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"On expenditure, we keep strict control over government spending. We do not allow it to grow, over time, faster than the trend growth rate of the economy. It is worth emphasising that we are focusing not on expenditure growth in one year, but in a number of years over time," he said.

"To achieve this medium term control on expenditure growth, we adopt a five year planning horizon. Each year, in considering our fiscal health and the Budget for the coming year, we look at our expenditure commitments and economic prospects in the current and upcoming four years.

On revenue, he said, Hong Kong maintains a low, simple and predictable taxation system.

"A low taxation system ensures resources are left as far as possible in the private sector. A simple taxation system ensures efficiency in tax collection by minimising the scope for tax avoidance. A predictable taxation system provides the necessary assurance to investors to invest in the medium and longer term," he said.

Mr Kwong noted that this successful two-pronged approach had raised sufficient revenue to meet Hong Kong's spending needs and built up a very healthy level of reserves.

"Applying these principles has generated the resources for a modern infrastructure, for better homes, for better health care, for better schools and social welfare," he added.

End

BA to open up committee meeting

The Broadcasting Authority will open up its Codes of Practice Committee meeting to the public this Saturday (January 25).

The Committee has been set up to review the codes of practice relating to programme, advertising and technical standards for broadcasting services and to make recommendations regarding amendments to the codes to the Broadcasting Authority.