214. Mr President, the office of Financial Secretary represents the most demanding responsibility that I have taken up during my years in the public service. It is my great honour to have had the opportunity to take on these challenges and difficulties with the people of Hong Kong.
215. I shall never forget the days when we were working together to fight against the financial turmoil. Beset with an unprecedented crisis, our financial stability was shaken, local exports fell by the biggest margin ever. This led to rising unemployment and negative GDP growth, affecting SMEs and the livelihood of our people. But, the people of Hong Kong rose to the difficulties with perseverance and flexibility. We not only rode out the crisis, we also staged a swift rebound well in advance of other economies. Thanks to the solidarity and commitment of all our people, our financial system remained stable while GDP has returned to positive growth. With full employment, Hong Kong saw a more vibrant retail business and market growth.
216. While adhering to the principles of prudent management of public finances, we show our commitment to the community. For my five budgets, I have increased government expenditure by nearly 70 per cent. This exceeds GDP growth of 21 per cent for the same period. Dedicated to education, medical services and social welfare to cater for public needs in such areas, this spending also helps invest in the future and sustain economic vibrancy. The increase in expenditure demonstrates our commitment, and confidence in Hong Kong. But we always bear in mind the importance of ensuring the structural integrity of public finances and keeping adequate fiscal reserves for future challenges. This will also save our next generation from bearing a heavy burden. In this year’s Budget, I have made proposals to build on the sound economic conditions facing us to brace ourselves for a possible downturn. Although this term of Government will end in the middle of this year, we shall never give anything but our very best. Where necessary, we shall take appropriate and timely measures in a responsible manner to safeguard the well being of our society and economy.
217. A number of advanced economies around the world are currently engulfed by debt crises. The crux of their difficulties lies in lax fiscal discipline that makes it hard to rectify the situation. These governments have no alternative but to slash their expenditure or drastically increase their revenue, resulting in problems of all kinds in the political economy and society. These are real examples of how much trouble overspending and excessive borrowing can cause. They have convinced me that fiscal prudence is crucial if we are to maintain our socio-economic stability. It is sensible to uphold the principle of sustainability in public finance management. It is a principle that should not be abandoned lightly.
218. Looking ahead, global economic crises will take a different course in terms of frequency, speed of contagion and intensity under the impact of globalisation. As Hong Kong continues to grow, being an open and small economy, it is inevitably vulnerable to any fluctuation in the world economy. In the face of social and economic changes in the days to come, we must uphold the principle of prudent management of public finances and strive to take pragmatic relief measures. This will involve greater wisdom and courage.
219. Trust and co-operation are keys to the functioning of a modern economy. With trust and co-operation come reduced transaction costs, increased opportunities for economic development and social advance. Without them, crises and shocks may easily make us stumble. That is why we always want the "big society" to play its part in fostering opportunity for community co-operation and solving social problems by engaging public resources to support community efforts.
220. This Government puts people first. We introduced an array of measures to stabilise the economy and safeguard people’s livelihood during the past five years. We attach importance to preserving employment not just for the sake of socio-economic stability, but because we take our people as our primary concern. Similarly, when we invest in the future, we do not focus solely on hard infrastructure. We place particular emphasis on the provision of education opportunities for individuals and promote the well-being of the community. We make every effort to ease the hardship of those living in poverty. No matter how difficult the economic environment is, we never give up our commitment to do so.
221. Since I became Financial Secretary five years ago, I have always worked conscientiously. As the saying goes, "A steady conscience can stand the brunt of life." We have weathered tough times together, and overcome challenges and, each time, we have scaled new heights in our economic development. We may not always see eye-to-eye with each other on how to deal with the difficulties we face, but working together we have always been able to find ways to develop Hong Kong into a better place. Behind the intense discussions are our shared beliefs and affection for the place we live in, our home, Hong Kong. We have survived all the crises and made Hong Kong a modern international city which we can all be proud of. We are also able to show to the world our tenacity in the face of global competition.
222. Mr President, we are fortunate to live and work in Hong Kong. True, this extraordinary city is not immune to challenges, but it also brings out the best in us by providing inspiring opportunities. From every crisis, without exception, we have emerged stronger and stood taller before the world. Undoubtedly, there will be many more ups and downs on the road ahead. But, if we take our shared beliefs as our guide and seek unity in our cause and trust in each other, there is nothing to stop us reaching many more milestones. This is not only my sincere wish, but my unshakeable conviction.