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Following is the transcript (English portion) of the Financial Secretary, Mr Henry Tang, at a meet-the-media session after attending a radio phone-in programme this morning (February 8):

Reporter: Mr Tang, can you brief us on the financial situation? And there is quite a bit of concern that you'll actually raise the fees and charges and even let more people fall into the tax net given the economic improvements. What do you have to say to that?

Financial Secretary: First of all, as far as the fees and charges are concerned, this is not a new subject. In my Budget Speech in March of last year, I already said that in certain categories which would have no effect on people's livelihood and no direct effect on business would be taken forward and some of them have gone to Legislative Council Panels already and have received the consent of those Legislative Council Panels. I believe Hong Kong people are realistic and genuinely supportive of Government measures on those regards.

As far as the Government Budget is concerned, yes, our revenues on a number of areas for example land sale, stamp duty and etc. are actually better than our expectations. But I must alert everyone the reality is whatever number we end up showing, we still have $26 billion of debt and that is to be repaid. And this Budget is actually much harder to do than the last Budget because the expectations are different. You'll think: "You have sold a couple of pieces of land for very high amount and therefore your situation is drastically improved." This is a classic case of an over-reliant on non-recurrent income to pay for recurrent expenditure and this is not the right way to look at Government expenditure.

Reporter: How about civil service pay, the payout?

Financial Secretary: We are appealing to the Court of Final Appeal. The rule of law is one of the most important cornerstones of Hong Kong. We respect the outcome.

Reporter: Are you confident that you do not have to pay that amount of money?

Financial Secretary: We respect the outcome of the Court of Final Appeal.

(Please also refer to the Chinese portion.)

Ends/Tuesday, February 8, 2005

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