SCMP Saturday, September 1, 2001
'Use reserves to spend our way out of trouble'
Political parties and an academic last night called on the Government to dig into its $400 billion reserves in an effort to spend its way out of the economic downturn.
However, most agreed that yesterday's revision of the annual growth forecast down from three to one per cent, and the release of a second-quarter growth figure of 0.5 per cent, were to be expected.
James Tien Pei-chun, leader of the Liberal Party, said people should brace themselves for further hard times because the downturn would continue throughout the year. "We hope the Government will come up with some policies to revive the economy. It should consider using part of the reserves to invest in local infrastructure and manpower development," he said.
Mr Tien also urged the Government to improve the business environment and attract investment.
The Democratic Party called for more spending to stimulate the economy and create jobs. Democrat Yeung Sum said the Government should not "blindly" rely on market forces. "The Government should play a bigger role and use its reserves to stimulate growth and create jobs. It should also cut tax to relieve people's burdens," he said.
Lee Cheuk-yan, of the Confederation of Trade Unions, feared workers' salaries would drop further and more people would be made redundant.
"It's time for the Government to come out and do something dramatic for the people. The Government should use the huge reserves, increase spending and save the people from their misery," he said.
Chan Kam-lam, of the Democratic Alliance for the Betterment of Hong Kong, said the Government should increase trade links between the SAR and the mainland, and give tax rebates to increase public spending.
Francis Lui Ting-ming, director of the Centre for Economic Development of the University of Science and Technology, said the Government should boost spending on education.
"While a rise in the US economy could help Hong Kong, we have a structural problem - a lack of professionals.
"Since we cannot compete with the mainland in terms of labour costs, we really have to change to a knowledge-based economy in order to attract investments."
Professor Lui said Hong Kong was in recession, which Financial Secretary Antony Leung Kam-chung has denied, and said it would continue unless the Government created more skilled workers.
"Furthermore, the Government should return money to the people by using its reserves, since the people know best how to spend their money, especially in difficult times," Professor Lui said.