In considering healthcare financing options, the Government will provide a safety net to ensure everyone is covered, Secretary for Health, Welfare & Food Dr York Chow says.

Speaking at an Australian healthcare and insurance sector luncheon in Sydney today, Dr Chow said like Australia and most developed countries, Hong Kong is facing the problem of an ageing population. It will be a significant drain on its medical system, rendering it inadequate in answering to the needs of the community, he said.

"To address the problem, Hong Kong is embarking on a public consultation exercise in an attempt to map out some reform proposals on its future healthcare system," Dr Chow said.

Dr Chow is on a trip to learn about healthcare arrangements in other developed economies to come with a proposal best suited to Hong Kong.

Hong Kong's public hospitals are looking after 95% of inpatients, while 85% of the general outpatients are attended to by private practitioners. The Hong Kong Government is spending $30.2 billion a year on its healthcare system, accounting for 14% of recurrent public expenditure.

Unlike Australia, Hong Kong has a very shallow tax base which sees only 1.2 million of its seven million population contributing to tax revenue, with 300,000 of them contributing 80% of income tax.

Dr Chow said with such a low tax regime additional income must be sought to meet increasing costs.

Meanwhile, Dr Chow cautioned the gathering it is probable there could be an outbreak of avian influenza in the region.

He likened an outbreak to an international terrorist attack which would be better fought at the source rather than tackled after it crossed the border.

He said Hong Kong had put in place a preparedness plan for an influenza pandemic with particular reference to avian flu.

"As an integral part of the plan, we are also increasing the stockpile of antivirals for dealing with a possible influenza pandemic from 3.7 million capsules to more than 20 million in phases," Dr Chow said.