Overall Impact

52. We will examine carefully the potential impact of the various measures to resolve the fiscal deficit. In particular, we will ensure they will not add significantly to deflation nor, despite increased taxes, fees and charges, fundamentally change the primary principle of maintaining a simple and low tax regime. In achieving our goal to eliminate the fiscal deficit, we are proceeding cautiously to strike the right balance between maintaining financial discipline on the one hand and the need to revitalise the economy on the other. We will economise, enhance efficiency, dispense with redundant services and re-deploy our resources, taking practical measures to prevent any erosion in the quality of public services and ensuring the continuation of the necessary ones.

Standing by the Community

53. To demonstrate our determination to share the hard times with the community, the 14 Principal Officials, the Director of the Chief Executive's Office, the Head of the Central Policy Unit and myself will cut our pay by 10% with effect from 1 April 2003. I am convinced that by joining hands with the community, the Government can reduce its expenditure and contribute effectively to solving the fiscal deficit problem.