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Following is a transcript (English portion) of the standup briefing by the Secretary for Constitutional Affairs, Mr Stephen Lam, on the two documents for this Friday's meeting of the Committee on Governance and Political Development of the Commission on Strategic Development (CSD), at Central Government Offices this afternoon (March 22):
SCA: The Committee on Governance and Political Development of the Commission on Strategic Development will have its third meeting this coming Friday. We have just issued the papers for this meeting today and we would like to highlight a few points.
In previous discussions, we have focussed on various principles which are important to constitutional development. Firstly, we need to meet the interests of different sectors of society in pursuing constitutional development. We have to ensure that we facilitate the development of a capitalist economy.
We have to adhere to the principle of gradual and orderly progress. We also have to ensure that constitutional development fits in with the actual situation in Hong Kong. On this coming Friday we will focus on two particular principles i.e. that we have to facilitate the development of the capitalist economy in Hong Kong and that we continue to meet the interests of various sectors of Hong Kong society.
The Basic Law itself also has provisions relating to economic and financial system. Firstly, we have to ensure that we maintain a fiscal balance. Secondly, we have to observe the principle of financial prudence. Thirdly, we have to strive to maintain a simple and low tax base. These are financial principles which have served Hong Kong very well all these decades. In pursuing constitutional development and seeking to implement universal suffrage we need to ensure that we will be able to continue to adhere to these important and fundamental principles.
As compared to developed economy around the world, Hong Kong's tax base is relatively narrower; and Hong Kong's tax rate is relatively lower. If we take 2004 as an example, the proportion of government's expenditure as a percentage of GDP is about 18%; and the proportion of government's revenue as a proportion of GDP is about 20%. The respective comparative percentages for OECD economies are 40% and 37%. So you can see that comparison very clearly.
In pursuing the course of constitutional development and in the course of exploring the implementation of universal suffrage, we have to ensure that these important principles of fiscal balance, financial prudence, and a low tax rate, are observed in future as and when we attain the ultimate aim of universal suffrage.
We are still in the first half of 2006 and the Commission on Strategic Development is still focusing on discussions about the principles and concepts of universal suffrage. Now in the second half of this year, we will begin to discuss more specific details about systems for implementing universal suffrage for Chief Executive and Legislative Council elections, and the question of a roadmap.
Reporter: Is narrow tax base one of the reasons conflicting with universal suffrage? Can you tell us why?
SCA: I am not saying that the size and scope of any particular tax base is necessarily a precondition for the implementation of universal suffrage. All I am saying is that, in the course of pursuing constitutional development, we should have regard to the experience in overseas countries. We can see for ourselves that overseas where there are systems of universal suffrage and direct elections, political leaders obviously face rather serious public pressure for implementing more public services. That will have an impact on fiscal prudence and government budgetary process.
All these years, Hong Kong has held very close and dear to our own hearts, Hong Kong's freedom, Hong Kong's open society and our fiscal prudence and capitalist economy. We have to ensure that in pursuing the route of universal suffrage, we would have the capability to continue to preserve these important principles. That is all what I am saying and that we need to have very thorough discussion about how we can pursue and attain these objectives.
Reporter: Do you think that bi-cameral legislature may be a compromise between the two?
SCA: The possibility of pursuing a bi-cameral legislature is only one of the many ideas which have been put forth to us. I think that's an idea which certain parties believe would be able to help us continue to address the interests of different sectors and strata in Hong Kong community. That is not so closely related to the question of maintaining fiscal prudence and also fiscal balance.
(Please also refer to the Chinese portion of the transcript.)
Ends/Wednesday, March 22, 2006
Issued at HKT 20:37
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