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| Balancing act: Financial Secretary Henry Tang said he has done his best to share wealth with the people. |
Financial Secretary Henry Tang says the Government has come up with a balanced budget in a prudent manner, with Hong Kong's long-term interests in mind.
He added he has done his best to share wealth with the people, and a further tax cut will lead to a budget deficit.
Speaking on RTHK's Financial Secretary's Budget Phone-in this morning, Mr Tang said there are still uncertainties in Hong Kong's economic outlook and people should not be too optimistic too soon.
Mr Tang said an operating account surplus of only $625 million in 2006-07 out of a $250 billion budget could basically be seen as 'balance'.
"Returning $2.7 billion to taxpayers is what can best be done, while a further tax cut of one percentage point will cost our hard-earned budget balance," he said.
'Middle-class' feelings understood
Mr Tang rejected critics's suggestion the budget is short-sighted, adding the middle class's disappointment in the proposed tax relief is understood.
But he pointed out it is contradictory to blame the Government for not offering more tax cuts on one hand, while criticising it for not spending enough on social welfare on the other.
Mr Tang reiterated the Government must strive to be prudent in fiscal planning and keep spending within revenue limits.
On rates charges, Mr Tang said he has decided to keep them unchanged after thorough consideration. He said present rateable values are just two-thirds of that of their peak levels, and there will be a rise of only $16 a month for residential premises and around $30 for commercial ones.
Care for the disadvantaged
Mr Tang dismissed criticism that the Government lacks concern for the underprivileged, saying the $36 billion in proposed social-welfare spending about equals the income from salaries tax.
On healthcare financing, Mr Tang said the aging population and rise in quality of medical service will bring greater pressure on the Government, which bears over 95% of the present cost.
He said the Government could not afford such a heavy subsidy in the long run, and alternative arrangements for healthcare financing are the appropriate way forward.
Infrastructure projects crucial
Turning to infrastructure projects, Mr Tang said they are crucial to the economy as they will create more jobs, enhance Hong Kong's competitiveness and improve people's livelihood.
He hopes the review on the West Kowloon Cultural District project will be completed soon so works can commence as early as possible, adding it will be a major attraction for tourists.
On green taxes and GST, Mr Tang said comprehensive consultations will be carried out in the coming year.
He thanked the community for helping the Government achieve a balanced budget, and asked for continuous support to further enhance the economy and create more jobs.
Budget preparation 'not political'
At the Legislative Council's Finance Committee meeting later this morning, Mr Tang said his budget preparation was not political and had nothing to do with the Chief Executive election next year.
In response to criticism on cutting operating expenditure for education, Mr Tang clarified the allocation in general will not be lower than that for last year, adding the injection into the education fund should also be counted.
On accusations of accumulation of fiscal reserves, he agreed the Government should not hold 'unlimited' savings, but said it is appropriate to keep the reserve at a level equivalent to 12 months' expenditure.
He added if the economic situation next year is better than expected, the Government will share more wealth with the people.
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