CITY AND SUBURBAN
Here's how to budget for a free economy on the last prom of the knights
CHRISTOPHER FILDES
It was a good budget, I thought. I liked the cut of one-third in the duty on wine, and the new tax allowances, designed to help the 'sandwich' class, as it was expressively called. There was still room to spend more on health, education, housing and so on, with- out any threat to the public finances, which remain rock solid. The forecast is for another year of strong growth and high investment, but this is no thanks to any fiscal engineering in the budget, or dramatic tax reforms. Taxes are needed for paying the bills, but beyond that, the best thing the government could do for a growing economy is to get out of its way. The economy has, indeed, been official- ly rated as the freest in the world. . . . It is, as you may imagine, Hong Kong's, and will roll on from the old administration to the new with no call for a reformist July package. Top tax rate: 20 per cent. Basic tax rate: 15 per cent. Capital gains tax, value added tax: never heard of them. Government's slice of the economy: less than half ours. Standard of living: higher. Modest disclaimer from Sir Donald Tsang, honoured in Hong Kong's last prom of the knights: 'Market forces, not the annual budget, determine our economic performance.' Resemblance to any budget now on offer here: coincidental.
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