195.     At present, under the principle of fiscal prudence, public expenditure is targeted at a level not exceeding 20% of our Gross Domestic Product.  We should maintain this fiscal discipline, which practical experience shows will help us maintain our long-term competitiveness and respond to sudden changes in the global economy.  Nevertheless, this does not mean that the Government pays no heed to the hardships of people in need.  The Government should help low-income families in a strategic way.  During my term of office, I put through legislation for a statutory minimum wage and introduced a direct transport subsidy for low-income workers.  I introduced many direct relief measures when fiscal conditions allowed.

196.     Another challenge to our philosophy of public administration comes from the expectation that the Government should do more in economic planning and the selection and nurturing of industries in order to sharpen our competitive edge.

197.     We have to be pragmatic in this regard. Macro planning, market intervention and favourable industry-specific policies should strictly follow the principle of “capturing opportunities and capitalising on strengths” instead of being dictated by dogma or the wishes of senior officials. Hong Kong is a small and open economy. We cannot turn back the global tide of change, but we can ride on the wave of change. Very often, entrepreneurs are more sensitive to business opportunities than government officials. What the Government should do is support them by, for example, allocating land, providing financial assistance, facilitating business matching and concluding economic agreements. The aim is to do what we can do best, as well as maximise our existing strengths.

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