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The Financial Secretary, Mr Donald Tsang, said that cultivating talents and life-long learning as highlighted in the 1999 Policy Address were key factors to the continued economic development and goal of full employment.

Mr Tsang said the speed of economic growth of a region very often hinged on the education level of the people. On a personal level, the more knowledge and skill one acquires, the better his or her employment prospect.

He said in order to maintain the competitive edge of Hong Kong, we should enhance the quality of human resources through education and training.

As regards the other theme of the Policy Address, that is to improve our natural and urban environment, Mr Tsang said the environmental protection industry formed an important economic sector in many developed countries. It has brought about new job opportunities for people from all walks of life with different qualifications.

"It is clearly stated in the Policy Address that the Government will do its best to improve our legal and institutional frameworks in order to facilitate the development of the industry. We would seriously consider the proposals made by the Members to achieve a better coordination between environmental protection and industry policies," Mr Tsang said.

In response to the criticism that the Policy Address does not touch on economic and employment issues which people have been most concerned about, the Financial Secretary noted that the Chief Executive had already accorded top priorities to stimulating the economy and solving the unemployment problem as early as last year. He did not wait until October this year to map out policies to improve the economic plight faced by people.

As regards measures to facilitate economic development, Mr Tsang said the Chief Executive had pointed out in the previous Policy Address the need to expand the economic foundation, encourage the industrial and commercial sectors to make use of technology and innovations with a view to adding a new impetus to the development of Hong Kong.

"In this year's Budget, I further announced a series of measures and proposals to strengthen the financial sector, and to promote information technology and tourism. All these initiatives are the fruit of the Chief Executive's supervision," he said.

To relieve the burden of the public, the Government announced an across-the-board freeze of most Government fees last year. This was followed by a series of other measures to stimulate the economy and to alleviate the burden of the public and enterprises. Moreover, aside from tax and rates reduction proposed in the 1998-99 Budget, further measures were included in the 1999-2000 Budget to ease the burden of individual taxpayers, households and companies.

He said the series of economic relief measures had increased the financial burden of the Government by about $50 billion in the years 1998-2000. The Financial Secretary reiterated the SAR Government had to adhere strictly to the principle of prudence finance in order to ensure Hong Kong's continued economic prosperity. "We have to gradually adjust the growth rate of public expenditure within a period so that it will revert to a level which is commensurate with the overall economic growth," he said.

In order to improve the employment situation, Mr Tsang said the Chief Executive had instructed him to set up the Task Force on Employment in June last year to pool together representatives from the business, labour, academic and vocational sectors and the Government departments to put forward solutions.

"Since its establishment more than a year ago, the Task Force has put forward more than 30 initiatives. From the middle of last year to September, we estimate that Government's infrastructural and capital works projects have created about 90,000 jobs. Furthermore, from June last year to September, the Labour Department has successfully assisted some 60,000 people in finding jobs," he said.

On economic prospects, the Financial Secretary said that the Asian Financial Crisis which swept across Asia earlier had acted as a catalyst spurring adjustments in many aspects of Hong Kong's internal economy, as well as a new round of structural changes. Through these adjustments and changes, Hong Kong would emerge as a more competitive economy with firmer and stronger economic fundamentals.

On business cost, domestic asset prices lowered substantially during the past year. Wage level has also been softened significantly when compared to the double-digit increase before the financial turmoil. Judging from the recent improvement in export and tourist figures, the lowering cost has helped to improve the competitiveness of local goods and services in overseas markets.

But he pointed out that it would not be sufficient to rely on price and cost adjustments in maintaining the long term competitiveness of Hong Kong. The prospects of Hong Kong lies not in lowering cost and price, but with the pursuit of excellence, innovation and distinctiveness.

"We should continue to seek to strengthen the various sectors, in particular the two high value-added sectors of technology and finance, with a view to producing more goods and services which are innovative and of international standard," he said.

Regarding the question of when Hong Kong's economy will fully recover, Mr Tsang said the answer could not be provided by the Government alone. "The aspiration of individual enterprises and persons will directly or indirectly make an impact on the future economic prospect of Hong Kong. How the economy and employment market fare will depend on the wisdom, perseverance and determination of the whole community," he added.

End/Wednesday, October 27, 1999

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