Budget proposes many relief measures –

• 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

• 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

• 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%

• 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

• 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

• 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