Suitably Postponing Elimination of Fiscal Deficit

41. Economic restructuring has caused structural problems for our public finances. Last year, I stressed the need to reduce the fiscal deficit because this would have a bearing on the overall stability of our financial system and thus cannot be avoided. In reducing the deficit, the public has paid a price and our civil servants have made their commitments. Due to the SARS outbreak, government spending has increased. The Financial Secretary has postponed the target date for restoring fiscal balance to 2008-2009. The ways to eliminate the fiscal deficit are to increase taxes and fees, cut expenditure and promote economic growth. Now that we are beginning to see signs of an economic recovery, we will strive to ensure sustained growth and to reduce deflation. We will take closely into account changes in the community when considering what people can realistically bear. We will seek to strike a careful balance between reducing the fiscal deficit and safeguarding people's livelihood, and give the community adequate time to recover.