SCMP Saturday, October 6, 2001

Deficit hampers effort to stir growth, warns Tung


A growing Budget deficit gave the Government little room to manoeuvre in trying to help revive the economy, Chief Executive Tung Chee-hwa said yesterday.
Mr Tung's remarks were seen as the latest attempt by the Government to lower public expectations ahead of his Policy Address on Wednesday.
Speaking after a visit to two small and medium-sized enterprises, Mr Tung said Hong Kong was facing a difficult time as the external economy deteriorated. The terrorism attacks on the United States had further weakened the Hong Kong economy.
"Our Budget deficit this year will increase a lot," he said, adding the room for the Government to take action was "not that much".
Results for the five months of the financial year to August 31 showed the deficit standing at $49 billion. Expenditure from April to August was $96 billion while revenue was $47 billion.
But Mr Tung said the Government would try its best to help those in need. "We have collected a lot of opinions and are studying the matter thoroughly. We will have a detailed announcement in next Wednesday's Policy Address," he said.
Joined by the chairman of the Small and Medium Enterprises Committee, Chan Wing-kee, Mr Tung visited a watch manufacturing company in Cheung Sha Wan and an electronic art and design company in Wan Chai yesterday.
The committee has suggested the Government set aside $1.3 billion to set up four funding schemes for small and medium-sized firms.
Mr Tung said the Government was studying the committee report and would reach a conclusion soon.
He said smaller businesses formed an important part of Hong Kong's economy and should try to improve their skills.