Using more private capital and debt financing to fund public works such as roads, sewage plants and schools could dramatically ease the budget deficit woes because payments on loans and interests will be done in future. Such an overhaul would benefit taxpayers and make better use of government reserves, according to Civic Exchange. Rather than using only its own cash to fund infrastructure projects, the government should adopt private-sector practice and resort to more bank loans. Government corporations such as the MTRC have used private capital to fund big-ticket projects, but most infrastructure schemes have relied on land revenues paid to a dedicated fund - the Capital Works Reserve Fund. 'There is no reason we should be paying cash for projects that have multi-decade life spans,' Civic Exchange argued. It said such an approach was inequitable. 'What this means is capital items have been paid for by the current population, for the benefit of unborn people who are likely to get the use of the capital assets free of charge in, say, 20 years' time.' Ahead of Financial Secretary Antony Leung Kam-chung's March 5 Budget, some economists argue that Hong kong should issue billions of dollars of bonds to fund public works. Civic Exchange says borrowing money as a means of balancing the books is not the way forward. But using loans to fund projects should be considered. It says Hong Kong should privatise entities such as the Airport Authority and use the proceeds to partly fund infrastructure projects, with the rest sourced through debt financing. 'With such a strong balance sheet, the government can borrow cheaply,' the report said. This is in contrast to the pre-handover administration, which the report said adopted a 'ridiculously conservative approach' to debt in order to minimise future liabilities. It said the distinction in the accounts between land and general revenue should be abolished as the government was the sole owner of all land development rights in the city and could expect to earn revenue for years. This was consistent with an accrual accounting approach and better reflected Hong Kong's fiscal situation, it said.