IT IS March 5, 1997. Financial Secretary Mr Hamish Macleod gets to his feet to deliver his last Budget speech in Legco. ''Comrades,'' he begins. ''As you know, this year's Budget has been worked out with the full co-operation of the future SAR Government. In considering our revenue and spending needs, I have taken into account the objectives of the incoming administrationin order to ensure a smooth economic transition.'' Fiction? Probably. For one thing, it's highly unlikely that Mr Macleod will deliver the 1997 Budget. He will be 56 by then and, age aside, should have been replaced by a local civil servant under Government policy. However, the scenario does raise an interesting question. Namely, how much co-operation will there be over the territory's economic policy. It was an issue Mr Macleod addressed for the first time last week. This year's Medium Range Forecast (MRF) takes the territory right to the brink of the handover and no further, prompting speculation that 1994 would see only a three year forecast, 1995 a two-year projection and so on. Nonsense, said Mr Macleod, the MRF would remain a four-year projection so next year's Budget would see a forecast that runs into 1998. The line from Lower Albert Road is that the autonomy guaranteed under the Joint Declaration means that the Financial Secretary retains complete independence, even in setting the 1997 Budget less than four months before the handover. London had no part toplay in Hongkong's economic forecasting and budgetary exercise, neither would Beijing. While that's technically correct, surely few people in Government believe it will be that simple. If the highly-charged political relations between Britain and China persist, Mr Macleod is sure to run into a storm the moment his forecasts run past the handover date. There was a foretaste this year with mainland criticism over high spending. Although the Joint Declaration lays down guidelines, such as a balanced Budget and a low-tax environment, there are bound to be different priorities between the present regime and the incoming SAR (Special Administrative Region) Government. There may still be a through train on economic issues but as 1997 nears the business community would like a Chinese co-driver to jump on board to work out a route that takes the territory well beyond the year 2000. For Mr Macleod it's a no-win situation. Even if he sought co-ordination with China, who does he turn to? The system of budgetary consultation that Mr Macleod introduced does allow some of the mainland's opinion to filter through but, as yet, there is no-one individual or organisation who speaks credibly on China's economic standpoint on Hongkong. In his statements last week, Mr Macleod was at pains to stress the difference between the Budget and forecasts. Forecasts did not commit the Chinese side; the Budget alone authorised spending. It was a careful choice of words that gives maximum leeway. Precisely until March 5, 1997. The great fiction then would be if the Financial Secretary of the day stepped up to deliver a Budget that had not been carefully worked out with SAR authorities who would implement it.
