109.    I have pledged that the Government will maintain fiscal discipline.  We have the determination and ability to attain our fiscal targets.  Last year, I pledged to cut spending first and reverse the rising trend of operating expenditure.  With the concerted efforts of my colleagues in the various departments, our cost-saving measures are now starting to produce results.  Last year, I said that I would reduce operating expenditure to $200 billion by 2008?9.  This is now forecast to reduce to $201.2 billion for 2004?5.  I said that I would bring public expenditure down to 20 per cent of GDP or below, and this is forecast to decrease to 20.2 per cent next year.  We expect to achieve balance in the Consolidated Account in 2007?8, one year ahead of target.  While we will persevere in restoring fiscal balance, we have proposed a number of tax concessions to relieve the burden on some taxpayers.  Our proposal to abolish estate duty will encourage the further development of Hong Kong as an international financial centre.  For the proposed introduction of GST, the Government will give the public ample opportunity to express their views.

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