The Chief Executive, Mr Tung Chee Hwa, met representatives of the Citizens Party and the Hong Kong Association for Democracy and People's Livelihood respectively today to listen to their views on a wide range of subjects, from budgetary and monetary issues to housing and land policies.

Mr Tung said that the Government fully understood the people's feelings towards the changing economic conditions as a result of the Asian financial turmoil.

"We will carefully take into account the views received from political parties, professional and community organisations in finalising the 1998-99 Budget proposals," he said.

"There are two major considerations when drawing up the Budget proposals," Mr Tung said. "First, we will continue to adopt a prudent fiscal policy which has served us well. The 1998-99 Budget is the first Budget after the reunification and it is vital that we would not give people a wrong impression that we have strayed from our prudent fiscal policy."

"Secondly, the Government will invest in a series of infrastructural development projects which will sustain and sharpen Hong Kong's competitiveness and stimulate our economy," he added.

While noting that the Citizens Party was supportive of the linked exchange rate system, Mr Tung reiterated that the Government was confident and able to maintain the linked rate system and saw no reason for changing it.

On the land and housing policy, Mr Tung pointed out that the Government was committed to ensuring that sufficient land was made available to meet the community's long-term demand for housing.

"The Government's key housing goals are to help all households to gain access to affordable housing and to encourage home ownership," he said.

Mr Tung reiterated that the Government did not wish to see wide fluctuations in property prices. "These are not conducive to home ownership or stability in our banking system," he said.

"The Hong Kong Monetary Authority had recently provided a $10 billion credit facility to the Hong Kong Mortgage Corporation, giving it the necessary financial backing to proceed with its mortgage purchase plan. This will provide banks with additional liquidity and make it easier for home buyers to obtain mortgages.

"We will also expedite the introduction of the Home Starters Loan Scheme," he said.

On education and the workforce, Mr Tung stressed that the Government would seek to provide an environment that would give residents equal and fair chances to compete and stand on their own.

"To achieve this, improving our education system is a vital factor among other efforts.

"The Government has been investing, and will continue to invest, heavily in education. In fact, one-fifth of the Government's recurrent expenditure goes to education. We will also seek to ensure that the education system will be responsive to changing needs," he said.

On environmental protection, Mr Tung said that the Government would ensure that consideration of how to sustain and enhance the environment was built into strategic planning and policy making.

"Improving the quality of the environment is as vital as economic growth to improving our quality of life.

"Hong Kong needs to provide a quality environment if we were to retain local talent and attract talent from overseas in order to sharpen our competitive edge and enable our businesses and economy to grow," he said.