Budget passed as opposition fades

PUBLISHED : Thursday, 30 March, 2006, 12:00am
UPDATED : Thursday, 30 March, 2006, 12:00am

Pledge of more concessions for needy secures approval for Tang's blueprint

Huffing and puffing by lawmakers threatening to vote down the budget evaporated yesterday as Henry Tang Ying-yen's blueprint for 2006-07 passed with the highest support of any of his three budgets.

After the financial secretary pledged to look into more concessions for needy families in future, lawmakers passed his budget by 50-4 with one abstention.

Mr Tang said he would study a proposal for a one-off allowance for parents of newborn babies as a way to encourage childbirth. This proposal came from the Democratic Alliance for the Betterment and Progress of Hong Kong during the budget consultation.

Proposals such as a child development fund and tax relief for associate degree tuition fees would also be considered. 'If the financial climate continues to improve, we will consider future tax concessions,' he said.

Mr Tang has been criticised for refusing major tax cuts and increased spending, despite achieving a balanced budget three years ahead of schedule.

February figures show the surplus has shrunk from $19.6 billion in January to $12.1 billion, but is still way above Mr Tang's estimate of $4.1 billion for the whole year.

Tabling his budget for the vote, he admitted that the final figure, to be released on April 29, would exceed his budget estimate.

He denied manipulating the figures to dampen demands for more tax cuts.

Mr Tang said some demands made were conflicting and impossible to deliver together. 'It would be reckless of me to introduce major tax concessions. Indeed, had I done so, I would be accused of trying to buy some popularity.'

On the feasibility of introducing a goods and service tax, Mr Tang said the need to consider a broad-based tax was clear. 'I hope members will put aside their short-term political interests and their opposition to every tax proposal without having considered the rationale.'

Democratic Party legislator Sin Chung-kai said experience showed the final month of the financial year might see a surplus of up to $6 billion. He expected the final figure could reach $15 billion to $20 billion.

He said the party decided to vote for the budget because the concessions offered by Mr Tang had positively responded to their demands.

Civic Party leader Audrey Eu Yuet-mee said her party's last-minute decision to support the budget was based on the recent change of attitude by the government.

'The budget failed to address many issues, but we considered the new measures proposed by the government in recent days.'

Independent lawmaker Albert Cheng King-hon, who walked out during the vote, said: 'It's hard to choose between whether to support it or not. It's a step forward. I agree that the government is easing the pressure on the poor, but there's not much on helping the CSSA recipients as well as the disabled.'

Mr Tang's previous budgets were passed by a vote of 48 to six last year and 43 to five, with three abstentions in 2004.