Secretary for Financial Services & the Treasury Prof KC Chan says the Government will consult the financial sector on details of the government bond programme, such as the issue size and bond duration. He hopes the programme can be launched this year.

Speaking on a radio talk show today Prof Chan said the scheme will promote local bond market development, adding government bonds can set a benchmark for the local market attracting private enterprises to issue bonds in Hong Kong.

He hopes the investment fund industry will recognise the importance of government bonds and include these quality products in their investment portfolio.

On the Government's plan to sell its assets, Prof Chan said it is a long-term plan and the Government will make its decision after carefully and prudently assessing the economic situation.

In response to criticism the Government does not spend enough to help the public overcome the fiscal turmoil he said expenditure for 2009-10 will remain at a high level and forecast a deficit in the operating account for the coming four years.

When asked why the Government does not reduce profits tax to help small and medium enterprises he said the loan guarantee scheme and other measures to promote consumption are more effective ways to help companies tide over difficulties.