Good balance: Secretary for Financial Services & the Treasury Frederick Ma says the Government will continue to adopt prudent fiscal management.

The better-than-expected $55 billion fiscal surplus resulted from economic growth and the Government's success in containing its establishment and spending, Secretary for Financial Services & the Treasury Frederick Ma says.

Speaking on radio talk shows today, Mr Ma pointed out the surplus of the 2006-07 financial year is the second highest since 1997, adding this clearly showed our economy strongly recovered after the outbreak of SARS in 2003.

He stressed that the Government will continue to adopt prudent fiscal management, adding it has made a deliberate attempt to avoid compromising prudence by offering mostly one-off concessionary measures.

He said it is important to maintain a reasonable level of fiscal reserves to ensure that public services will not be affected during an economic downturn.

For the long-term benefit of Hong Kong, it is necessary to broaden our tax base, he said.

The Government's consultation on tax reform will end on March 31 and a report will be prepared for the next-term Government to consider, he said.