- 2 -
You will see from my Budget speech that I am forecasting that the economy will grow by 5% in 1996-97, and I also expect inflation to come down to 7.5% in the year. But for the current year, that is 1995-96, I'm forecasting a deficit of $2.5 billion but we will then regain a balanced position in 1996-97, resulting in a forecast surplus of $1.6 billion.
We already published the Expenditure Estimates last Friday, and then you know the results but there are a few new items in my Budget speech which I announced this afternoon. These include first of all that in addition to the $300 million improvements in CSSA pledged by the Governor in his Policy Address, I propose to spend $200 million more on a variety of improvements, with some particular emphasis on the elderly. I also propose to spend $300 million on the Employees Retraining Board to increase its reserve capability so that it may then expand its programmes. There would be a $39 million a year to make an early start in implementing the Education Commission Report No. 6 on the Improvement of Language Ability in Hong Kong. Then I propose to inject $50 million each, one for the Services Support Fund and another to set up a Tourism Development Fund. Both of which will be very important in the development of our service industry.
On the revenue side I set out very generous salaries tax concessions at levels well above inflation and there was also a reduction which I have proposed to stamp duty for the purchase of lower/medium priced flats. There are some profits tax adjustments so as to improve our competitiveness for financial services.
So particularly on the promotion of service industry. I have set out in an addendum to my Budget speech what I consider to be important areas. An eight-point "Framework for Action" and there were 14 "Action Agendas". This is what we see as present situation in the various service industries and what we should aim at in the years ahead.
the
And for the manufacturing I have proposed to get started on site selection for the Science Park and further planning on the second industrial technology centre and the fourth industrial estate.
So that perhaps is a snapshot of what I have proposed this afternoon. I am quite happy to answer you questions both in English and Chinese.
Question (Apply Daily, Chan Wei Yi) (in Cantonese): Mr Secretary, just now you have told us a lot of measures on tax concessions, that's good news, but still some LegCo Members think you are being mingy, so you have such a huge reserve, why don't you do something to improve the services for the elderly?