XN000022-1996-02-27 — Page 2

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Cardinal public finances rule - live within our means: FS

The Financial Secretary, Mr Donald Tsang, reiterated that the cardinal rule of Hong Kong's public finances was to "live within our means".

Speaking at the Hong Kong Association of Banks' Half-Yearly Dinner this (Tuesday) evening, Mr Tsang said the Government had kept its spending under careful control.

"As a result we have not left behind major burdens for future generations. On the contrary, we are leaving to our successors a healthy reserve," he said.

Explaining the importance of fiscal balance to the economy, Mr Tsang said Hong Kong for a generation had been doing basically the right thing.

"We do not have government deficits as a rule and we have substantial reserves rather than debt.

said.

"Therefore there is no fiscal imbalance to harm our economic performance," he

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"Although we are forecasting a small deficit for the current financial year, the Hong Kong government has no outstanding debt.

"That is to say we do not have to focus on the choice between spending reductions and tax increases precisely because we have already kept our spending under careful control."

Mr Tsang said the Administration must be continually vigilant against proposals which would lock the Government into unfunded pension and health care programmes.

"That is why all of our proposals in these important areas are and must remain fully funded," he said.

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"We must also work hard to garner public support for the fiscal policies that we and I stress pursue because they are in the best long term interests of everyone everyone - in Hong Kong."

Mr Tsang said provided Hong Kong kept on with these policies - a requirement under the Basic Law - there was no question of any burden becoming unsustainable.