The Government hopes to balance its budget in the medium term with increased revenue from a restructured tax base, according to Financial Secretary Donald Tsang Yam-kuen. Mr Tsang said a balanced budget was crucial for Hong Kong to maintain its international credit rating, 'which underpins investors' confidence . . . and the borrowing capability of local businesses'. Tax revenue has shrunk substantially since the Asian crisis because of sharp reductions in land sales income and stamp duties on property and stock transactions. Mr Tsang said that this financial year about 70 per cent of the yield from salaries tax is being shouldered by 15 per cent of the working population. The situation is similar for profits tax, with about 80 per cent of the revenue coming from 5 per cent of taxable business entities. 'We are expecting structural changes in our revenue base,' Mr Tsang said yesterday at an economic conference. 'We may no longer rely so much on land-related revenue as our land supply and demand stabilise. 'The situation is serious. We have to look at broadening our tax base to find other stable sources of revenue. I will be doing everything I can to lessen the load.' Mr Tsang did not elaborate on the changes. The budget deficit stood at $23.2 billion for the year to March 31. That figure included the $8.5 billion tax rate to corporations and individuals early this year. Mr Tsang said the budget deficit was partially the result of tax concessions in the previous two budgets and a package of economic relief measures announced in June last year that cost the Government $50 billion. In March, he forecast a budget deficit of $36.5 billion, or 2.8 per cent of gross domestic product for year, depleting the SAR's fiscal reserves to $389 billion. 'We don't have a bottomless gold mine,' Mr Tsang said. 'The first full budget of the new millennium will be an intricate balancing act. But one, I fear, that will not be sprinkled with gold dust.' The projected budget deficit for 2000-01 will be $5.6 billion, assuming the partial privatisation of Mass Transit Railway Corp proceeds. This will give $30 billion in exceptional revenue to the Government between next year and 2002. Mr Tsang hinted extra tax concessions would not be granted in future. 'People who advocate the easy way out should bear in mind a famous phase coined by a former Australian prime minister [Malcolm Fraser]: 'Life was not meant to be easy'. 'He may have regretted saying it, but it does sound a salutary warning to those wanting more concessions, more handouts.'