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Danny Gittings

NOW a local has been appointed Chief Secretary, the next post to follow the same path before long should be that of Financial Secretary.

  For although present incumbent Hamish Macleod is generally acknowledged to be doing a good job, he is disqualified, by age and nationality, from serving beyond 1997.

  That means a local replacement must be in place well before then. Indeed, some in the administration believe the time for a move will come as early as next autumn, so the new Financial Secretary has time to find his feet before he loses his seat on the Legislative Council - a change that will take place at the time of the 1995 elections - and then has to deal with a new batch of politically-charged councillors.

  Mr Macleod shows no sign of wanting to leave; in fact, he has talked of presenting ''many more budgets''. But if he does decide to go, his apparent heir is in place and is seemingly capable of taking over.

  The flamboyant Donald Tsang Yam-kuen has only been Secretary for the Treasury for the past four months, but is being seen as Mr Macleod's natural successor.

  The bow-tied Secretary for the Treasury insists he is deeply embarrassed by being described as ambitious, noting this sounds distinctly uncomplimentary in Chinese.

  But, with his career so clearly on the fast-track, such protestations do nothing to stop widespread predictions that Mr Tsang is poised for a seat on the Executive Council.

  Certainly, he talks more enthusiastically about Governor Chris Patten than most civil servants, and made a point of personally endorsing the Governor's political reform proposals.

  ''I'm just a back-room boy but my heart is with him,'' said Mr Tsang. ''This Governor has regained leadership. I have not heard the words lame duck for a long time.''   But Mr Tsang may face problems in the sensitive area of Government spending, where he shows a dangerous inclination to slip into the sort of tough-talking that helped bring down his predecessor.

  As keeper of the public purse, the Secretary for the Treasury has, all too often in the past, felt it necessary to take a hard line on spending, and Mr Tsang was last week showing every sign of following that tradition.

  ''Guarding the public purse is not necessarily the most popular job in town,'' he said. ''I'm quite prepared to be unpopular with a minority of people on things which I firmly believe are in the public interest.''   Busy scaling down the size and powers of his own Finance Branch, as part of a reorganisation that means hiving officers off to elsewhere in government, Mr Tsang seems anxious to re-exert control through other methods.

  That means beefing up the powers of the supposedly ''omnipotent'' Star Chamber, chaired by the Chief Secretary. This already sits in judgment on how to divide up the annual spending cake, but will now also take on the task of keeping a beady eye on all branches of Government, to ensure they make savings in existing services.

  Such savings - which anyone outside the administration would call ''cuts'' - are supposedly needed, despite the soaring fiscal reserves, so new services can be provided without fuelling inflation.

  ''At the end of the day, difficult choices will have to be made,'' said Mr Tsang. ''Every sector will have to look around for their low-priority items.''   There will, he made clear, be no cut in overall Government expenditure, which will continue to grow at five per cent a year. But within that total, some programmes will have to be cut, in order to free more money to be spent elsewhere.

  Mr Tsang even hinted that any area which failed to show sufficient enthusiasm for the cost-cutting task would be punished by getting a smaller grant next year.

  It is, in short, a recipe for controversy. When the Government last tried something similar, two years ago, a storm of protest erupted everywhere from the police to social workers, and Secretary for Health and Welfare Elizabeth Wong Chien Chi-lien refused to implement cuts in her sector.

  Evidently aware of that, Mr Tsang had little time for critics this time round. ''They may be extremely vocal but that is a price we pay,'' he said. ''I hope the media will listen to a wider cross-section of people and not simply those who espouse services they benefit from, or those whose jobs depend on those services.''   Such talk horrifies legislators, and even other government officials. Indeed, it sounds all too reminiscent of what the previous Secretary for the Treasury, Yeung Kai-yin, used to say, which some believe is why he was elbowed from the centre of power - failing to sound sufficiently enthusiastic about spending public money.

  For, under Mr Patten, spending sprees have become almost routine, first in last year's policy address, then in March's Budget, with another one widely expected on October 6.

  Savings exercises - even if they free more money to be spent elsewhere - create the wrong impression.

    This means they are politically disastrous at a time when the Governor is trying hard to hang on to his falling popularity, and facing increasing pressure from Legco.

    And if Mr Tsang fails to recognise that, then his succession to Mr Macleod's post may not be quite so guaranteed after all.



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