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The following is the transcript (English portion) of the question and answer session given by the Financial Secretary, Mr Antony Leung, during his Budget press conference today (March 6, 2002):
Question: You said that you are confident the structural deficit would come down based on the many assumptions that you made in the Budget Report. Should these assumptions not materialize, are there particular taxes, such as recommendations that have been made by the committee (Advisory Committee on New Board Broad-based Taxes), that the government would favour should your assumptions not materialize in the near term?
Mr Leung: As we all know, forecasts are forecasts. The reality may not come exactly the way that we forecast the matter. Clearly, as the government, just like any other institutions, we have to adjust to the changing of times and if the situation has changed, then obviously we will change our tactics.
Question: Two points, really. The first is, you said you'd sort of felt that the pain of the difficulties now ought to be shared equally. But your Budget contains no major revenue proposals, but it does contain a major assumption of a pay cut for civil servants. Why is it, in your mind, that this represents equitable sharing of the pain? That is really the first question.
Mr Leung: Where in the Budget do you see the sharing or the equitable sharing of the pain?
Question : You suggested a few minutes ago in your introduction. I took you to say - you said that the pain should be shared. When you appealed to civil servants you said that you hoped that they would understand that these are hard times and everybody had to bear the burden.
Mr Leung: So that refers to the fact, at least as far as we observed, that the private sector has already done a lot in either cutting the staff size or cutting pay. So in that sense, I am appealing to the Civil Service to understand the situation that we are facing.
Question: Again, so the question is then how did you arrive at the assumption - and the assumption as precise as 4.75% - with no pay-trend survey in hand?
Mr Leung: Well, as I said, this is only a Budget assumption. An assumption is an assumption, it is not a recommendation nor a decision of salary cut. That has to be made by the government after the pay-trend survey is finished.
Question: We assume that the Secretary is not an arbitrary person and he would not pick a figure out of the air just randomly.
Mr Leung: Yes, but on the other hand I have said that that number is arrived at, or at least is picked, after considering the cumulative salary increases of the various bands of Civil Service since 1997.
Question: You did say earlier that you were not crying wolf. A number of legislators have suggested the contrary. So my question is: When you are called upon to be persuasive on this point, what do you consider to be the single most persuasive argument you have either in the Budget or in your vision to establish the fact, to prove the fact that you are not crying wolf?
Mr Leung: I don't think I need to prove anything because the report has already illustrated the picture in graphical as well as very clear terms in numbers, that if we do not change our lifestyle we will deplete our reserves in six years time. So I don't think we need to prove anything. I think the issue is not really focusing on whether we have cried wolf, the issue, I believe, should be focused on whether the proposals that I have suggested will resolve the problem.
Question: What is the most persuasive argument you have that they will solve the problem?
Mr Leung: Well, I believe that the legislators are also reasonable people. And if you think that my assumption is wrong, then I am quite confident that they will be convinced.
Question: I am a little confused about your point about non-intervention. You say the government needs a clear vision but this doesn't mean picking winners. Do I understand you correctly it means picking winning industries or is it more intervention?
Mr Leung: No, I have not said that I am going to pick winners or industries. But in case there are projects that will be beneficial to Hong Kong but that the private sector fails to respond to at that point of time, then the government would consider appropriate measures to promote it. I used the example, which I think is a fairly good one, the MTRC. The MTRC, at that point of time, if the government did not appropriately promote it, there would not be a subway in Hong Kong.
Question: So you will give help to individual areas but without going into some - even in companies?
Mr Leung: If it is beneficial to Hong Kong and that the private sector fails to respond to at that point of time.
(Please refer to the Chinese portions also.)
End/Wednesday, March 6, 2002
