As another year of deficit looms, the financial secretary has pledged to consider the state of the economy and how much the public can afford to part with when working out the Budget next month. Antony Leung Kam-chung said the government would find a 'fair and reasonable' solution to tackling the deficit. The remarks followed a discussion with members of the Eastern District Council and Hong Kong Island residents to solicit their views on the Budget, due to be unveiled on March 5. Mr Leung said that as the government planned to balance the books by 2006-07, there would be a deficit in the next financial year. Chief Executive Tung Chee-hwa has revised the government's estimate of the deficit to about $70 billion, an increase from the $45.2 billion estimated last March. The deficit for the first 10 months of the financial year up to January was $77.3 billion. Mr Leung said the deficit was the result of increasing government expenditure and falling revenue. At yesterday's talks, some councillors called for Hong Kong to follow the example of the United States and cut tax to stimulate the economy. America's deficit is equivalent to 3 per cent of its gross domestic product. In Hong Kong, the figure is nearer 6 per cent. Mr Leung said population growth was one way to help stimulate the economy. He said Hong Kong had a low birth rate, which meant that in 20 to 30 years' time, a large proportion of the population would be elderly. Other district councillors urged the government not to cut comprehensive social security assistance payments. Some urged the government to tighten monitoring of welfare recipients. The government was asked not to target middle-class property owners who were burdened with negative equity. Mr Leung also toured the marine police regional headquarters in Sai Wan Ho and watched a demonstration of a high-speed vessel that belongs to the anti-smuggling taskforce. He also visited the second phase of the Taikoo Shing shopping mall, which includes an ice skating ring, and toured some shops where he bought Chinese sweets.
