XN000022-1996-03-07 — Page 4

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Perhaps I will stop here. You have had a chance to examine the documentation and I hope any detailed question will be given a reasonable response by my expert colleagues here.

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Question (Cable TV in Cantonese): On tax concessions, of course a lot of people applaud that but for people earning a monthly salary of, say, $30,000-$40,000, people who are paying the standard tax rate, now they will feel that this time they do not enjoy concessions like those in the lower income group. At the same time they shoulder a greater and greater proportion of tax revenue to be paid to the Government. So have you considered the plight of the middle class and would you consider any measures to help them out in future?

FS (in Cantonese): Now for the standard tax rate, at the moment in Hong Kong it is not as high as in other places. At the moment it is only 15% so this time we have not proposed any changes to the standard tax rate. Tax concessions are offered to those who are in genuine need, say for a sandwich class earning a monthly salary of $30,000 as you mentioned. Now we have some examples. A family with two children, a dependent parent living together. If they have an annual income of $300,000, this time they would get tax concessions of over $3,000. In our example the family would have paid $4,600 under the present system but then as proposed they will be paying just $800, so a saving of over $3,000. This concession is not bad at all.

And for others who have to pay the standard tax rate, they would have to be earning something like $60,000 per month. It is true that they are not getting any benefit from my proposed tax concessions but I am in the same boat as they are. At the same time we must remind ourselves that they are people who are already very fortunate. For the salaried class, 2% of them pay standard tax rate and I am among one of them. But I think when we are earning such a handsome salary we should shoulder a bigger burden of the Government spending. So while I am sympathetic with them because my colleagues and I are all in the same shoe, I would say that we are playing our part in ensuring progress in society.

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Question (Commercial Radio in Cantonese): Now in the Budget you say that you have commissioned a company to consider the setting up of a mortgage corporation in Hong Kong. So in the course of study what technical difficulties may be faced and when the company is set up how would the public benefit from it?

FS (in Cantonese): Now I could answer that question briefly but since there are experts here perhaps I could defer it to the expert, Mr Hui.

SFS (in Cantonese): I wouldn't say I'm an expert. Tomorrow at the press conference you will really come to meet the experts. So today I don't intend to go into details because tomorrow the Hong Kong Monetary Authority, Mr Joseph Yam, would be with me to discuss this question with you.