Optimising the Use of Public Resources

48. I am pleased to note that many people in the community have made clear their willingness to accept measures to raise revenue, including reasonable tax and fee increases. But they have also asked Government to cut its spending significantly. We will make full use of this opportunity to reduce the size of government, re-defining its responsibilities, reducing unnecessary intervention, streamlining and re-organising work procedures and departmental structures. We will also carefully review our social welfare policies, re-prioritise the provision of public services and give full play to market forces. In short, our moves to tackle the deficit problem will expedite the return to a small, lean government, which is more energetic, more sharply focused on its priorities, more efficient and better able to make optimum use of resources.

Joining Hands with the Community

49. I would like to stress that civil servants are not the cause of our fiscal deficit. Over the past few years they have made solid contributions to cutting Government expenditure. Under the Enhanced Productivity Programme, they have already been doing more with less, while assuring the quality of public services. With the serious fiscal deficit problem, civil servants have again responded positively and indicated their readiness to participate in achieving the expenditure cut of $20 billion. They are prepared to ride out the present difficulties with the rest of the community and accept a pay cut, if circumstances so require.

50. To achieve the goal of reducing expenditure, we plan to set an overall target of cutting the civil service establishment by 10% by 2006-2007 through natural wastage and normal retirement. That means the number of civil servants will drop to about 160 000. From 1 April this year, we will freeze civil service recruitment across the board. Only under exceptional circumstances and after careful scrutiny will approval be given for any external recruitment. Also, we will launch the second phase of the Voluntary Retirement Scheme. The details are being finalised and will be released as soon as possible.

51. We are keenly aware that the fiscal deficit problem is pressing and calls for quick resolution. The Government and civil service colleagues have already commenced consultations with the expectation of producing early results.