Any economic recovery in Hong Kong will most likely follow that of the U.S. and as far as the current situation is concerned, Hong Kong people might need to endure difficulties for slightly longer than the U.S. Consequently, the SAR Government should now allocate its fiscal reserves to relieve hardships and improve the business environment.

The government has projected a deficit of HK$60 billion for this year, a substantial increase over the earlier expected figure of HK$3 billion. Despite a record deficit, my objection to the government's plan to increase taxes or introducing new taxes to top up its coffers remains the same. I also unanimously support the Financial Secretary's decision to reduce the deficit by firstly cutting government expenditure.

As I have always stressed, there is much room for the administration to trim its expenditure, especially civil service pay. Indeed, the salaries of civil servants are generally 30 to 40 per cent higher than those of private enterprises. Civil servants also enjoy many fringe benefits. The pay expenses for civil servants and employees of subsidized organizations in fact account for 70 per cent of the government's recurrent expenditure.

Much of the government's expenditure is unjustifiable. Recent public criticism has finally pushed it to work out ways to streamline its internal structure and to conduct an overhaul of its pay mechanism. I hope the government speeds up this reform before things get any worse. As for the budget deficit, I believe our fiscal reserves of HK$400 billion and a net asset exchange fund of HK$300 billion are enough to cope with the current problem. Also, the government's move to trim expenditure will go a long way towards easing its financial burden.

I, together with eight Legco parties, suggested that the government use HK$25 billion of its reserves to stimulate the economy and put the Hong Kong economy back on track.

A favorable business environment is also needed to hasten economic recovery. Legco recently launched a new round of talks regarding the Occupational Safety and Health (Display Screen Equipment) Regulation, which I mentioned in my last article.

During the meeting, I insisted that the indemnity be confined to employees who use computers for four consecutive hours or above, rather than those who use computers for just an hour or so. I don't think a law enforcement officer prosecuting a company chief without any prior warning and requesting the head to provide evidence in their defense is right. The regulation is too draconian and would meddle with the business environment. Therefore, studies should be conducted on this issue.