- 1 -
Hong Kong must hold fast to its budgetary principles
The Financial Secretary, the Hon Donald Tsang, said today (Wednesday) that the Government will hold fast to its economic and budgetary principles in order to maintain steady economic growth and improve the livelihood of the community.
Speaking at the motion debate on "Freezing of fees and charges" at the Legislative Council today, Mr Tsang urged Legislative Councillors to reflect on the consequences of moves to freeze fees and charges and subsidise services from the public purse.
"If an operation does not pay its own way, then it ends up competing for resources with other public services.
"And the result is always the same: the standard of the utility service gradually declines as over the years it loses out in the battle for resources," Mr Tsang said.
He said that at a time the economy was facing challenges on many fronts and growing more slowly, Legislative Councillors' frustration was understandable.
"But we have to recognise that this is the low point of the economic cycle. That despite this, we still maintain a respectable growth of about five per cent, with inflation easing and unemployment stabilised," he said.
"The inflation rate is coming down because we have addressed, and continue to address, the bottlenecks that tend to exert upward pressure."
He also noted that the unemployment rate had stabilised at about 3.5 per cent.
"Unemployment is a complex subject, and a problem that the Government takes very seriously.
"Again, the correct response of our community must be to seek out the appropriate long term measures, not snatch at 'quick fix' palliatives that would only serve to make the situation worse." he said.
Mr Tsang said that at about $151 billion Hong Kong's reserves were at a very healthy level and its public finances were in good shape.
"This is not the right time to fritter away an advantage so hard won," he said.