Following is the full text of the speech by the Financial Secretary, Mr Donald Tsang, at "Meeting with the Young People" organised by the Hong Kong Federation of Youth Groups today (February 13):
I am delighted to be here tonight to have the opportunity of meeting so many young people and to discuss with you some of the issues facing us. In a few years time, I am sure you will all be playing a significant role in determining our future direction.
That may seem a bit daunting at this stage in your life, but the opportunities before you today are almost light years away from the time when I was your age. I know it's not always a sound move to delve back into the past to try to read the future, but as a young man in the early 1960s we were living in a different world.
A limited TV service, Rediffusion, had just started. We had no computers, no faxes. Telephones were a luxury, and the Internet was still more than 30 years away. Indeed, as far as the information age was concerned, we were in the dark ages! As for the family situation, in many instances girls had to stay at home to help with the housework and the oldest son would invariably leave school early to go out and work to help supplement the family income.
Having to work at an early age, made me more aware of our family's budget. We always had to be conscious of how much mother could spend each month so it would not exceed the family income. For quite a long time my mother had to sew nylon bags to help out. And when I was studying for matriculation I had to teach some evening classes in order to earn money to pay for part of my tuition fees and books. Life in those days was pretty tough for most families. But I never felt it was particularly difficult and I was able to enjoy life. Never in my wildest dreams did I think that one day I would be in charge of billions of dollars in public finances.
Well, how things have changed since those almost 'innocent' days of the early 60s. Now we can switch currencies and buy global stocks with ease, communicate with people around the world within seconds, watch on screen events as they happen anywhere in the world, and carry with us a tiny device that can link us up to just about any information we want. And education is available to everyone. But does the availability of more material things make us wiser? Or does growing older necessarily mean we grow wiser?
I would like to think the answer to these questions is 'yes'. A recent survey of the Federation of Hong Kong Youth Groups showed that in some ways you are just as wise or even more so. For instance, over 80 per cent of our young people today have developed the habit of saving and another 68 per cent have been involved in some form of investment activity. You are building up your resources for the future. Saving for something you really want or saving for a rainy day. However, there is one contradiction here. While you are investing your money in different instruments, you are not overly aware, or concerned, of the risks involved.
Interestingly, the Federation's survey did not cover the other side of the equation - the spending habits of young people. However, from the media it is not uncommon to read reports of students and young people owning not one, but several credit cards, which has resulted in them falling into debt. There have even been reports of some students applying for additional cards to get cash to repay old debts.
Nevertheless, I can see how tempting it is today to have one or more cards. The many privileges or incentives, such as gifts or the waiving of fees that are offered, certainly appear very enticing. And with the card at the ready, you feel as though you can go out and 'shop till you drop' without having to hand over any money. But that's far from reality. At the end of the day, or more precisely at the end of each month, you have to pay up. I'm sure there are some who dread receiving their monthly statement. That demand to settle the bill. And, if you don't pay, the interest charges keep mounting up, making the burden even more difficult.
So you must think and choose wisely. Don't be drawn into something that you can't afford. That your budget won't allow.
By now, you may be asking yourself, why's Donald Tsang talking like this? Why is he lecturing us? Is he changing his profession? The answer is simple.
The kind of decisions you have to make in working out your budget are just the same as those which I, and my colleagues, have to make in managing Hong Kong's public finances. In looking after the budget, we also face the temptations of the house of credit cards. We face requests from all directions - legislators, bureaucrats, and action groups of one kind or another - for the government to be spending money on this or that project. Indeed, time and again we are criticised for acting in a "miserly manner" by holding onto our fiscal reserves. People say we can use the reserves and still remain wealthy. But once you start on the slippery spending slope, where will it end? The savings would be quickly swallowed up and the day of reckoning would eventually come. The simple fact is, we don't have an open purse.
We have built up the reserves over the years to help us through the unexpected crisis or emergency. We hope it won't happen, but it is something we must be prepared to meet as part of our prudent fiscal management. Just look back to 1998 when our currency was under attack by manipulators.
So, I ask you to pause and think - when the money has been spent, where will it come from in future? Living beyond our means is simply not sustainable. Our public finances would deteriorate and debt problems would begin to emerge. Hong Kong would become more vulnerable to outside forces. Investors might want to begin withdrawing their funds and moving elsewhere because they would not be happy with the way the economy was being managed. In the end, someone would have to pay for our profligacy. And, in all probability that burden would fall on you. The younger generation would be called on to pay today's debts in the future. Do you want that?
Do you want me to mortgage your future? I think not. Should I mortgage our prudent fiscal discipline simply to get an easier passage for the budget in LegCo? Again, I don't think so. Similarly, I ask you not to mortgage your principles and values. If you know that working hard is the best way to create wealth, you should also know that a sense of self-discipline and purpose are needed in equal measure to maintain that wealth. We need to save for unforeseen difficulties and invest in practical programmes that will generate further wealth for Hong Kong.
In doing so, we have to be sensitive to the needs of others. There are some in our community who still need our help. When we create wealth, we should look beyond our own self interests to ensure no one is deprived of the opportunity to learn, to develop themselves, to meet their own basic needs. We should work together to create wealth for all, and not have to redistribute it.
There is no doubt Hong Kong will face greater competition from global players in the years ahead. And while I ask you to be prudent in managing your finances, I also urge you to be fearless in taking up future challenges. One of those early challenges will be adapting to China's impending accession to the World Trade Organisation and leveraging the opportunities this will open up.
A whole new world is also opening up as we move further into the 21st century. Thirty years ago, few people predicted the amazing technological advances that have occurred in the past few years and the speed with which we have been able to exploit them to create new job opportunities. I have no doubt our future is closely linked to the information age and the exciting developments that are taking place in telecommunications, IT and the multi-media sectors.
Hong Kong's success has been built on what I call the pillars of wisdom - the rule of law, a level playing field, corruption-free government, the free flow of information and personal liberty. On top of this, we lay our legendary hard work and entrepreneur spirit, and while we have strengthened these over the years, we need to enhance our superstructure - our commercial activities, our services industries, our economic development to generate the opportunities for our future generations. We need to create a partnership with you to make this happen. Working together to build a dynamic future.
So, even with the difficulties and frustrations you might have experienced in the past two years, the outlook can be better and we can all do our best to make it that way. As the noted British economist, Peter Jay, recently argued, the four I's - information, incentive, investment and innovation - have been the secret of progress throughout history. Hong Kong is certainly following the path of the 'four I's' and with your help and diligence, our future will only get better.
Now, I think I have spoken far too long. I want to hear what you have to say and try to answer some of your questions.
Photo: The Financial Secretary, Mr Donald Tsang, attending a sharing session with over 900 local youths at a forum organised by the Hong Kong Federation of Youth Groups
End/Tuesday, February 13, 2001