Generating ideas: Encouraging more inward investment is a better way to increase revenues than raising taxes, Financial Secretary Henry Tang told the forum.

Financial Secretary Henry Tang stressed in a Budget forum today that human resources are one of Hong Kong's major assets and we must make the best use of it.

He also reiterated that the Government will try its best to balance its books, and efforts will be made to cut public expenditure. It will maximise the use of its resources in "a progressive, pragmatic and responsible manner".

Mr Tang was speaking at the "Meeting with the FS - Consultation on Budget 2004-05 Forum" organised by RTHK and sponsored by Cable TV at Lung Cheung Mall in Wong Tai Sin this morning.

Fairness, he said, will be his guiding principle when preparing the 2004-05 Budget.

On the allocation of resources to education, Mr Tang said we must add value to our human resources and be committed to cultivating our younger generation, to enhance their competitiveness worldwide.

Mr Tang said it is worth investing in education and the Government is committed to this.

Civil servants 'the backbone' of the Administration

Responding to the proposal to reduce civil servants' salaries, he pointed out there is a longstanding mechanism guarding civil-service pay. The more important issue will be to add value to the organisation.

He added that civil servants are the backbone of the Administration. We should not target this particular sector, raising its salary tax as some people have suggested.

On the suggestion of increasing revenue by raising taxes, he pointed out that among the 3.2 million working population in Hong Kong, only 1.2 million need to pay salary tax. Among the taxpayers, just 100,000 already pay 60% of the total salary tax. As for companies, the top 500 in the territory are paying 60% of the profits tax.

Inward investment better revenue generator

An increase in the tax rate would create an even greater burden on these taxpayers, Mr Tang noted.

The better way to generate more revenue from taxation would be to encourage more inward investment and cultivate a hard-working culture in the community, he said.

On the sustainable economic development of Hong Kong, he said the Lantau Development Task Force held its first meeting yesterday. It has agreed that the proposed logistics park should be developed as soon as possible to reinforce Hong Kong's status as the premier international logistics hub in Asia.

He appealed to members of the public to express their views on the 2004-05 Budget. To date, more than 600 submissions have been received through the Government's Budget website.