Financial Secretary Henry Tang Ying-yen's first budget will not contain any drastic measures, a government source has revealed. Preparations for the budget are understood to have gathered momentum, with Mr Tang laying down the broad fiscal direction. Speaking after talks with lawmakers yesterday, Mr Tang said he hoped to throw light on his budget plans as early as next month. 'I hope to give an account on the target to eliminate the budget deficit and the fiscal management philosophy to lawmakers and the public when [Legco] resumes meetings next month,'' he said. His office later said Mr Tang would outline the overall fiscal approach and priorities to Legco rather than provide a timetable on the elimination of the deficit. Mr Tang had described the target of balancing the books by 2006-07 laid down by his predecessor, Antony Leung Kam-chung, as unrealistic. The government source said the time frame would only be finalised when details of the revenue, expenditure and economic growth forecast became clearer later. Mr Tang is understood to be discussing expenditure estimates for 2004-05 with bureau chiefs under an 'envelope'' approach, which allows department secretaries flexibility in their use of the lump sum provided. Noting the public criticisms that too many reforms had been initiated by the government in the past years, the source said the Tung team was inclined make as little changes as possible. Although Mr Tang has initiated a working group to study the details of a sales tax, he made it clear that it would not be introduced in the next few years, the source added. The source said while it was understandable that individual departments might find it difficult to meet the spending cuts imposed across-the-board, such cuts were the best option given the deficit. While delaying the previous target of balancing the accounts in 2006-07 is almost a foregone conclusion, Mr Tang is understood to be keen to map out concrete ways to show the government's commitment in tackling the deficit.