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"I have pointed out that no fewer than 70 of the 160 Articles in the Basic Law deal with economic issues or are related to economic development," said Mr Tsang.

"The most important, Article 5, provides that our capitalist system and way of life shall remain unchanged for fifty years.

"We are committed to our role as an international business centre. We are committed to our policy of financial prudence. We will continue to enjoy full autonomy in economic affairs."

In regards to Salaries Tax, Mr Tsang said he had set out to substantially reduce the amount of tax people paid while keeping the number of taxpayers roughly the

same.

He said the proposed salaries tax concessions would cost more than $3 billion in 1997-98 and $20 billion up to 2000-01.

Mr Tsang said the forecast $32 billion Budget surplus for the 1997/98 financial year should be treated as an 'exceptional' item, for two reasons.

The first was because additional revenue would come as a result of accounting changes from July 1, 1997, relating to the treatment of income received from land transactions.

"Second, the surplus arises in the year in between funding the new airport and airport railway and investing in the Railway Development Strategy," he said,

Mr Tsang said Hong Kong was experiencing a time of great change.

"But it is also a time to hold fast to our values. To have faith and confidence in ourselves. To look to what we Hong Kong people can do," he said.

"We are the premier centre for international business in the region. We are looking forward to faster economic growth in 1997 than in 1996.

"Our sustained economic growth, our excellent law and order situation and our bright future prospects, mean that we can go on expanding our investment in our infrastructure, our support for business and our housing and social service programmes.

"Many in our community, and among our friends around the world, have a major question in their minds at this time.

"This Budget provides at least a part of the answer: Yes, the future does work."

End