Updated at 4.48pm: Financial Secretary Henry Tang Ying-yen on Wednesday said Hong Kong?s controversial civil service would have a small increase in staff levels by early next year. Making his fourth budget speech in the Legislative Council, the financial secretary stressed that the government was still committed to ultimately restricting the size of Hong Kong?s large bureaucracy. In the past, Hong Kong?s large civil service and the high salaries of many of its members has taken the blame for contributing to the government?s fiscal deficit. This prompted the government to reduce civil service numbers and implement a freeze on salaries. Mr Tang said the civil service?s manpower situation would again be reviewed. ?Since we must strictly control the size of the civil service, we will consider filling existing vacancies or creating new posts only after critically reviewing our manpower situation and exploring the feasibility of other options for service delivery,? he said. He said the civil service would be slightly expanded to about 162,900 by the end of March next year ? an increase of less than 1 per cent. ?To complement the creation of new posts and to pre-empt possible succession problems arising in the civil service, we will resume open recruitment of civil servants from April 1 [this year],? Mr Tang added However, he stressed that the recruitment freeze would continue to apply to those grades covered by the Second Voluntary Retirement Scheme. ?It has long been our policy for civil service pay to offer adequate remuneration to attract, retain and motivate staff of suitable calibre who can provide the public with quality services.? Mr Tang also said Hong Kong had a budget surplus but fiscal discipline was vital. ?One of the most important factors behind the recovery of our financial health has been our maintenance of strict fiscal discipline.? Mr Tang said he was trying to maintain a prudent, yet conservative fiscal stance. ?My fiscal policy aims to strike a balance between promoting economic development, improving people?s livelihood and supporting the long-term development of Hong Kong.? He revealed that government expenditure for 2007-08 was estimated to be HK$248.4 billion. Expenditure on education, social welfare and health would account for more than 60 per cent of this. ?The total provision for government operating expenditure for 2007-08 will be HK$214.2 billion, an increase of HK$5.2 billion over 2006-07.? Mr Tang said allocations to government bureaus for the coming year would also be increased. He also announced continued infrastructure development. ?Developing our infrastructure can promote economic development, increase employment opportunities and improve our living environment. ?As I have previously pledged, we will continue to earmark HK$29 billion a year on average for infrastructure projects over the next few years.? He said that in the next financial year, major projects would commence. These included the Tamar development project and upgrading works for the 2009 East Asian Games sports facilities. Also planned were Stage 2 of the Replacement and Rehabilitation Programme for Water Mains, and drainage works in various districts. ?It is expected that these will create about 23 000 jobs for the construction industry,? Mr Tang ventured. ?In addition, we are now planning some major projects, including the Central-Wan Chai Bypass and Wan Chai Development Phase II, Central Kowloon Route and Kai Tak Development, which will involve expenditure of HK$25.2 billion, HK$12.5 billion and HK$9.8 billion, respectively.? Mr Tang said these projects would provide about 14,000 new jobs for the construction industry. ?However, these projects have yet to commence as they require more time for preparatory work, including public consultation. ?We very much hope, therefore, that the various sectors of the community can reach a consensus on these projects as soon as possible, so that an early start can be made on them. We have also revised the Concept Plan for Lantau.?