Fees and charges may have to rise next year, Financial Secretary Donald Tsang Yam-kuen warned yesterday. The freeze of more than 20 months may have to end to help reduce the budget deficit, Mr Tsang announced at the end of two weeks of talks with lawmakers on next year's Budget. He also warned that a Lowu border tax, first suggested in the Budget this year, might be introduced. One attempt to increase the 3,000 fees and charges - ranging from water charges to school fees and passport fees, sewage charges and dog licences - failed in June in the face of fierce opposition. Increases, ranging from three to five per cent, could generate an additional $250 million in revenue. Mr Tsang said that income from fees and charges covered about 20 per cent of government spending 10 years ago. Now it contributed a mere eight per cent. 'This is indeed very worrying . . . . Our fees income has been weakening in the past decade and our tax base has not been widened. We must reach a consensus to resolve it,' he said. Mr Tsang said there would be deficit budgets for three consecutive years. The total deficit for 1998-99 was $23 billion, while a $36 billion deficit has been forecast for this year. Mr Tsang warned that there would be a deficit of between $5 billion and $6 billion next year. 'I need to do a great deal to ensure that the Budget will return to balance in the year 2001,' he said. He said he had yet to map out his strategy for the coming Budget. It would depend on economic figures for the third quarter available next month. On the land departure tax idea he floated in the last Budget, Mr Tsang said it was a fair way to 'widen the source of revenue and tackle the deficit'. Major political parties are opposing increases to fees and charges. Dr Yeung Sum of the Democratic Party said that his party opposed any fee rises. James Tien Pei-chun of the Liberal Party said all fees should stay frozen. He said the administration should examine ways to implement its user-pays programmes more cost-effectively. Unionist legislator Lau Chin-shek said: 'As the economy has yet to turn for the better, the proposed increases in fees and charges will further add to the already heavy burden shouldered by the public.' Chan Kam-lam of the Democratic Alliance for the Betterment of Hong Kong said his party opposed such increases but would consider backing increases on items not related to people's livelihood. Executive Councillor Tam Yiu-chung, a DAB lawmaker, had reservations about fees rises and the Lowu border tax. 'There will be a strong reaction from the public since the economy has not recovered entirely,' he said. 'I hope the Financial Secretary will study it carefully.' Mr Tam said he expected income from profits tax and salary tax to increase, removing any need for increased fees and charges.