The most interesting aspect of the financial secretary's 2006-2007 budget is the forecast for large surpluses from now until 2010. Some people say the government should have more ambitious spending programmes. Others say the money should be given back to the people by lowering taxes further.
Let us first look at how large the surpluses are. The consolidated surplus forecasts per year from 2006-2007 to 2010-2011 are: $5.6 billion, $10.3 billion, $23.2 billion, $19.1 billion and $32.6 billion.
But some tax experts believe the surplus for 2006-2007 could be as high as $15 billion. We will know the final figure in a few months.
So, what kind of spending does Hong Kong need to become more competitive with cities on the mainland and the rest of Asia? We must think about improving both our software and hardware.
The software of our success lies in areas like improving education from kindergarten to university; ensuring that we have the diverse human talents to perform all kinds of activities at a high level; and improving our rule of law, so that our social and economic activities are well regulated, on a par with cities such as London and New York.
Improving software is about improving our management capacity for all kinds of activities, and it is rooted in the quality of the people.