Open talk: Financial Secretary Henry Tang garners public views on the upcoming budget at a forum in Tsing Yi.

The rule of law is the cornerstone of Hong Kong's success, and the reversal of demolition plans for Hunghom Peninsula by its developers will not affect the city's status as the freest economy, Financial Secretary Henry Tang says.

He noted the Government respects contractual spirit, adding business must be conducted in a legal, just and fair manner.

Speaking at a public forum today, Mr Tang said he welcomed the developers' decision, which has taken into account people's concerns and demonstrated their respect of the community's wish.

He believed the move would not have an impact on Hong Kong's status as the freest economy, and stressed the rule of law is the key to Hong Kong's success.

Sales tax proposal needs in-depth discussions

On sales tax, Mr Tang said any new tax items will lead to heated debate in society.

He pledged the Government would allow comprehensive and in-depth discussion on the issue before coming to a decision. If the Government has decided to implement sales tax, it may be in place no sooner than 2009.

No plan to open casino on Lantau

When asked about the proposed setting up of a casino on Lantau, Mr Tang clarified this was just an idea from a political party. The Government has neither changed its stance on gambling nor had a plan to open a casino here, he added.

Mr Tang also reiterated the Government would strike a balance between economic developments and nature conservation when planning the developments on Lantau.

Turning to Government spending, Mr Tang said the public in general supported the proposed academic structural reform for senior secondary and higher education.

While the Government has committed to allocating more resources to education, Mr Tang expected spending in this area to surge when the current three-year undergraduate degree is changed to a four-year one.

No room for further civil service pay cuts

On civil service pay cuts, Mr Tang noted an appeal has been filed against the Court of Appeal's ruling in favour of two civil servants opposing salary cuts through legislation.

He hoped the Court of Final Appeal would have a ruling on the issue soon, adding there is no room for further civil service pay cuts.