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Following is the transcript of remarks by the Financial Secretary, Mr John C Tsang, at the press conference on the 2011-12 Budget at Central Government Offices New Annexe today (February 23):
I shall now repeat the main points in English.
In drafting the Budget this year, I have taken into consideration views expressed by the community as well as the long-term developmental needs of Hong Kong with due regard to the ever-changing international environment and our own socio-economic conditions. I would say that this is a "people-oriented" budget that is sustainable, and that has been worked out in a spirit of pragmatism.
The theme of this Budget is three-fold: combat inflation; stabilise the property market; and invest in the future.
The two main challenges confronting us in the year ahead are undoubtedly inflation and the risk of a property bubble.
Overall inflation in 2010 was 2.4%. Discounting the various one-off Government measures, the underlying rate of inflation for the year was 1.7%. This was relatively mild when measured against our economic growth of 6.8%. However, latest indications are that serious inflation is looming. We have therefore prepared a relief package worth about $20 billion to ease the pressure on our people.
In working out the package of relief measures, I was guided by three principles:
First, the measures must be in line with our economic cycle. The objective is to ease the burden on residents brought about by inflation. Therefore, measures that will further aggravate inflation will not be considered.
Second, the measures must be targeted so that they will benefit those most in need.
Third, the measures must be pragmatic and sustainable and must be within our means.
Another major theme of this Budget is stabilising the property market. I have pointed out in my last Budget that we would seek to ensure healthy and stable development of our property market by enhancing the transparency of property transactions; preventing excessive expansion of mortgage lending; curbing speculation and increasing supply. Our efforts are beginning to take effect. The emphasis of this Budget is on increasing land supply for domestic flats.
Total housing land available in the coming year will provide a total of 30,000 to
40,000 private residential flats, far exceeding the target of an annual average of 20,000 flats.
I believe the series of measures taken, in particular those implemented last November, has effectively curbed short-term speculation. However, I wish to reiterate that we are in an abnormal situation with plenty of liquidity and ultra-low interest rates. We must not lose sight of the risk to our social and economic stability with the formation of a property bubble. I am prepared to administer additional measures when required to ensure that the property market remains stable and healthy.
The third theme of this Budget is investing in the future. I have spent considerable time and resources on longer term measures. These measures include those that seek to promote economic development as well as those that seek to enhance the ability of the individual and to build up social capital.
I will not list out my specific proposals which make up a small part of the budget. Let me just point out that Government expenditure for 2011/12 will increase by 22% when compared with the current year. Compared with 2007/08, when I first became Financial Secretary, Government expenditure has increased by 58% while our GDP has grown by 15.8%. This is almost a four-fold increase in government spending during this period of my office. Also, recurrent expenditure, amounting to $240 billion this year, has increased by some 8% compared with the previous year.
In addition, I have earmarked some $70 billion in total for special one-off measures.
I hope the people of Hong Kong will agree that this is a Budget that caters to their needs. Thank you.
(to be continued)
(Please also refer to the Chinese portion of the transcript.)
Ends/Wednesday, February 23, 2011
Issued at HKT 16:52
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