Helping out the Community

Budget proposes many relief measures –


save 6.4 billion


  • Reduce rates payments, by raising the level of waiver from $2,000 to $5,000. About 85% or 2.3 million ratepayers pay no rates for one year 



  • Waive water and sewage charges for one year, subject to maximum amounts set at $800 and $200 respectively for domestic households, and at $3,200 and $800 respectively for non-domestic consumers.  About 80% of households and business consumers pay no water and sewage charges for one year

  • Reduce trade effluent surcharge by 30% for one year
  • Waive business registration fee for one year

  • Extend duty concession for ultra low sulphur diesel for one year to 31 March 2003

  • Freeze government fees and charges for one year


water and sewage charges

Expenditure Initiatives


  • Total government expenditure for 2002-03 at $259.8 billion, up $20.1 billion over 2001-02


  • Funds earmarked for Chief Executive Policy Address initiatives, including improving education, enhancing employment, investing in infrastructure and helping the disadvantaged and those in hardship




works projects

  • Government capital expenditure $49.4 billion, up 21% over 2001-02


  • Capital expenditure mainly on works projects



  • Within total recurrent government expenditure
  • Education at $49.3 billion, up 8% over 2001-02

  • Health at $32.4 billion, up 4%

  • Social Welfare at $32.1 billion, up 9%


civil servant
  • Expenditure estimates for 2002-03 assume 4.75% civil service pay reduction from 1 October 2002


  • $400 million allocated to two-year Youth Work Experience and Training Scheme for on-the-job training for about 10000 young people


Revenue Proposals
Only modest non-livelihood revenue-raising measures proposed –
  • Duty on wine up from 60% to 80%
  • Duty-free tobacco allowance for local residents cut by 40% to 60 cigarettes or 15 cigars or 75 grammes of tobacco; duty-free wine allowance cut by 25% to 750 milliliters


Public Finances:
Restoring Medium-term Balance


Medium Term Targets

Financial Secretary sets three targets for 2006-07

  •  Restore balance in Consolidated Account

  •  Attain a balanced Operating Account

  •  Reduce public expenditure to 20% of GDP or below


Financial Position of Current and Coming Years

  • Consolidated deficit at $65.6 billion and operating deficit at $50.7 billion for 2001-02

  • Consolidated deficit at $45.2 billion and operating deficit at $49.3 billion for 2002-03

  • Contain growth of government expenditure below that of economy in coming years

  • Raise additional revenue, e.g. through sale of government assets and introduction of Boundary Facilities Improvement Tax in 2003-04


Forecast in 2006-07

  •  Fiscal balance achieved

  •  Public expenditure reduced to 20% of GDP

  •  Fiscal reserves equivalent to 12 months of government expenditure




fiscal balance



Economic Development Strategies
  • Capitalise on Hong Kong's strengths, develop high-value-added economic activities, particularly financial services, logistics, tourism and producer and professional services

  •  Enhance flows of people, goods, capital, information and services to and from Mainland, seize opportunities from Mainland's WTO accession



  • Upgrade quality of manpower and increase number of talented individuals, by improving education and attracting outside talent

  •  Promote development of local community economy closely linked to daily life, e.g. small traders and personal services, to help employment

  •  Seek to excel by using quality, speed and creativity to produce and deliver services and products



speed, creativity, quality



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