Optimistic estimate: Chief Executive Donald Tsang says the Government may not need to make a huge tax adjustment in the coming years.

Chief Executive Donald Tsang says although he cannot rule out the possibility of introducing tax-increase measures during his term of office, it is unlikely that the Government would propose a huge and sharp tax rise in the near future.

Speaking on a joint radio talk show this morning, Mr Tsang said, according to the Financial Secretary's estimate on Hong Kong's future economic performance, the Government may not need to make a huge tax adjustment in the coming years.

Responding to comments that only people with high salaries would benefit from his proposal to cut the salaries tax standard rate, the Chief Executive said the move is only a start and the Financial Secretary may make further tax adjustments when drafting his Budget. He believes the further adjustment will ease the whole community's financial burden.

Practical help

When asked why he did not increase the Old Age Allowance, Mr Tsang said the allowance is only a way to show respect to the elderly. He believed the measures outlined in his Policy Address can better meet senior citizens' practical needs.

He said the proposed healthcare vouchers not only give medical subsidy to the elderly, but also encourage them to use private healthcare services. The move can help maintain a better balance between public and private healthcare services.

On the transport allowance for the disabled, he said the Government is now studying the possibility of increasing it. He hopes a decision can be made in two months.

Turning to education, Mr Tsang said the Government will not introduce small-class teaching in secondary schools at this stage because teachers have experienced great pressure brought by the recent academic reforms.

Potential market

When asked why Hong Kong needs to develop an Islamic bond market, the Chief Executive said many Islamic countries have accumulated huge amounts of capital and are seeking suitable platforms to manage their wealth. He believed Hong Kong could serve as a fund-management centre for the Islamic regions.

Although Singapore has started developing the market, Hong Kong enjoys more advantages because it has a large pool of financial experts and a strong capital-raising ability.