Transcript of remarks by FS at Budget press conference (with photos/video)

     Following is the transcript of remarks (English portion) by the Financial Secretary, Mr John C Tsang, at the press conference on the 2010-11 Budget at Central Government Offices New Annexe today (February 24):

Financial Secretary: I will now make my opening remarks in English. This morning at the Legislative Council, I presented the Budget for the coming financial year. Before taking questions, I would like to provide some background to my Budget deliberations.

    The theme of this year's Budget is three-fold - to work towards a sturdy recovery; to further develop the economy and to work together in fostering a caring society.

     Although the most difficult times brought about by the financial tsunami appear to be behind us, uncertainties still exist in the external environment.  So we must remain vigilant.  To stabilise our economy, it is important to maintain a healthy and stable property market.  I aim to achieve this by improving supply, enhancing transparency in the market and curbing speculation.

     In developing the economy, I have proposed to allocate more resources to implement the Chief Executive's policy objective.  This involves strengthening our four economic pillars and promoting the development of the six industries identified as priority areas.  This will help raise Hong Kong's competitiveness in the longer term.

     I have also proposed, among other things, to expand the Science Park and set up a Pilot Green Transport Fund.  This will support economic development and help diversify our economic structure.

     In addition to economic development, we also need to pay attention to social and livelihood issues in building a caring society.  I have devoted special attention to education and tackling poverty.  I have worked to promote social mobility and to use social capital wisely in supporting groups in need of assistance.  The plan to set up a non-profit-making organisation to facilitate Internet learning is a good example of initiatives in this respect.

     At the same time, we have continued to invest heavily in areas such as education, healthcare, job creation, social services, sport and cultural development.

     I realise that at this early stage of economic recovery, some residents may not be able to benefit immediately from the recovery process.  I have therefore proposed a $20 billion package that includes tax rebates, rates concessions, and public housing rental waivers, to help residents tide over the difficulty times.  Our long-term strategy is to develop the economy and invest in education.  In the short and medium term, relief measures will help alleviate the burden on those in need.

     In the concluding remarks of my Budget speech, I talked about wealth distribution and social mobility.  Hong Kong is a small and open economy subject to external constraints.  It is inappropriate for us to overhaul our low tax regime and tackle the unemployment and poverty problems through large-scale re-distribution of wealth.

      I believe that the most effective way to help people face economic fluctuations and to promote upward social mobility is by investing heavily in education, infrastructure and social welfare.

     I shall now take questions from the floor.

Reporter:  It seems you are saying that the only way to redistribute wealth would be through having massive welfare. Now, is it that there are no other alternatives you can identify to that, or is it you are philosophically indisposed towards the other alternatives or unwilling to take them out to employ them with just two years left in the administration?

Financial Secretary: No, what I believe is that for the longer term the way to improve people's livelihoods is to improve the economy. When the economy is improved different sectors would benefit by that. In the medium term the answer must lie in education and retraining so that people will be able to improve their capability and they can get a better job. But in the short-term, they may need to find have certain measures to help them tide over the difficulties they may face. What I believe is this would be an effective way for Hong Kong to deal with the poverty issue because we are a small and open economy. We have a simple and low tax regime and if we were to change that regime into something that is more encompassing, it would necessarily be a more welfare-related type of situation. In so doing it must involve a massive redistribution of the wealth at hand and I don't think that would be a solution favoured by the people of Hong Kong.

(Please also refer to the Chinese portion of the transcript.)

Ends/Wednesday, February 24, 2010
Issued at HKT 18:55