THE Government does not intend to consult China on medium-term spending and revenue plans even though elements of next year's Budget straddle 1997, Financial Secretary Mr Hamish Macleod said yesterday. Mr Macleod pledged that the financial blueprint for next year would include forecasts and reserve levels for the 1997-98 financial year, the first budget of the Special Administrative Region (SAR) Government. Despite Beijing's insistence that any major issues straddling 1997 required consultation with China, Mr Macleod said: ''There is no question of my pre-empting what will be in the first budget of the SAR Government and, as long as that is clear, then there's no need to consult them on the forecasts.'' ''I think the Legislative Council, and anyone else who's looking at the budget and the forecasts, is content if there continues to be a commitment to controlling expenditure. ''In our system this means that growth is in line with the economy and they can see that the relationship between expenditure and revenue is okay . . . ''As long as those things are okay, I expect people, whether they are north or south of the border, to be fairly relaxed.'' Mr Macleod told the South China Morning Post that the medium range forecast in his budget documents were for consideration only and did not commit the Chinese side to anything. ''They mustn't confuse forecasts with the budget,'' he said. ''The budget is the only thing which actually authorises the money and it's a year-by-year thing.'' However, China is understood to be nervous about this year's budget which contained projected high deficits for the remaining years of British rule, suspecting it is a move by Britain to milk Hongkong of its accumulated wealth. Mr Macleod said that on major projects, such as the airport, the Government had already consulted Beijing and added that situation would remain. He said he did not expect to significantly increase revenue by raising or creating new taxes in future budgets. ''That's a reassuring situation,'' he said. If for any reason some taxes do increase, Mr Macleod said that would give the Goverment scope to reduce others. ''Broadly speaking, we don't need to significantly increase our revenue by raising taxes,'' he said. Noting the Government's big-spending plan this year, Mr Macleod said he was worried that expectations would be raised to too high a level. Although the Appropriations Bill 1993 was passed by a vote of 33-1 in the Legislative Council on Wednesday, Mr Macleod said he was disappointed that the 13 legislators from the United Democrats of Hongkong (UDHK) had abstained from voting. ''I was surprised and disappointed that the UDHK abstained because the budget is generally regarded as a good one and contains the fruits of my dialogue with members [including the UDHK],'' he said. But he added he was encouraged by the support from other groups and pledged to resume dialogue with legislators on next year's budget. However, UDHK chairman Mr Martin Lee Chu-ming said he could not understand why Mr Macleod made the remarks. ''We acknowledged his improvements which is why we abstained from the voting,'' said Mr Lee. ''Last year, we voted against him,'' he added. The move had reflected the Liberals' feeling that Mr Macleod had not done enough, Mr Lee said. He said the UDHK agreed with the Government on the direction of the budget, but not on how far it should go. ''We agree we have an unexpected extra surplus of $14 billion,'' he said. ''We agree we need to dig into this sum and spend more. But why doesn't he dig deeper? ''Mr Macleod has acknowledged that, at the end of the day, there might not be any deficit.'' The Secretary for Economic Services, Mrs Anson Chan Fang On-sang, will be acting Financial Secretary for 10 days while Mr Macleod is on holiday. Mrs Chan, tipped as a candidate to be the first local Financial Secretary or possibly Chief Secretary, is the first local and woman officer to become acting financial chief. She succeeds Mr Barrie Wiggham as Secretary for the Civil Service after Easter.
