Cutbacks to help the budget deficit can only be achieved if every sector of the community, including the civil service, is prepared to share the burden, the financial secretary warned yesterday. Antony Leung Kam-chung told members of the British Chamber of Commerce in a luncheon speech: 'I believe that, by and large, Hong Kong people recognise the need for every one of us to tighten our belts. It's a painful process, but it is absolutely essential for us to grasp the nettle and bring the deficit under control.' He said achieving the government's aim of cutting spending by $20 billion by 2006-7, including a 10 per cent reduction in the size of the civil service, was a 'fairly respectable target' given the need to maintain essential services and to consult major stakeholders before changes could be made. As well as civil servants, it was important that recipients of public services were prepared to shoulder the burden. Mr Leung said it would take time to remove the 'psychological cloud' over Hong Kong before the outlook improved and the city experienced a feel-good effect. To remove that cloud, the government plans to stimulate the economy and tackle deflation, as well as cutting the mounting deficit. Mr Leung said property prices had been a major factor in the gloomy mood affecting people so the government would take four steps to halt deflation: make Hong Kong more attractive to foreign investors, promote tourism, get more overseas companies to list on the stock market and encourage investor immigrants. All eyes are now on Mr Leung as he prepares to present the Budget in March but he did not drop any new clues on what to expect. The government would stick to its target of cutting civil service staff numbers by 10 per cent, a goal that can probably be accomplished through 'natural attrition and voluntary retirement', Mr Leung said in reply to a question after the speech. Another measure which has been proposed to reduce costs is to cut funding to the English Schools Foundation (ESF). Secretary for Education and Manpower Arthur Li Kwok-cheung said a month ago the grant may be cut but Mr Leung said he was not aware that a decision had been made. 'I believe the secretary for education and manpower is considering various alternatives,' he replied. The ESF, which has 16 schools offering an English curriculum to 11,500 students, has received $300 million from the government this year. It estimates tuition fees could rise by 40 per cent if the subsidy is scrapped.