Help the needy help themselves: Creating more job opportunities is the key to alleviating poverty, Mr Tung tells lawmakers as LegCo President Rita Fan looks on.

More than 20 lawmakers questioned the Chief Executive in the Legislative Council today on a wide range of matters from his 2005 Policy Address.

When asked whether the administration was resolutely against collusion between business and the Government and committed to eliminating any transfer of benefits, Tung Chee Hwa replied: "Hong Kong is so successful today because we have a highly transparent government that is operating.

"Hong Kong is so successful because we abide by a free-market principle. Hong Kong is successful because we stick to principles, we stick to values in Hong Kong. If this government  or anybody indeed is going down the wrong track, then it would be very detrimental to Hong Kong. My colleagues and I would not allow this to happen."

He added there were 60 Legislative Council members "keeping us on our toes. We have a vibrant and robust media monitoring us. I don't see any collusion between Government and the business sector. I don't see any transfer of benefits. But I stress once again that should you have any evidence, if you come forward I would be prepared to take the matter up."

Priority: improving relationship between Executive, Legislature

He stressed to lawmakers that improving the relationship between the Executive Council  and the Legislature "is the general wish of the public, and this is also the wish of my Government colleagues".

Mr Tung said: "As far as the principal officials are concerned, whether they are working sufficiently diligently, whether they appear sufficiently at panels and meetings and so on, we try our best in order to improve the relationship between the Executive and the Legislature. I very much hope that LegCo members would work together to improve the relationship... That is the prerequisite to problems being solved.

"If we work towards a people-based governance, then issues can be solved that much more easily," he said.

Strong economy will eliminate poverty

Problems of povery and unemployment can be resolved with economic development, he stressed. "With good economic development, a lot of livelihood issues can be resolved. The unemployment situation can be alleviated. It is my priority and indeed the administration's priority to tackle the economy," he said.

The idea of focusing on cultural and creative industries was not his alone, he said, but based on a consensus of views. He also hoped to attract technology companies from Taiwan to help rebuild Hong Kong's manufacturing sector.

"I have discussed matters with many distinguished high-tech manufacturers in Taiwan. I talked to them about whether they would be coming to Hong Kong to take advantage of Hong Kong's situation. They hadn't seen the advantages in Hong Kong. You might ask whether we can give them some preferential treatment. We haven't come to that, given an opportunity we would try our very best. The opportunity simply hasn't arisen. We'll work hard on that," he said. 

Job creation through economic recovery the key

While the economy is in recovery mode, Mr Tung understands that not everyone in Hong Kong has yet to benefit. "Unemployment still stands at 6.7%. I'm fully, acutely aware of this. To resolve this problem, we eneed to do everything we possibly can to allow the economy to continue to grow. We have to do our level best to create opportunities.

"With economic development  comes job opportunities. I put particular emphasis on the efforts we've put in in regard to tourism in the policy address and also in terms of greening, in terms of environmental protection, in terms of decking of nullahs, in terms of municipal projects. We have to consider the desirability of these projects, but at the same time we are considering job opportunities. We do this to create more job opportunities to promote and push forward the economy. That's the fundamental solution to the problem."

When lawmakers asked about the potential of introducing a goods and services tax, Mr Tung was adamant that it would not be brought in during his term.

"The justification is, that when I look at other countries, I have not seen anything done in this regard at the beginning of economic recovery. If they had done so, those countries could not have a full economic rebound, even in five or six years. I'm actually talking about Japan. I would emphasise that at the beginning of our economic recovery, we should not go down that route."

He did suggest that the administration should be getting prepared for it as it will take years for it to be introduced when and if the decision is made to bring in a GST.

Gov't has positive attitude towards small-class teaching

Several LegCo members asked about small class teaching, an issue he raised in his Policy Address.

"Let me say once again, our attitude towards small class teaching is positive.We have a positive attitude. In order to give full play to the merits of small class teaching, we have to work on the teaching methods adopted by teachers and also what is being taught. Studies in the international community show that if you rush with small class teaching introduction, results will not be good. Failures have been seen," he said.

A pilot project in 37 schools over the next three years should help the administration determine the best way forward, he said. "So that with actual experience gained, we can explore the best way to introduce small class teaching if it is found to work."

'Education is simply too important for us'

He also said that there would be no more cuts in education spending. "At the worst of times, our overall education expenditure wasn't slashed. Even at the worst of times, we saw a similar budget for education last year and the year before last. Education is simply too important for us," he said.

In reply to a question about healthcare financing, Mr Tung admitted that while the Government has had several key reports, it could not achieve any consensus in the community regarding the way forward. "In the next two and a half years, whether we can build a consensus is another matter. However, as a first step, we have to do preparatory work," he said.

He added that he felt that prevention is the best health policy and the bureau secretary would agree.