Balanced development: Secretary for Constitutional Affairs Stephen Lam says Hong Kong should facilitate the development of a capitalist economy in pursuing constitutional development.

Secretary for Constitutional Affairs Stephen Lam says Hong Kong should facilitate the development of a capitalist economy in pursuing constitutional development, adding the public want to maintain the city's good finances while attaining the aim of universal suffrage.

The Strategic Development Commission's Committee on Governance & Political Development will meet on March 24 to discuss how Hong Kong can ensure that the Basic Law provisions concerning a capitalist economy can be implemented when attaining the ultimate aim of universal suffrage.

Mr Lam today said under the One Country, Two Systems formula, Hong Kong must, in the process of attaining the ultimate aim of universal suffrage, facilitate capitalist economy development and meet different sectors' interests.

Investment environment

Public views collected by the Constitutional Development Task Force during the consultation period for the 2007-08 electoral arrangements have also touched on this issue, he said.

There were views that as Hong Kong has a narrow tax base, if universal suffrage were implemented or functional constituencies were abolished hastily, Hong Kong might become a "welfare state". This might affect Hong Kong's investment and economic environment.

However, there are also views that in other economies practising democratic elections, although they provide a higher level of welfare protection, they are also capitalist societies.

"In pursuing the course of constitutional development and in the course of exploring the implementation of universal suffrage, we have to ensure that these important principles of fiscal balance, financial prudence, and a low tax rate, are observed in future as and when we attain the ultimate aim of universal suffrage," Mr Lam said.

No precondition

"I am not saying that the size and scope of any particular tax base is necessarily a precondition for the implementation of universal suffrage. All I am saying is that, in the course of pursuing constitutional development, we should have regard to the experience in overseas countries."

Mr Lam said the commission now focuses on discussions about the principles and concepts of universal suffrage. In the second half of the year, it will begin to discuss more specific details about systems for implementing universal suffrage for the Chief Executive and Legislative Council elections, and the question of a roadmap.