Mickey Kantor, President Bill Clinton's U.S. trade representative and Department of Commerce chief, once told me that when his staff came to him proposing a new regulation affecting business, he said they should first come back with ten that he could cancel. He would then seriously consider the new one.

Singapore's Minister of State (Foreign Affairs and Trade and Industry), Raymond Lim, also told the Chamber in August how the Lion City now applied a "sunset clause" to all new regulations. Under this clause, if there is not a positive act of renewal of the new regulation after a certain period, it automatically lapses.

Hong Kong can learn from all these initiatives. If we are serious about tackling the size of the SAR Administration, which now accounts for 23 per cent of gross domestic product (GDP) and still employs 180,000 civil servants, then we are going to have to undertake similar -- but more extensive -- exercises in our own administration.

We should address outdated work processes, ensure that individual government departments work together better, make work practices more flexible and based on pay for performance, and change the civil service mindset to a service and results-orientated one. This will require new thinking and new ideas at the top with the new "ministers" providing the vision and political will.

One way of achieving at least part of this objective is to examine existing regulations on the government's books -- and all new ones -- to see if they are truly necessary and if they are not then they should be done away with. But we should also aim to do more.

Over-zealous regulation, poor work processes and lack of co-ordination in the decision-making process always come with costs attached, both to the government that administers them and to those in the community to which they apply.

All regulations involve the employment of civil servants to monitor and enforce them. Poor work processes lead to inefficiencies in implementation. And failures in co-ordination between departments lead to slow decisions and public dissatisfaction with implementation and interpretation of policies.

Fewer regulations and better work practices would lower costs and reduce the civil service. There would be improved productivity, greater efficiency and less tangled relations between different departments responsible for various aspects of the implementation of government policies.

Ultimately, such changes would also result not just in a more efficient government, but a slimmed-down government, both in terms of its overall expenditures and the numbers of civil servants it employs and whose wages and benefits account for by far the largest share of overall spending.

There are finally some beginning signs of positive developments recently on the twin issues of reducing the size of the Hong Kong SAR Administration and reforming the civil service.

First, modest public sector wage cuts went into effect on October 1, saving the government some HK$3 billion in a fiscal year.

Second, on October 9, in answer to a Legislative Council question, the Financial Secretary, Antony Leung, delivered a solid warning that more was to come to cut back government, including carrying out review of the government's work processes, setting project priorities, re-organising government structures and re-engineering procedures. He also mentioned outsourcing work and considering further corporatisation and privatisation, so as to raise efficiency and minimise wasteful resource use, and achieving the objective of "small government."

Third, he indicated the government would require the new "ministers" -- i.e., the directors of bureaux -- to cut spending 1.8 per cent in 2003-04 and 1 per cent each year for each of the next three years. He left it to the new ministers to determine how these savings would be achieved in their respective policy portfolios.

We strongly support the Financial Secretary in these initiatives, but believe we must and should be able to do better than this. There needs to be a system of continuous saving. Ministers must be encouraged to take the initiative themselves, take responsibility for fiscal restraint in their portfolios, and take the sometimes politically difficult decisions to achieve these savings. Let us not forget that this is a major reason to introduce the "ministerial" system, for these new ministers to think "outside of the box" both in terms of policy ideas and management initiatives.