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Following is the text of a TV/radio broadcast of the summary by the Financial Secretary, Mr Donald Tsang, on his Budget Speech today (Wednesday):

This afternoon, I presented my 1999 Budget to the Legislative Council. With my Budget I want to do three important things -

- I want to provide further relief from the pain

brought about by the economic recession which

has affected our people and our businesses.

- I want to turn our economic setback in 1998 to

our advantage and set our public finances and

financial services on a secure footing in the

new millennium.

- And, most important, I don't want Hong Kong

people to lose faith in themselves and I must

help them out of the most difficult economic

times they have faced in forty years.

Let me tell you why I believe my Budget will achieve these goals.

First, we will take a number of immediate steps to make life easier for families and for companies doing business in Hong Kong.

- We will give a 10% refund of the 1997-98 final

tax bills for salaries tax, profits tax and

property tax.

- And we will do this quickly. More than 1.5

million people and businesses should receive a

refund. We will send $8 billion worth of

cheques out this month.

- We will reduce by half the rates bills to be

issued for the July to September quarter. This

will save ratepayers $1.8 billion dollars.

- And to help out business costs and to keep

prices down.

* We will extend the freeze on government fees

and charges for another six months.

* We will continue with the 30% reduction in

diesel duty brought in last June for another

year.

* And we will reduce a number of other business

costs.

All these concessions will cost more than $10 billion dollars over the next year or so. They should help us take the first steps on the road to economic recovery.

Despite the recession, we have kept up with our investment and expenditure programmes. In the coming year we are going to invest much more on education, particularly primary and secondary education. Welfare spending will grow by over 13% in real terms. Our proposed spending on social welfare, health and education programmes alone will take up about half of the total public expenditure of over $290 billion dollars in 1999/2000. It is the highest level of public spending ever proposed. And it will provide more jobs and help us regain economic growth.

Unfortunately they also mean that we will face substantial budget deficits continuously throughout much of the medium term. We can afford these deficits for a couple of years because of the reserves we have built up in the past.

But we cannot afford to keep running deficits indefinitely. Or our reserves would soon disappear.

We need to raise additional government revenue. This is a painful decision but one which we should not avoid.

I have proposed to the Legislative Council a small number of carefully selected tax and other increases. I have tried to ensure that these increases will affect only those who can afford them.

Their introduction is vital if we are to restore our public finances to health in the 21st century. They will help us to bring our public finances back to the black in 2001.

But the one thing, above all else, which will help the whole community is to strengthen our economic foundations and to build on these further.

This afternoon I discussed a wide range of measures to do just that.

- We will introduce fundamental reforms to our

securities and futures markets.

- We will strengthen the supervision of our banks

and help develop a broader debt market.

These steps will keep us in the premier league of international financial centres.

I am particularly determined to make the public sector of Hong Kong more efficient and cost effective. The public servants, together with the rest of the community, stand ready to chip in their efforts in restoring our economy. We are in the same boat.

- We will reform the civil service and the way in

which we deliver public services to contain

costs, to make our services more efficient and

to provide better value for taxpayers' money.

In this regard I have frozen civil service pay

for 1999.

- We will privatise part of the MTRC to reinforce

its competitiveness.

I also announced two exciting new developments. They will bring hope, excitement and thousands of new jobs to our community.

- The development of a $13 billion dollars

Cyberport to help Hong Kong become an

international information services hub.

- And we are finalising plans for the construction

of a Walt Disney theme park on North Lantau, to

breathe new life into the tourism industry.

The Government is taking determined steps to secure our future.

But I need your help. Only with the cooperation and the combined efforts of all Hong Kong people can we press onward with these new strengths. This is what we have done in the past, I am sure that together we can do it again. This time not only for Hong Kong, but also for our country.

END/Wednesday, March 3, 1999

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