Following is the text of a TV/radio broadcast of the summary by the Financial Secretary, Mr Donald Tsang, on his Budget Speech delivered at the Provisional Legislative Council meeting this (Wednesday) afternoon:

In the Budget that I presented this afternoon I have done four things.

First, I have set out the importance of currency stability to Hong Kong. I have affirmed our commitment to maintain the currency board system and to maintain the Linked Exchange Rate at the existing level of parity. I have set out a wide ranging programme for improvements to the regulation and operation of our banking system, financial markets, and stock market. Hong Kong has stood up to the stormy weather in the Region's economy quite well, but we have learned some lessons that we need now to act on.

Second, I have set out guidelines for the handling of Hong Kong's strong fiscal reserves. These are designed to give assurance of our commitment to monetary stability, and assurance that we can maintain a strong level of public investment in the years ahead. Improved arrangements for management of the fiscal reserves should help to ensure a better contribution from these funds to public revenue.

Third, I have reconfirmed the Government's commitment to proceed with all the expenditure programmes announced by the Chief Executive last October.

Fourth, I have announced the largest package of tax reductions in Hong Kong's history.

Over the next four financial years, the effect of the tax reductions will be to leave nearly $100 billion more in the hands of those who have earned it.

Two thirds of the concessions will go directly to individuals, mostly through increases in Salaries Tax allowances and improvements to the marginal tax structure. I have introduced three major new deductions to help home buyers; to help those caring for elderly dependants; and to offset contributions to Provident Fund schemes. Allowances for disabled dependants, for dependent parents and grandparents and for single parent families have all been increased substantially.

One third of the tax reductions will benefit businesses directly, mostly through an extensive set of improvements to the Profits Tax regime, including a reduction in the standard rate of corporate Profits Tax to 16 per cent. We have also reached an understanding with tax authorities of the Central Government on the removal of double taxation on our businessmen operating in the Mainland. The dialogue with Central Government on improving tax arrangements continues.

While some of the measures, such as a one year reduction in Rates and a one year freeze on most Government fee increases, are intended to give short term relief, most of the changes have been designed with Hong Kong's long term competitiveness in mind. They reinforce our position as a haven of low taxes. The improved Profits Tax system creates stronger incentives for investments that will upgrade productivity. The Salaries Tax structure is now much fairer to middle income earners and helps families to play their part in supporting the elderly and people with disabilities.

Despite the financial troubles around us, Hong Kong can afford to make these substantial tax reductions and keep on course with all recurrent and capital spending plans. This will be a more difficult year, but growth in the economy will continue. This will sustain underlying public revenue. Since 1 July 1997, we have added to public revenue the new Government Rent and the full proceeds of land transactions. On top of that, we now receive substantially more in returns from the investment of the fiscal reserves. That all combines to give us the strength and flexibility to meet all our spending commitments, to cut taxes and to retain strong reserves against the threat of any further problems in the regional economy.

Today's Budget has sought to use our strengths to help ride out the present storms, but most of all, to use our flexibility to renew Hong Kong's strengths. Together we face a more difficult year: together, we can keep Hong Kong a good home, a place of opportunity and hope.