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The Financial Secretary, Mr John C Tsang, has today (February 27) outlined three principles that will guide him in the formulation of the SARG's annual budget.
"First, the Budget should demonstrate the Government's commitment to our society; second, financial policies should be sustainable; and third, we should be pragmatic in decision-making," Mr Tsang explained while delivering his first budget at the Legislative Council.
On commitment to the society, Mr Tsang said: " It is the duty of the Government to provide the final safety net for those who cannot help themselves. Concern over the livelihood of low-income families has now become a consensus in our community."
In this regard, Mr Tsang proposed a one-off injection of $6,000 into the Mandatory Provident Fund accounts of those earning not more than $10,000 a month. Members of occupational retirement schemes that are defined contribution schemes will receive the same injection. This would cost $8.5 billion.
He proposed a range of measures to help the elderly and the disadvantaged.
These include an additional $1 billion to subsidise more new medicines for patients with financial difficulties; an additional one-month payment for CSSA and Disability Allowance recipients; and a $1 billion subsidy to help elderly people maintain their properties.
An additional $45 million will be provided over the next three years to help improve day foster care services and childcare facilities to meet the needs of parents.
Mr Tsang singled out healthcare as the greatest challenge to the stability of long-term public finances because of an ageing population.
"The Government is committed to increasing the share of health care expenditure to 17 per cent of its recurrent expenditure by 2012," he said.
"Since the Government cannot increase public health care expenditure indefinitely, we hope that supplementary financing arrangements can be implemented that ensure the availability of adequate resources in our health care system to cope with the community's demand in the future, and enable us to uphold the established policy of public health care that no one with financial difficulties will be denied proper health care," he added.
To assist the implementation of health care reform, he pledged to inject $ 50 billion from fiscal reserves to help meet this major challenge to future public finances.
On sustainability, Mr Tsang said he would strive to achieve fiscal balance over the next five years.
"I may introduce one-off measures which will increase government expenditure in the short term if there are needs in the community and our finances permit," he said.
Mr Tsang forecast that the measures announced in the Budget would lead to a deficit in the Operating Account for 2008-09.
But he predicted an operating surplus again from 2009-10, gradually building to $67.3 billion by 2012-13.
The Financial Secretary said a pragmatic approach would ensure that the resources were allocated where they were required most, and that every dollar would be well spent.
He added that he would continue to uphold the well-established principles of prudent management of public finances by keeping expenditure within the limits of revenues, maintaining a low and simple tax regime, and by following the direction of "Market Leads, Government Facilitates".
Mr Tsang said the benefits of many of his proposals would not be immediately felt, but that they would have a positive impact on Hong Kong in the medium and long run.
"I pledge that I will adhere to my three principles -- commitment to society, sustainability and pragmatism -- in management of public finances," he said.
"These will ensure a stable foundation of public service on which each citizen of Hong Kong can build. Each in our own way and each in our own field, but together with each other, we can build our bright future."
Ends/Wednesday, February 27, 2008
Issued at HKT 12:54
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