| Development and Prospects
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23. In January, the Chief Executive set a direction for the economic development of Hong Kong in his Policy Address. We are implementing concrete measures to carry out the plan to develop our economy and improve people's livelihood. I will give a brief description of the following five areas:
- Big market, small government
- Building Hong Kong into a regional metropolis
- Developing human resources and infrastructure
- Enhancing core industries
- Increasing employment opportunities.
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Big Market, Small Government
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24. We believe that a free market will lead to optimal distribution of resources, promote economic growth and create employment opportunities. In his Policy Address, the Chief Executive set out "big market, small government" as the underlying principle of the Administration's philosophy of governance.
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25. To contain the growth in public expenditure so that the public sector will not become a burden on the community is fundamental to realising the principle of "big market, small government". The target I set last year to reduce public expenditure to 20% of GDP or below in the medium term was for the purpose of restraining the growth of public expenditure.
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26. Second, the Government must continue to support the market in policy-making instead of participating in it directly. We will review our regulatory regimes from time to time and modernise rules and regulations to ensure that they remain up-to-date. The introduction of a new housing policy has clarified the Government's role in the housing market. The Government will supply land in response to market demand and provide low-rent public housing for those in need. However, it will no longer act as a property developer by building houses for sale to the public. The task force to be appointed by the Chief Executive will study further measures to improve the business environment.
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27. Third, the Government has also clearly stated that it would adopt the "3R1M" approach, that is to reprioritise the provision of services, reorganise the structure of government departments, reengineer procedures and make full use of the market, so as to optimise resources and provide better services for the public. Over the past year, some government bureaux and departments have been merged and more services have been outsourced. We will also continue to encourage private-sector participation in the provision of services and infrastructure projects.
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