1 HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992 HONG

1 HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992 HONG KONG LEGISLATIVE COUNCIL -- 26 March 1992 1 OFFICIAL RECORD OF PROCEEDINGS Thursday, 26 March 1992 The Council met at half-past Two o'clock PRESENT THE DEPUTY PRESIDENT THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P. THE CHIEF SECRETARY THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P. THE FINANCIAL SECRETARY THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, C.B.E., J.P. THE ATTORNEY GENERAL THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., 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 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 HUI YIN-FAT, O.B.E., 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 PANG CHUN-HOI, M.B.E. THE HONOURABLE SZETO WAH THE HONOURABLE TAM YIU-CHUNG THE HONOURABLE ANDREW WONG WANG-FAT, 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 MARTIN GILBERT BARROW, O.B.E., J.P. THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P. THE HONOURABLE LAU WAH-SUM, O.B.E., J.P. DR THE HONOURABLE LEONG CHE-HUNG THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P. THE HONOURABLE MRS ELSIE TU, C.B.E. THE HONOURABLE PETER WONG HONG-YUEN, J.P. THE HONOURABLE ALBERT CHAN WAI-YIP PROF THE HONOURABLE EDWARD CHEN KWAN-YIU THE HONOURABLE VINCENT CHENG HOI-CHUEN THE HONOURABLE MOSES CHENG MO-CHI THE HONOURABLE CHEUNG MAN-KWONG THE HONOURABLE CHIM PUI-CHUNG REV THE HONOURABLE FUNG CHI-WOOD THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P. THE HONOURABLE MICHAEL HO MUN-KA DR THE HONOURABLE HUANG CHEN-YA THE HONOURABLE SIMON IP SIK-ON, J.P. DR THE HONOURABLE LAM KUI-CHUN DR THE HONOURABLE CONRAD LAM KUI-SHING THE HONOURABLE MISS EMILY LAU WAI-HING THE HONOURABLE LEE WING-TAT THE HONOURABLE ERIC LI KA-CHEUNG, J.P. THE HONOURABLE FRED LI WAH-MING PROF THE HONOURABLE FELICE LIEH MAK, O.B.E., J.P. THE HONOURALBE MAN SAI-CHEONG THE HONOURABLE STEVEN POON KWOK-LIM THE HONOURABLE HENRY TANG YING-YEN, J.P. THE HONOURABLE TIK CHI-YUEN THE HONOURABLE JAMES TO KUN-SUN DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P. DR THE HONOURABLE PHILIP WONG YU-HONG DR THE HONOURABLE YEUNG SUM THE HONOURABLE HOWARD YOUNG THE HONOURABLE ZACHARY WONG WAI-YIN ABSENT THE HONOURABLE NGAI SHIU-KIT, 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 MARVIN CHEUNG KIN-TUNG, J.P. THE HONOURABLE FREDERICK FUNG KIN-KEE THE HONOURABLE LAU CHIN-SHEK THE HONOURABLE GILBERT LEUNG KAM-HO THE HONOURABLE NG MING-YUM IN ATTENDANCE THE CLERK TO THE LEGISLATIVE COUNCIL MR LAW KAM-SANG Second Reading of Bill APPROPRIATION BILL 1992 Resumption of debate on Second Reading which was moved on 4 March 1992 DEPUTY PRESIDENT: Council will resume and continue with the debate on the Appropriation Bill 1992. MR 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 my respectable friend, Mr MacLEOD, the new Financial Secretary. I would like to take this 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 fifth Budgets in the many years to come. Mr Deputy President, keeping to my uusualsual style of being straightforward and outspoken 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 would also 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 an Executive Councillor and, therefore, a member of the executive authority, but rather because the Budget itself deserves support. I would like to commend it to the Honourable Members. I have been teaching public finance and public administration in the Chinese University 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 the philosophy 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 the previous 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 Kong will 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 Livelihood 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, a carefully drawn, reasonable and well-balanced statement. Besides, public opinion 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 survey company 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 44.52 points, which is below the "passing mark" of 50. I 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 an indisputable 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 both favourable and adverse effects on individual sectors. A Budget that pleases everybody 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, present a 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. Is it not a destructive approach which will promise to turn Hong Kong into a hell on earth? Mr 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 been Hong 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 the estimated 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. As 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. I 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 $25 billion 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 the estimated expenditure of the year. Should this be considered on the high side or the low side? What conseqconsequencesuences 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 or amending 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. (1) Should these Members succeed in reducing revenue from any one tax source, the Government will definitely need to offset its losses by slashing expenditure or raising 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 a situation 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 introduce 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 accept that 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 follow up in the coming 12 months with a view to pressing for their adoption by the next year's Budget. (2) The preparation of the estimated expeexpenditurenditure is based on policies that have already been formulated. The Appropriation Bill is passed to provide funds for implementing these agreed policies. If we propose to increase the allocation for any 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 the process of considering the Appropriation Bill, introducing other new policies or rearranging the order of priorities of the policies concerned.

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