XN000022-1997-03-12 — Page 26

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We have attempted to accommodate views from LegCo as well as views from the community from all quarters. We have made response to those views in our Budget and if there are areas where members of the community are not specifically or totally satisfied, we hope that next year we will do better. And if this year the Budget is accepted by LegCo, then in July the transition will be very smooth politically; and economically it will be so and I have confidence in that particular point.

Reporter (in Chinese): Mr Tsang, concerning tax relief for first time home-buyers you believe that they should not be supported. However, in Hong Kong, most of the members of the public cannot afford their homes. However, at the same time you are trying to reduce stamp duty. Aren't you encouraging speculation?

Mr Donald Tsang (in Chinese): On the one hand you say that we are not helping them to buy their first homes. On the other hand you are saying that stamp duty is being reduced so that speculation is encouraged. So what is your point? So I think your question shows that there are various pressures from different quarters of the community and whatever we do we have to be very careful.

We know that we have to help those who are buying their first homes and for those who are buying homes that are priced under $4 million we believe they should be helped and that is why we are reducing stamp duty. And also the number of first time home-buyers is increasing over the years and we believe that there is no need for tax relief and so we have to strike a balance and we have to be fair here. When I say fair I mean the assistance should be given to those who are really in need of it.

Reporter (in Chinese): A follow up please. If you reduce the cost of buying property, wouldn't it encourage speculation?

Mr Donald Tsang (in Chinese): We are talking about reduction of stamp duty for flats under $4 million and most of those flats are HOS flats, in other words government- assisted flats, and in those areas speculation is not really very rampant.

Reporter (in English): You have a total surplus of $47 billion: $15.1 billion in 96/97 and $32 billion in 97/98, and then a fiscal reserve of like $360 billion but at the same time you don't want to dip into the surplus. Why don't you dip into the reserve to spend for the railway development strategy? I mean is the rationale for sitting on this huge or extremely huge surplus?

Mr Donald Tsang (in English): First of all, when you talk about surpluses, I am giving you the year-end surpluses. You just cannot add on, say, I made $15 billion this year surplus and then $32 billion the following year, therefore you add the two together.