43% in 1992-9340.7% in 1991-92 (according to the revised Budget); and 53.1% and 43% in 1992-9340.7% in 1991-92 (according to the revised Budget); and 53.1% and 43% in 1992-93

(assuming the implementation of tax proposals). To put it simply, the Financial(assuming the implementation of tax proposals). To put it simply, the Financial(assuming the implementation of tax proposals). To put it simply, the Financial(assuming the implementation of tax proposals). To put it simply, the Financial

Secretary's proposal to increase profits tax and to raise the salaries tax allowanceSecretary's proposal to increase profits tax and to raise the salaries tax allowanceSecretary's proposal to increase profits tax and to raise the salaries tax allowanceSecretary's proposal to increase profits tax and to raise the salaries tax allowance

does not change the trend in which the relative tax burden on Hong Kong'sdoes not change the trend in which the relative tax burden on Hong Kong'sdoes not change the trend in which the relative tax burden on Hong Kong'sdoes not change the trend in which the relative tax burden on Hong Kong's

salary-earning class is becoming more and more unfair with regard to that onsalary-earning class is becoming more and more unfair with regard to that onsalary-earning class is becoming more and more unfair with regard to that onsalary-earning class is becoming more and more unfair with regard to that on

businessmen. This is unacceptable in Hong Kong, given the deteriorating unevenbusinessmen. This is unacceptable in Hong Kong, given the deteriorating unevenbusinessmen. This is unacceptable in Hong Kong, given the deteriorating unevenbusinessmen. This is unacceptable in Hong Kong, given the deteriorating uneven

income distribution.income distribution.income distribution.income distribution.

According to information from the Census and Statistics Department, in 1986, theAccording to information from the Census and Statistics Department, in 1986, theAccording to information from the Census and Statistics Department, in 1986, theAccording to information from the Census and Statistics Department, in 1986, the

incomes of the poorest 10% of Hong Kong families accounted for only 1.55% of Hongincomes of the poorest 10% of Hong Kong families accounted for only 1.55% of Hongincomes of the poorest 10% of Hong Kong families accounted for only 1.55% of Hongincomes of the poorest 10% of Hong Kong families accounted for only 1.55% of Hong

Kong's total earnings, while that of the richest 10% made up 35.7%. In other words,Kong's total earnings, while that of the richest 10% made up 35.7%. In other words,Kong's total earnings, while that of the richest 10% made up 35.7%. In other words,Kong's total earnings, while that of the richest 10% made up 35.7%. In other words,

the richest earned 23 times as much as the poorest. Now let us turn to the Ginithe richest earned 23 times as much as the poorest. Now let us turn to the Ginithe richest earned 23 times as much as the poorest. Now let us turn to the Ginithe richest earned 23 times as much as the poorest. Now let us turn to the Gini

Coefficient. It was 0.31 in 1971, 0.45 in 1981 and 0.48 in 1991. This shows thatCoefficient. It was 0.31 in 1971, 0.45 in 1981 and 0.48 in 1991. This shows thatCoefficient. It was 0.31 in 1971, 0.45 in 1981 and 0.48 in 1991. This shows thatCoefficient. It was 0.31 in 1971, 0.45 in 1981 and 0.48 in 1991. This shows that

the disparity of wealth is getting worse, precipitating a potential social crisis.the disparity of wealth is getting worse, precipitating a potential social crisis.the disparity of wealth is getting worse, precipitating a potential social crisis.the disparity of wealth is getting worse, precipitating a potential social crisis.

Therefore, Meeting Point thinks that we must deal with this problem squarely.Therefore, Meeting Point thinks that we must deal with this problem squarely.Therefore, Meeting Point thinks that we must deal with this problem squarely.Therefore, Meeting Point thinks that we must deal with this problem squarely.

The fact that the proportion of corporate profits tax in direct taxes and direct taxThe fact that the proportion of corporate profits tax in direct taxes and direct taxThe fact that the proportion of corporate profits tax in direct taxes and direct taxThe fact that the proportion of corporate profits tax in direct taxes and direct tax

revenue has been declining steadily reveals the Government's faulty tax policy asrevenue has been declining steadily reveals the Government's faulty tax policy asrevenue has been declining steadily reveals the Government's faulty tax policy asrevenue has been declining steadily reveals the Government's faulty tax policy as

well as serious problems of tax evasion and tax avoidance. It also demonstrates thatwell as serious problems of tax evasion and tax avoidance. It also demonstrates thatwell as serious problems of tax evasion and tax avoidance. It also demonstrates thatwell as serious problems of tax evasion and tax avoidance. It also demonstrates that

profits tax is hard to collect at a time when our economy is undergoing structuralprofits tax is hard to collect at a time when our economy is undergoing structuralprofits tax is hard to collect at a time when our economy is undergoing structuralprofits tax is hard to collect at a time when our economy is undergoing structural

transformation (for instance, the relocation of manufacturing facilities from Hongtransformation (for instance, the relocation of manufacturing facilities from Hongtransformation (for instance, the relocation of manufacturing facilities from Hongtransformation (for instance, the relocation of manufacturing facilities from Hong

Kong to South China), and that the salary-earning class has fallen victim to theKong to South China), and that the salary-earning class has fallen victim to theKong to South China), and that the salary-earning class has fallen victim to theKong to South China), and that the salary-earning class has fallen victim to the

system.system.system.system.

Hong Kong now has a working population of about 2.8 million. Among them, 1.45Hong Kong now has a working population of about 2.8 million. Among them, 1.45Hong Kong now has a working population of about 2.8 million. Among them, 1.45Hong Kong now has a working population of about 2.8 million. Among them, 1.45

million have been caught in the salaries tax net. Of these, 910 000 are salary-million have been caught in the salaries tax net. Of these, 910 000 are salary-million have been caught in the salaries tax net. Of these, 910 000 are salary-million have been caught in the salaries tax net. Of these, 910 000 are salary-

earners with an annual income of $120,000 or less.earners with an annual income of $120,000 or less.earners with an annual income of $120,000 or less.earners with an annual income of $120,000 or less.

Figures show that, in 1986, the median personal income was $2,573 and the personalFigures show that, in 1986, the median personal income was $2,573 and the personalFigures show that, in 1986, the median personal income was $2,573 and the personalFigures show that, in 1986, the median personal income was $2,573 and the personal

allowance was $29,000. In 1991, the median personal income was $5,170 per month,allowance was $29,000. In 1991, the median personal income was $5,170 per month,allowance was $29,000. In 1991, the median personal income was $5,170 per month,allowance was $29,000. In 1991, the median personal income was $5,170 per month,

up 100% from the 1986 level, but the personal allowance was only $41,000, up onlyup 100% from the 1986 level, but the personal allowance was only $41,000, up onlyup 100% from the 1986 level, but the personal allowance was only $41,000, up onlyup 100% from the 1986 level, but the personal allowance was only $41,000, up only

41%. Even if we take into account the proposed $46,000 in the present Budget, the41%. Even if we take into account the proposed $46,000 in the present Budget, the41%. Even if we take into account the proposed $46,000 in the present Budget, the41%. Even if we take into account the proposed $46,000 in the present Budget, the

increase will still be only 59%. In other words, the real income of the middle andincrease will still be only 59%. In other words, the real income of the middle andincrease will still be only 59%. In other words, the real income of the middle andincrease will still be only 59%. In other words, the real income of the middle and

lower income groups has generally declined. That is to say, they bore the brunt oflower income groups has generally declined. That is to say, they bore the brunt oflower income groups has generally declined. That is to say, they bore the brunt oflower income groups has generally declined. That is to say, they bore the brunt of

economic slow-down when the times were hard; nor have they been able to have theireconomic slow-down when the times were hard; nor have they been able to have theireconomic slow-down when the times were hard; nor have they been able to have theireconomic slow-down when the times were hard; nor have they been able to have their

fair share of the fruit of strong economic growth during the good times.fair share of the fruit of strong economic growth during the good times.fair share of the fruit of strong economic growth during the good times.fair share of the fruit of strong economic growth during the good times.

Again, where inflation rate is concerned, the agAgain, where inflation rate is concerned, the agAgain, where inflation rate is concerned, the agAgain, where inflation rate is concerned, the aggregate inflation rate was 44%gregate inflation rate was 44%gregate inflation rate was 44%gregate inflation rate was 44%

over the four years from 1987 to 1991. Over the same period, the personal allowance,over the four years from 1987 to 1991. Over the same period, the personal allowance,over the four years from 1987 to 1991. Over the same period, the personal allowance,over the four years from 1987 to 1991. Over the same period, the personal allowance,

however, rose by only 28%. As a result, more members of the middle and lower incomehowever, rose by only 28%. As a result, more members of the middle and lower incomehowever, rose by only 28%. As a result, more members of the middle and lower incomehowever, rose by only 28%. As a result, more members of the middle and lower income

groups were caught in the tax net. The gap between the rich and the poor became evengroups were caught in the tax net. The gap between the rich and the poor became evengroups were caught in the tax net. The gap between the rich and the poor became evengroups were caught in the tax net. The gap between the rich and the poor became even

wider. Hence, the 12% increase in the personal allowance this year, as proposed bywider. Hence, the 12% increase in the personal allowance this year, as proposed bywider. Hence, the 12% increase in the personal allowance this year, as proposed bywider. Hence, the 12% increase in the personal allowance this year, as proposed by

the Financial Secretary, can barely reduce the effects of last year's inflation, butthe Financial Secretary, can barely reduce the effects of last year's inflation, butthe Financial Secretary, can barely reduce the effects of last year's inflation, butthe Financial Secretary, can barely reduce the effects of last year's inflation, but

it still fails to mitigate those of the previous years.it still fails to mitigate those of the previous years.it still fails to mitigate those of the previous years.it still fails to mitigate those of the previous years.

With these in mind, Meeting Point is of the opinion that to lighten the tax burdenWith these in mind, Meeting Point is of the opinion that to lighten the tax burdenWith these in mind, Meeting Point is of the opinion that to lighten the tax burdenWith these in mind, Meeting Point is of the opinion that to lighten the tax burden

of the middle and lower income groups, personal allowance should be raised to $60,000of the middle and lower income groups, personal allowance should be raised to $60,000of the middle and lower income groups, personal allowance should be raised to $60,000of the middle and lower income groups, personal allowance should be raised to $60,000

or more. According to Meeting Point, if personal allowance is increased to $60,000,or more. According to Meeting Point, if personal allowance is increased to $60,000,or more. According to Meeting Point, if personal allowance is increased to $60,000,or more. According to Meeting Point, if personal allowance is increased to $60,000,

then (provided that the profits tax rate goes up by one percentage point) thethen (provided that the profits tax rate goes up by one percentage point) thethen (provided that the profits tax rate goes up by one percentage point) thethen (provided that the profits tax rate goes up by one percentage point) the

proportion of profits tax to salaries tax, in terms of direct taxes, will be 58% toproportion of profits tax to salaries tax, in terms of direct taxes, will be 58% toproportion of profits tax to salaries tax, in terms of direct taxes, will be 58% toproportion of profits tax to salaries tax, in terms of direct taxes, will be 58% to

40%. The proportion would be worse than what it was in the mid-1980s (61% to 32%40%. The proportion would be worse than what it was in the mid-1980s (61% to 32%40%. The proportion would be worse than what it was in the mid-1980s (61% to 32%40%. The proportion would be worse than what it was in the mid-1980s (61% to 32%

in 1985-86), but the growing proportion of salaries tax would, after all, be arrested.in 1985-86), but the growing proportion of salaries tax would, after all, be arrested.in 1985-86), but the growing proportion of salaries tax would, after all, be arrested.in 1985-86), but the growing proportion of salaries tax would, after all, be arrested.

Of course, the progressiveness of salaries tax should also be improved, so that theOf course, the progressiveness of salaries tax should also be improved, so that theOf course, the progressiveness of salaries tax should also be improved, so that theOf course, the progressiveness of salaries tax should also be improved, so that the

burden may be spread more reasonably.burden may be spread more reasonably.burden may be spread more reasonably.burden may be spread more reasonably.

Now, turning to the question about housing and rates. Now, turning to the question about housing and rates. Now, turning to the question about housing and rates. Now, turning to the question about housing and rates. In a poem composed afterIn a poem composed afterIn a poem composed afterIn a poem composed after

an autumn storm damaged his hut, DU Fu, the famed poet of Tang Dynasty, expressedan autumn storm damaged his hut, DU Fu, the famed poet of Tang Dynasty, expressedan autumn storm damaged his hut, DU Fu, the famed poet of Tang Dynasty, expressedan autumn storm damaged his hut, DU Fu, the famed poet of Tang Dynasty, expressed

his wish: "..... It would be nice to have thousands of spacious mansions/ To shelterhis wish: "..... It would be nice to have thousands of spacious mansions/ To shelterhis wish: "..... It would be nice to have thousands of spacious mansions/ To shelterhis wish: "..... It would be nice to have thousands of spacious mansions/ To shelter

the world's poor, who will smile with pleasure,/ And those mansions will stand asthe world's poor, who will smile with pleasure,/ And those mansions will stand asthe world's poor, who will smile with pleasure,/ And those mansions will stand asthe world's poor, who will smile with pleasure,/ And those mansions will stand as

firm as mountains in a rain storm." I believe that, in DU Fu's days, housing was veryfirm as mountains in a rain storm." I believe that, in DU Fu's days, housing was veryfirm as mountains in a rain storm." I believe that, in DU Fu's days, housing was veryfirm as mountains in a rain storm." I believe that, in DU Fu's days, housing was very

cheap and no rates were levied. Let us now go back to today's sandwich class.cheap and no rates were levied. Let us now go back to today's sandwich class.cheap and no rates were levied. Let us now go back to today's sandwich class.cheap and no rates were levied. Let us now go back to today's sandwich class.

Chafing under the yoke of heavy taxation, yet they are denied the benefit of publicChafing under the yoke of heavy taxation, yet they are denied the benefit of publicChafing under the yoke of heavy taxation, yet they are denied the benefit of publicChafing under the yoke of heavy taxation, yet they are denied the benefit of public

housing and home-ownership scheme. In fact, the heated property speculation hashousing and home-ownership scheme. In fact, the heated property speculation hashousing and home-ownership scheme. In fact, the heated property speculation hashousing and home-ownership scheme. In fact, the heated property speculation has

driven up the prices of flats to unreasonable levels that are beyond the middle anddriven up the prices of flats to unreasonable levels that are beyond the middle anddriven up the prices of flats to unreasonable levels that are beyond the middle anddriven up the prices of flats to unreasonable levels that are beyond the middle and

lower income groups' reach. According to figures released by the Rating andlower income groups' reach. According to figures released by the Rating andlower income groups' reach. According to figures released by the Rating andlower income groups' reach. According to figures released by the Rating and

Valuation Department, there are now as many as 33 000 vacant flats in Hong Kong, theValuation Department, there are now as many as 33 000 vacant flats in Hong Kong, theValuation Department, there are now as many as 33 000 vacant flats in Hong Kong, theValuation Department, there are now as many as 33 000 vacant flats in Hong Kong, the

highest vacancy rate for the past 10 years. Why has this happened? The reason ishighest vacancy rate for the past 10 years. Why has this happened? The reason ishighest vacancy rate for the past 10 years. Why has this happened? The reason ishighest vacancy rate for the past 10 years. Why has this happened? The reason is

quite simple. It is the runaway prices of flats that have dashed the dream ofquite simple. It is the runaway prices of flats that have dashed the dream ofquite simple. It is the runaway prices of flats that have dashed the dream ofquite simple. It is the runaway prices of flats that have dashed the dream of

potential home buyers, even though they are not poor. What is the use even if therepotential home buyers, even though they are not poor. What is the use even if therepotential home buyers, even though they are not poor. What is the use even if therepotential home buyers, even though they are not poor. What is the use even if there

are "thousands of spacious mansions"? Nor are those ordinary citizens who live inare "thousands of spacious mansions"? Nor are those ordinary citizens who live inare "thousands of spacious mansions"? Nor are those ordinary citizens who live inare "thousands of spacious mansions"? Nor are those ordinary citizens who live in

public housing flats having an easy time. They have to bear the burden of a doublingpublic housing flats having an easy time. They have to bear the burden of a doublingpublic housing flats having an easy time. They have to bear the burden of a doublingpublic housing flats having an easy time. They have to bear the burden of a doubling

of rents. In short, the increase in rates is without a doubt one more straw addedof rents. In short, the increase in rates is without a doubt one more straw addedof rents. In short, the increase in rates is without a doubt one more straw addedof rents. In short, the increase in rates is without a doubt one more straw added

to the back of the burdened camel, that is, the lower and middle-income groups.to the back of the burdened camel, that is, the lower and middle-income groups.to the back of the burdened camel, that is, the lower and middle-income groups.to the back of the burdened camel, that is, the lower and middle-income groups.

In his Budget, the Financial Secretary proposes to raise rates by half of oneIn his Budget, the Financial Secretary proposes to raise rates by half of oneIn his Budget, the Financial Secretary proposes to raise rates by half of oneIn his Budget, the Financial Secretary proposes to raise rates by half of one

percentage point and to abolish the 25% rates relief. Meeting Point strongly opposespercentage point and to abolish the 25% rates relief. Meeting Point strongly opposespercentage point and to abolish the 25% rates relief. Meeting Point strongly opposespercentage point and to abolish the 25% rates relief. Meeting Point strongly opposes

these proposals. The prices of flats have already risen to a totally unreasonablethese proposals. The prices of flats have already risen to a totally unreasonablethese proposals. The prices of flats have already risen to a totally unreasonablethese proposals. The prices of flats have already risen to a totally unreasonable

level. The rateable value of all flats in Hong Kong was revised as recently as lastlevel. The rateable value of all flats in Hong Kong was revised as recently as lastlevel. The rateable value of all flats in Hong Kong was revised as recently as lastlevel. The rateable value of all flats in Hong Kong was revised as recently as last

year, triggering a sharp rise in rates. In addition, we worry that the rateable valueyear, triggering a sharp rise in rates. In addition, we worry that the rateable valueyear, triggering a sharp rise in rates. In addition, we worry that the rateable valueyear, triggering a sharp rise in rates. In addition, we worry that the rateable value

of flats may again be revised in 1993-94. We believe that the public really cannotof flats may again be revised in 1993-94. We believe that the public really cannotof flats may again be revised in 1993-94. We believe that the public really cannotof flats may again be revised in 1993-94. We believe that the public really cannot

bear the burden. Also, the proposals, if given the green light, will fuel inflationbear the burden. Also, the proposals, if given the green light, will fuel inflationbear the burden. Also, the proposals, if given the green light, will fuel inflationbear the burden. Also, the proposals, if given the green light, will fuel inflation

and make people's life harder. When that happens, the Government will perhaps findand make people's life harder. When that happens, the Government will perhaps findand make people's life harder. When that happens, the Government will perhaps findand make people's life harder. When that happens, the Government will perhaps find

that it has lost a great deal because of its greed for a small gain and that it hasthat it has lost a great deal because of its greed for a small gain and that it hasthat it has lost a great deal because of its greed for a small gain and that it hasthat it has lost a great deal because of its greed for a small gain and that it has

lost more than it has hoped to gain!lost more than it has hoped to gain!lost more than it has hoped to gain!lost more than it has hoped to gain!

Hence, Meeting Point suggests that the Government should drop the proposals oHence, Meeting Point suggests that the Government should drop the proposals oHence, Meeting Point suggests that the Government should drop the proposals oHence, Meeting Point suggests that the Government should drop the proposals offff

raising rates by half of one percentage point. On the positive front, it shouldraising rates by half of one percentage point. On the positive front, it shouldraising rates by half of one percentage point. On the positive front, it shouldraising rates by half of one percentage point. On the positive front, it should

extend the rates concession, take strong action against property speculation andextend the rates concession, take strong action against property speculation andextend the rates concession, take strong action against property speculation andextend the rates concession, take strong action against property speculation and

adopt expeditious measures to enable the sandwich class to buy and own homes. Thisadopt expeditious measures to enable the sandwich class to buy and own homes. Thisadopt expeditious measures to enable the sandwich class to buy and own homes. Thisadopt expeditious measures to enable the sandwich class to buy and own homes. This

will ease the tax burden on the middle and lower income groups and allow them to enjoywill ease the tax burden on the middle and lower income groups and allow them to enjoywill ease the tax burden on the middle and lower income groups and allow them to enjoywill ease the tax burden on the middle and lower income groups and allow them to enjoy

a little bit of the fruit of Hong Kong's booming economy.a little bit of the fruit of Hong Kong's booming economy.a little bit of the fruit of Hong Kong's booming economy.a little bit of the fruit of Hong Kong's booming economy.

The new airport project has given us a lot of troubles before its advantages areThe new airport project has given us a lot of troubles before its advantages areThe new airport project has given us a lot of troubles before its advantages areThe new airport project has given us a lot of troubles before its advantages are

visible. First of all, all government departments are required to slash expenditurevisible. First of all, all government departments are required to slash expenditurevisible. First of all, all government departments are required to slash expenditurevisible. First of all, all government departments are required to slash expenditure

and carry out a retrenchment policy. This has affected our welfare, education,and carry out a retrenchment policy. This has affected our welfare, education,and carry out a retrenchment policy. This has affected our welfare, education,and carry out a retrenchment policy. This has affected our welfare, education,

medical services and the police and had an insuperable impact on the quality of life.medical services and the police and had an insuperable impact on the quality of life.medical services and the police and had an insuperable impact on the quality of life.medical services and the police and had an insuperable impact on the quality of life.

In fact, Meeting Point has proposed a 4.4.2 financing scheme. This means 40% of theIn fact, Meeting Point has proposed a 4.4.2 financing scheme. This means 40% of theIn fact, Meeting Point has proposed a 4.4.2 financing scheme. This means 40% of theIn fact, Meeting Point has proposed a 4.4.2 financing scheme. This means 40% of the

fund contributed by the Government reserve, 40% by foreign investment and 20% by thefund contributed by the Government reserve, 40% by foreign investment and 20% by thefund contributed by the Government reserve, 40% by foreign investment and 20% by thefund contributed by the Government reserve, 40% by foreign investment and 20% by the

floating of bonds. If this scheme is adopted, there will be ample funding for thefloating of bonds. If this scheme is adopted, there will be ample funding for thefloating of bonds. If this scheme is adopted, there will be ample funding for thefloating of bonds. If this scheme is adopted, there will be ample funding for the

new airport project without having to sacrifice the well-being of the people at all.new airport project without having to sacrifice the well-being of the people at all.new airport project without having to sacrifice the well-being of the people at all.new airport project without having to sacrifice the well-being of the people at all.

So we are opposed to the reduction of welfare spending, the increase in charges forSo we are opposed to the reduction of welfare spending, the increase in charges forSo we are opposed to the reduction of welfare spending, the increase in charges forSo we are opposed to the reduction of welfare spending, the increase in charges for

medical services. We are even more opposed to such irrational policies asmedical services. We are even more opposed to such irrational policies asmedical services. We are even more opposed to such irrational policies asmedical services. We are even more opposed to such irrational policies as

insufficient commitment to the provision of services for the handicapped,insufficient commitment to the provision of services for the handicapped,insufficient commitment to the provision of services for the handicapped,insufficient commitment to the provision of services for the handicapped,

retrogression in education and expanded importation of foreign workers.retrogression in education and expanded importation of foreign workers.retrogression in education and expanded importation of foreign workers.retrogression in education and expanded importation of foreign workers.

If the Government recklessly continues to cut spending in its insistence onIf the Government recklessly continues to cut spending in its insistence onIf the Government recklessly continues to cut spending in its insistence onIf the Government recklessly continues to cut spending in its insistence on

building a rose garden, even at the expense of the quality of the people's life, thenbuilding a rose garden, even at the expense of the quality of the people's life, thenbuilding a rose garden, even at the expense of the quality of the people's life, thenbuilding a rose garden, even at the expense of the quality of the people's life, then

I believe that a doggerel that I wrote for a Hong Kong Radio and Television programmeI believe that a doggerel that I wrote for a Hong Kong Radio and Television programmeI believe that a doggerel that I wrote for a Hong Kong Radio and Television programmeI believe that a doggerel that I wrote for a Hong Kong Radio and Television programme

will say precisely what is on the mind of the public. The doggerel goes like this:will say precisely what is on the mind of the public. The doggerel goes like this:will say precisely what is on the mind of the public. The doggerel goes like this:will say precisely what is on the mind of the public. The doggerel goes like this:

"His Lordship the Governor says the idea of building a rose garden sounds good./ His"His Lordship the Governor says the idea of building a rose garden sounds good./ His"His Lordship the Governor says the idea of building a rose garden sounds good./ His"His Lordship the Governor says the idea of building a rose garden sounds good./ His

Holiness the Financial Secretary begins extorting people's ingots of gold./ SpendingHoliness the Financial Secretary begins extorting people's ingots of gold./ SpendingHoliness the Financial Secretary begins extorting people's ingots of gold./ SpendingHoliness the Financial Secretary begins extorting people's ingots of gold./ Spending

is cut without regard for the quality of life./ There will be no welfare left by theis cut without regard for the quality of life./ There will be no welfare left by theis cut without regard for the quality of life./ There will be no welfare left by theis cut without regard for the quality of life./ There will be no welfare left by the

time I grow old."time I grow old."time I grow old."time I grow old."

We have a surplus of more than $10 billion last year. Nevertheless,We have a surplus of more than $10 billion last year. Nevertheless,We have a surplus of more than $10 billion last year. Nevertheless,We have a surplus of more than $10 billion last year. Nevertheless, the Financial the Financial the Financial the Financial

Secretary refused to lighten a bit the tax burden on the middle and lower income groups,Secretary refused to lighten a bit the tax burden on the middle and lower income groups,Secretary refused to lighten a bit the tax burden on the middle and lower income groups,Secretary refused to lighten a bit the tax burden on the middle and lower income groups,

amid strong dissatisfaction. But Mr MacLEOD eventually succumbed to the oppositionamid strong dissatisfaction. But Mr MacLEOD eventually succumbed to the oppositionamid strong dissatisfaction. But Mr MacLEOD eventually succumbed to the oppositionamid strong dissatisfaction. But Mr MacLEOD eventually succumbed to the opposition

from various sectors and pledged that he certainly will study measures for lighteningfrom various sectors and pledged that he certainly will study measures for lighteningfrom various sectors and pledged that he certainly will study measures for lighteningfrom various sectors and pledged that he certainly will study measures for lightening

the tax burden on the middle and lower income groups next year. Since Mr MacLEODthe tax burden on the middle and lower income groups next year. Since Mr MacLEODthe tax burden on the middle and lower income groups next year. Since Mr MacLEODthe tax burden on the middle and lower income groups next year. Since Mr MacLEOD

has acknowledged that the tax burden of the middle and lower income groups is heavyhas acknowledged that the tax burden of the middle and lower income groups is heavyhas acknowledged that the tax burden of the middle and lower income groups is heavyhas acknowledged that the tax burden of the middle and lower income groups is heavy

and must be lightened, then why must amelioration wait until next year instead ofand must be lightened, then why must amelioration wait until next year instead ofand must be lightened, then why must amelioration wait until next year instead ofand must be lightened, then why must amelioration wait until next year instead of

being effected immediately? Is this a matter of so-called prestige and credibilitybeing effected immediately? Is this a matter of so-called prestige and credibilitybeing effected immediately? Is this a matter of so-called prestige and credibilitybeing effected immediately? Is this a matter of so-called prestige and credibility

of the Government, or is the Financial Secretary trying to save his face? In fact,of the Government, or is the Financial Secretary trying to save his face? In fact,of the Government, or is the Financial Secretary trying to save his face? In fact,of the Government, or is the Financial Secretary trying to save his face? In fact,

we must realize that prestige and credibility cannot be achieved in this fashion,we must realize that prestige and credibility cannot be achieved in this fashion,we must realize that prestige and credibility cannot be achieved in this fashion,we must realize that prestige and credibility cannot be achieved in this fashion,

nor can a government win the trust and support of the people by remaining intransigentnor can a government win the trust and support of the people by remaining intransigentnor can a government win the trust and support of the people by remaining intransigentnor can a government win the trust and support of the people by remaining intransigent

and never admitting mistakes. On the contrary, a government must heed the views ofand never admitting mistakes. On the contrary, a government must heed the views ofand never admitting mistakes. On the contrary, a government must heed the views ofand never admitting mistakes. On the contrary, a government must heed the views of

the public and be receptive to good advice. Then, the people will support theirthe public and be receptive to good advice. Then, the people will support theirthe public and be receptive to good advice. Then, the people will support theirthe public and be receptive to good advice. Then, the people will support their

government. Take an example. Yesterday, in response to strong opposition from thegovernment. Take an example. Yesterday, in response to strong opposition from thegovernment. Take an example. Yesterday, in response to strong opposition from thegovernment. Take an example. Yesterday, in response to strong opposition from the

educational sector, the Government finally announced a change in the previouslyeducational sector, the Government finally announced a change in the previouslyeducational sector, the Government finally announced a change in the previouslyeducational sector, the Government finally announced a change in the previously

proposed measure of adding two places to each secondary and primary school class.proposed measure of adding two places to each secondary and primary school class.proposed measure of adding two places to each secondary and primary school class.proposed measure of adding two places to each secondary and primary school class.

However, we do not feel that the Government's prestige and credibility have beenHowever, we do not feel that the Government's prestige and credibility have beenHowever, we do not feel that the Government's prestige and credibility have beenHowever, we do not feel that the Government's prestige and credibility have been

damaged. The move is widely supported, though still failing to satify all. Mrdamaged. The move is widely supported, though still failing to satify all. Mrdamaged. The move is widely supported, though still failing to satify all. Mrdamaged. The move is widely supported, though still failing to satify all. Mr

MacLEOD, the Financial Secretary, please show courage and take the initiative toMacLEOD, the Financial Secretary, please show courage and take the initiative toMacLEOD, the Financial Secretary, please show courage and take the initiative toMacLEOD, the Financial Secretary, please show courage and take the initiative to

revise the Budget by raising the personal allowance to $60,000 or more, widening therevise the Budget by raising the personal allowance to $60,000 or more, widening therevise the Budget by raising the personal allowance to $60,000 or more, widening therevise the Budget by raising the personal allowance to $60,000 or more, widening the

tax band, dropping the proposed half of one percentage point increase in rates andtax band, dropping the proposed half of one percentage point increase in rates andtax band, dropping the proposed half of one percentage point increase in rates andtax band, dropping the proposed half of one percentage point increase in rates and

keeping the 25% rates relief, thus relieving the people from impoverishment. Ikeeping the 25% rates relief, thus relieving the people from impoverishment. Ikeeping the 25% rates relief, thus relieving the people from impoverishment. Ikeeping the 25% rates relief, thus relieving the people from impoverishment. I

believe that this will win you more support and admiration from the public. Of course,believe that this will win you more support and admiration from the public. Of course,believe that this will win you more support and admiration from the public. Of course,believe that this will win you more support and admiration from the public. Of course,

we hope that, in the end, we will not have to cast dissenting votes to reject thewe hope that, in the end, we will not have to cast dissenting votes to reject thewe hope that, in the end, we will not have to cast dissenting votes to reject thewe hope that, in the end, we will not have to cast dissenting votes to reject the

Budget. We hope that we will not have to resort to such a means. But, asBudget. We hope that we will not have to resort to such a means. But, asBudget. We hope that we will not have to resort to such a means. But, asBudget. We hope that we will not have to resort to such a means. But, as

representatives of the people, we must do so when the demand of the general publicrepresentatives of the people, we must do so when the demand of the general publicrepresentatives of the people, we must do so when the demand of the general publicrepresentatives of the people, we must do so when the demand of the general public

is justified! Mr Financial Secretary, when I am so earnestly asking for a revisionis justified! Mr Financial Secretary, when I am so earnestly asking for a revisionis justified! Mr Financial Secretary, when I am so earnestly asking for a revisionis justified! Mr Financial Secretary, when I am so earnestly asking for a revision

of the Budget, my purpose is not to court votes. My hope is that, during the secondof the Budget, my purpose is not to court votes. My hope is that, during the secondof the Budget, my purpose is not to court votes. My hope is that, during the secondof the Budget, my purpose is not to court votes. My hope is that, during the second

part of the transition period to 1997, the Government will stop opening itself topart of the transition period to 1997, the Government will stop opening itself topart of the transition period to 1997, the Government will stop opening itself topart of the transition period to 1997, the Government will stop opening itself to

public criticism for not making any further social commitment. Rebuilding thepublic criticism for not making any further social commitment. Rebuilding thepublic criticism for not making any further social commitment. Rebuilding thepublic criticism for not making any further social commitment. Rebuilding the

Government's prestige and credibility is of utmost urgency. Mr Financial Secretary,Government's prestige and credibility is of utmost urgency. Mr Financial Secretary,Government's prestige and credibility is of utmost urgency. Mr Financial Secretary,Government's prestige and credibility is of utmost urgency. Mr Financial Secretary,

please reconsider your proposals!please reconsider your proposals!please reconsider your proposals!please reconsider your proposals!

Of course, if the FiOf course, if the FiOf course, if the FiOf course, if the Financial Secretary adamantly refuses to revise the Budget,nancial Secretary adamantly refuses to revise the Budget,nancial Secretary adamantly refuses to revise the Budget,nancial Secretary adamantly refuses to revise the Budget,

here I have an unusual compromise solution. Financial Secretary, you have made outhere I have an unusual compromise solution. Financial Secretary, you have made outhere I have an unusual compromise solution. Financial Secretary, you have made outhere I have an unusual compromise solution. Financial Secretary, you have made out

a promissory note and promised to give top priority in the next fiscal year to thea promissory note and promised to give top priority in the next fiscal year to thea promissory note and promised to give top priority in the next fiscal year to thea promissory note and promised to give top priority in the next fiscal year to the

lightening of the tax burden on the middle and lower income groups. This being so,lightening of the tax burden on the middle and lower income groups. This being so,lightening of the tax burden on the middle and lower income groups. This being so,lightening of the tax burden on the middle and lower income groups. This being so,

I hope that you will accept post-dated cheques from the salary-earning taxpayers,I hope that you will accept post-dated cheques from the salary-earning taxpayers,I hope that you will accept post-dated cheques from the salary-earning taxpayers,I hope that you will accept post-dated cheques from the salary-earning taxpayers,

which can be cashed only on or after 1 April 1993.which can be cashed only on or after 1 April 1993.which can be cashed only on or after 1 April 1993.which can be cashed only on or after 1 April 1993.

Finally, Financial Secretary, you may remember that the authoritiesFinally, Financial Secretary, you may remember that the authoritiesFinally, Financial Secretary, you may remember that the authoritiesFinally, Financial Secretary, you may remember that the authorities have have have have

high-handedly rejected my Meeting Point ally in this Council, Mr Fred LI's motionhigh-handedly rejected my Meeting Point ally in this Council, Mr Fred LI's motionhigh-handedly rejected my Meeting Point ally in this Council, Mr Fred LI's motionhigh-handedly rejected my Meeting Point ally in this Council, Mr Fred LI's motion

for conducting a comprehensive review of Hong Kong's tax system. Today, Mr MacLEOD,for conducting a comprehensive review of Hong Kong's tax system. Today, Mr MacLEOD,for conducting a comprehensive review of Hong Kong's tax system. Today, Mr MacLEOD,for conducting a comprehensive review of Hong Kong's tax system. Today, Mr MacLEOD,

your maiden Budget has been subjected to a full measure of attacks from many sides,your maiden Budget has been subjected to a full measure of attacks from many sides,your maiden Budget has been subjected to a full measure of attacks from many sides,your maiden Budget has been subjected to a full measure of attacks from many sides,

with the result that it seems, as in the imagination of the frightened, that enemieswith the result that it seems, as in the imagination of the frightened, that enemieswith the result that it seems, as in the imagination of the frightened, that enemieswith the result that it seems, as in the imagination of the frightened, that enemies

are lurking in every shadow. This precisely exposes the problems of the tax system.are lurking in every shadow. This precisely exposes the problems of the tax system.are lurking in every shadow. This precisely exposes the problems of the tax system.are lurking in every shadow. This precisely exposes the problems of the tax system.

I am sure should you have known it would come to this, you would have acted differently.I am sure should you have known it would come to this, you would have acted differently.I am sure should you have known it would come to this, you would have acted differently.I am sure should you have known it would come to this, you would have acted differently.

So Meeting Point would like to reiterate that it is necessary to set up a broadlySo Meeting Point would like to reiterate that it is necessary to set up a broadlySo Meeting Point would like to reiterate that it is necessary to set up a broadlySo Meeting Point would like to reiterate that it is necessary to set up a broadly

based committee for carrying out a comprehensive review of our tax system. As thebased committee for carrying out a comprehensive review of our tax system. As thebased committee for carrying out a comprehensive review of our tax system. As thebased committee for carrying out a comprehensive review of our tax system. As the

saying goes, "As one realizes that one is right today, one also realizes that onesaying goes, "As one realizes that one is right today, one also realizes that onesaying goes, "As one realizes that one is right today, one also realizes that onesaying goes, "As one realizes that one is right today, one also realizes that one

was wrong yesterday." I hope that the Financial Secretary will gain experience andwas wrong yesterday." I hope that the Financial Secretary will gain experience andwas wrong yesterday." I hope that the Financial Secretary will gain experience andwas wrong yesterday." I hope that the Financial Secretary will gain experience and

learn the lesson and expeditiously launch a study of the special features of Honglearn the lesson and expeditiously launch a study of the special features of Honglearn the lesson and expeditiously launch a study of the special features of Honglearn the lesson and expeditiously launch a study of the special features of Hong

Kong's tax system and the philosophy behind it. In addition, reviews must be doneKong's tax system and the philosophy behind it. In addition, reviews must be doneKong's tax system and the philosophy behind it. In addition, reviews must be doneKong's tax system and the philosophy behind it. In addition, reviews must be done

on some specific problems in our tax system, including the proportion of differenton some specific problems in our tax system, including the proportion of differenton some specific problems in our tax system, including the proportion of differenton some specific problems in our tax system, including the proportion of different

kinds of taxes, the tax burdens and tax bases for different classes and the impactkinds of taxes, the tax burdens and tax bases for different classes and the impactkinds of taxes, the tax burdens and tax bases for different classes and the impactkinds of taxes, the tax burdens and tax bases for different classes and the impact

of the tax system on Hong Kong's economy.of the tax system on Hong Kong's economy.of the tax system on Hong Kong's economy.of the tax system on Hong Kong's economy.

Mr Deputy President, I hereby submit my speech. I hopeMr Deputy President, I hereby submit my speech. I hopeMr Deputy President, I hereby submit my speech. I hopeMr Deputy President, I hereby submit my speech. I hope that I will not have to that I will not have to that I will not have to that I will not have to

cast a dissenting vote on 1 April.cast a dissenting vote on 1 April.cast a dissenting vote on 1 April.cast a dissenting vote on 1 April.

ATTORNEY GENERAL: Mr Deputy President, I move that the debate on this motion be nowATTORNEY GENERAL: Mr Deputy President, I move that the debate on this motion be nowATTORNEY GENERAL: Mr Deputy President, I move that the debate on this motion be nowATTORNEY GENERAL: Mr Deputy President, I move that the debate on this motion be now

adjourned.adjourned.adjourned.adjourned.

Question on the adjournment proposed, put and agreed to.Question on the adjournment proposed, put and agreed to.Question on the adjournment proposed, put and agreed to.Question on the adjournment proposed, put and agreed to.

Adjournment and next sittingAdjournment and next sittingAdjournment and next sittingAdjournment and next sitting

DEPUTY PRESIDENT: In accordance with Standing Orders, I now adjourn the Council untilDEPUTY PRESIDENT: In accordance with Standing Orders, I now adjourn the Council untilDEPUTY PRESIDENT: In accordance with Standing Orders, I now adjourn the Council untilDEPUTY PRESIDENT: In accordance with Standing Orders, I now adjourn the Council until

2.30 pm on Wednesday 1 April.2.30 pm on Wednesday 1 April.2.30 pm on Wednesday 1 April.2.30 pm on Wednesday 1 April.

Adjourned accordingly at five minutes past Nine o'clock.Adjourned accordingly at five minutes past Nine o'clock.Adjourned accordingly at five minutes past Nine o'clock.Adjourned accordingly at five minutes past Nine o'clock.