Budget Speech

Mr President,

      I move that the Appropriation Bill 2009 be read a second time.

Introduction

2.      Since my first Budget last year, the global financial environment has changed dramatically. The financial crisis triggered by the US sub-prime mortgage problem is the most severe for the world economy since the Great Depression in the 1930s. This once-in-a-century financial turmoil has spread from the financial markets to the real economy, leading to a synchronised global recession. Being a small open economy, Hong Kong will inevitably be hit by the turmoil and our economy will slide into recession.

3.      At times such as this, we need far-sightedness and courage. We also need to be strategic in our thinking and have the ability in problem solving so as to arrest as best we can the knock-on effects of the financial crisis. More importantly, we need to use our expertise to anticipate the development of the financial turmoil by taking countermeasures and making judgement in light of circumstances. We are responding with measures to ease the liquidity crunch in the financial system, relieve financing difficulties faced by enterprises, and bolster the community's confidence.

4.      I will be responsive to social problems arising from the economic downturn, including unemployment, reduced incomes, and the negative wealth effect of lower property and stock values. I will provide a full, clear and honest account of our economic prospects. Through clear appreciation of the troubles we face together, we will endure and overcome them together.

5.      To our citizens, having a job is of the utmost importance. In a financial crisis, having a secure job is like an anchor that provides stability to a ship in rough seas. The best way to preserve jobs is to improve our economy. Therefore, while we need to create more employment opportunities in the near future, we should concentrate on promoting medium and long-term development, strengthen our economic foundations, bolster our existing strengths and tap new opportunities during this worldwide economic slump. The financial turmoil has impacted on the life of many citizens. Until the turmoil subsides, we need to help those with new or added burdens so that they can overcome the present difficulties.

6.      In preparing this Budget, I have been guided by three principles. First, in response to the economic recession and rising unemployment, I have given priority to measures that are effective in creating jobs and supporting employment. Second, I have sought measures that can increase the overall competitiveness of our economy and enhance the quality of life for our society. Third, to foster a return to healthy growth in the economy, I have sought measures that promote a more sustainable economic development, tap new opportunities, and provide new economic drivers to benefit Hong Kong in the long run.

7.      In this Budget, I will explain the short, medium and long-term strategies to be adopted by the Government, adhering to the principles of prudent management of public finances and acting in the interest of our citizens:

8.      Troubled times have come, but I am confident that with tenacity and wisdom we can weather this financial storm and put Hong Kong back on course again as a vibrant city of opportunity.