Following is the full text of the Speech on the 2017-18 Budget delivered by the Financial Secretary, Mr Paul Chan, in the Legislative Council today (February 22):

Mr President, Honourable Members and fellow citizens,

     I move that the Appropriation Bill 2017 be read a second time.

Introduction

2. When I took over as the Financial Secretary on 16 January this year, the foremost task before me was to prepare the Budget for the coming financial year.  I kept asking myself - What does Hong Kong need most now?  What are citizens expectations of the Government?  What is our ideal way of life?  How can we attain a sense of well-being?  How do we position Hong Kong as an international city?

3. I came from a poor family and grew up in the 1960s and 1970s when people in Hong Kong were, in general, happy and satisfied with their lives as long as they had a shelter and got enough to eat and wear.  Hong Kong then saw brisk economic growth in the 1980s and 1990s and after that, two financial crises.  I believe that having gone through these changes, Hong Kong people now crave for more than the basic necessities.  We all want further progress in society, so that young people can cherish hopes for the future, the middle-aged need not worry about the competitiveness of the younger generation, and the elderly will have no fear of abandonment.

4. It is not beyond our capacity to realise this vision for Hong Kong, but I dare not boast that we can open up a new world for Hong Kong by one Budget alone.  My endeavour is to make use of the wealth we have accumulated together through hard work to take care of the needy in the society, ease the heavy burden of middle-class families, and make appropriate investments essential for building a better Hong Kong.

5. I understand that people from all walks of life have different expectations of the Budget and hope the Government can respond to their demands.  However, the reality is that resources are not unlimited, and that no Budget can ever meet the needs of each and every member of the community and win applause from all.  We can only devote our best efforts to provide support for those in need, share wealth with the community when there is a substantial surplus and allocate resources to areas which are conducive to our social and economic development.

6. In the coming year, our economy will be fraught with uncertainties arising from the complicated and volatile external environment.  I hope that with wisdom, collaboration and relentless efforts, we will have the strength to rise to all challenges ahead and embrace the future with hope. 

Economic Performance in 2016

7. The global economy operated in low gear in 2016 and recorded the slowest growth since the global financial crisis.  The situation was particularly grim at the beginning of the year, affecting the trade performance of Hong Kong and the Asian region.  The subsequent abatement of downward pressures on the external front led to a rebound in Hong Kongs exports of goods, registering a year-on-year growth of 1.7 per cent in real terms for 2016 as a whole.  Exports of services, though showing some relative improvement during the year and picking up in the fourth quarter, still fell by 3.1 per cent for the whole year.  With the gradual recovery of tourism, the decline in the overall retail sales volume slowed notably to only 3.6 per cent in the fourth quarter, but for the whole year it was still down by 7.1 per cent.

8. Domestic demand strengthened in the latter half of last year.  Favourable employment and earnings conditions, together with the support of relief measures introduced in the last Budget, were conducive to sanguine consumer sentiment.  The growth of private consumption expenditure gathered pace in the second half of last year, and investment expenditure also bounced back visibly.

9. Overall, the local economy picked up progressively from a marginal growth rate of one per cent in the first quarter to 3.1 per cent in the fourth quarter.  For 2016 as a whole, there was a modest growth of 1.9 per cent, generally in line with the one to two per cent economic growth as forecast in last years Budget.

10. The unemployment rate averaged 3.4 per cent last year, sustaining a state of full employment in general.  Inflation pressure was moderate.  The headline inflation rate for 2016 was 2.4 per cent.  Netting out the effects of the Governments one-off measures, the underlying inflation rate was 2.3 per cent in 2016, the fifth consecutive year of easing.

(To be continued.)

Ends/Wednesday, February 22, 2017
Issued at HKT 11:06

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