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ExCo member speaks on Budget

The following is issued on behalf of the Executive Council Secretariat:

     Following is a transcript of remarks by the Convenor of the Non-official Members of the Executive Council (ExCo), Mr Lam Woon-kwong, at a media session on the 2013-14 Budget in the Legislative Council Complex this afternoon (February 27):

Convenor of the ExCo Non-official Members: I think this is an appropriately progressive Budget. Due to the fairly substantial financial reserve this year, so the Financial Secretary has been able to fund all the agendas in the Chief Executive's Policy Address, and still has room to provide reliefs to the middle class and to the lower income group. Overall I think this is a reasonably balanced Budget. But in a longer term, due to the ageing population, we do need to look into the fundamental practice and principle of how best to use our reserves so as to be able to cater for the fairly substantial demand on the long-term resources of the SAR Government. So, I share the FS' proposal to set up a special taskforce to look into this particular review. Thank you.

Reporter: Singapore has recently announced... progressive tax scheme. Is it time for Hong Kong to start looking at GST, perhaps other methods, to widen the tax base?

Convenor of the ExCo Non-official Members: Hong Kong's tax is well-known for its simplicity and for its reasonableness.  I have seen previous attempts by the Government to try to expand the fairly narrow tax base.  But frankly speaking, with the amount of reserves that the Government is now holding, I don't think it will be realistic for the Government to raise this particular subject in the foreseeable future. In the longer term, we do need to consider having a reliable and sustainable tax base to support the inevitable long-term outlay that we need to spend on, for example, our elderly population and other groups that need our assistance.

Reporter: If that's the case, what's the point of this taskforce being set up under the Treasury Bureau...?

Convenor of the ExCo Non-official Members: As I understand, it is to look into the fundamental policy and practice of how best to set our financial principles in spending. It's not about tax. And I think this is very important because there is already a fairly wide debate in the community now on whether we should just spend away all of our reserves in one-go expenditure or whether we should indeed stock up our own savings so as to be able to sustain the inevitable long-term expenditure due to the ageing community. So let the debate be seriously considered by this particular taskforce, and let us come up with a reasonable balance in how best to spend our savings.

Reporter: How can we look at spending if we don't look at tax?

Convenor of the ExCo Non-official Members: Yes, in a longer term, I agree we do need to look into how best to raise a sustainable revenue base. But as of now any particular proposal to have new taxes is not going to be welcome by the people.

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

Ends/Wednesday, February 27, 2013
Issued at HKT 18:01


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