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.
- Legislators and stall owners yesterday joined a chorus of calls for the Government to cut rental fees in markets by 20 per cent to 50 per cent to ease their economic difficulties. A group of about 90 stall owners in markets run by the Food and Environmental Hygiene Department petitioned for the cut outside Legco. They said their revenue had dropped by 20 per cent to 30 per cent in the past year and wanted a rent reduction when a moratorium on market rental fees expired at the end of this year. Department deputy director Cheuk Wing-hing said officials were studying rent levels.