1998/99 Budget The 1998/99 Budget at a glance Total public expenditure $290,130 million (US$37.2 billion) Government expenditure $232,873 million (US$29.9 billion) Government revenue $205,122 million (US$26.3 billion) Consolidated deficit $36,500 million (US$4.7 billion) Fiscal reserves (at 31-3-99) $434 billion (US$55.6 billion) Reform of the Securities and Futures Markets A major reform of the securities and futures markets was announced in the Budget as part of ongoing efforts to maintain Hong Kong as the pre-eminent financial services centre in East Asia and to strengthen Hong Kong's markets in the wake of the Asian financial crisis. Reforms will include the demutualisation and merger of the stock and futures exchanges and a new regulatory framework to take into account such things as e-commerce, Internet trading and around-the-clock global securities market networks. Supervision of banks will be strengthened by developing a greater capability to identify and quantify the risks faced by individual banks and to assess the quality of their policies, procedures and controls in risk management; and developing a deeper debt market, both locally and on a regional basis, to provide more stable and flexible financing for businesses. Following, speculative attacks on the Hong Kong Dollar in August 1998, Hong Kong's monetary base was widened to reduce volatility in interest rates and to make the monetary system more stable if there are sudden and large inflows or outflows of capital. Civil Service Reform A major reform of the civil service was announced by the Financial Secretary in the 1999/2000 Budget. The reforms include: A review of employment terms and conditions, including starting pay, allowances and other benefits An overhaul of the appointment system to provide greater flexibility in the hiring and firing of staff and to consider the introduction of performance-related pay increases Strengthening the result-oriented and service-based culture Maximising room for private sector involvement in the delivery of public services An Enhanced Productivity Programme to deliver productivity gains of 5% of operating expenditure by 2002/03 (with gains of HK$800 million (US$103 million) expected in 1999/2000) A pay freeze for 1999 Greater use of contract staff, and a freeeze on hiring permanent staff Cyberport The Cyberport project, announced in the Budget, is part of the government's efforts to consolidate Hong Kong's position as the premier information and technology hub in Asia. The project is a joint development between the government and the company which proposed the concept, the Pacific Century Group. Cyberport will attract a cluster of companies involved in the development of advanced IT applications and services, as well as multi-media and content creation such as film production, 3-D graphics and animation. It will help Hong Kong develop a critical mass of professional IT talent in the shortest possible time. The HK$13 billion (US$1.6 billion) development on a 26-hectare site at Telegraph Bay, Pok Fu Lam, on the western shores of Hong Kong Island will be commissioned in phases starting from end-2001/early 2002. Cyberport will include an ultra-modern intelligent building complex, state-of-the-art broadband telecommunications and information 'backbone' and a wide range of shared facilities such as a media laboratory, a cyber library, an interface with universities and research institutes and a cyber mall. Up-market residential accommodation, gardens, lakes and a marina will be included to entice overseas talent to set up in Cyberport. Educational, recreational and entertainment facilities are planned to ensure residents and visitors get a 'hands-on' feel of what is happening in the digital domain. Since the announcement of the project, 10 leading international IT companies including Hewlett-Packard, IBM, Oracle and Yahoo! have signed up as anchor tenants and about 40 other companies have registered interest in becoming tenants. Last updated: June 1999