Looking ahead: Chief Executive Tung Chee Hwa said that to ensure a smooth transition, a pragmatic and progressive approach should be adopted for implementing proposed education reforms.

The proposed new "3+3+4" academic structure for secondary schools and tertiary institutes will help improve the quality of education.

As the reform will have far-reaching implications, it should be implemented in a pragmatic and progressive way.

This was the message from Chief Executive Tung Chee Hwa, addressing the Report Session on the Progress of Education Reform.

The reform should neither cause abrupt changes to the general structure of secondary education, nor should it depart from the reforms in curriculum and assessment mechanisms that are being implemented, he said.

To ensure a smooth transition, tertiary institutes, secondary schools and the Government should deliberate over the proposals to seek consensus as reforms in the two education levels should support each other.

Mr Tung also noted that Hong Kong must improve people's education level in view of the economic restructuring.

In this regard, tertiary education will be expanded to allow 60% of senior secondary school leavers to receive tertiary education by 2010. Funding will be provided to increase tertiary education places between 2005 and 2008, providing avenues of further study for eligible students.

Despite the fact that the Government is facing a serious fiscal deficit, education will always be a long-term investment for the community, he said. We will continue to invest resources wherever we see urgent need. What matters most is that resources must be used in the best way to yield the best results.

"We should develop a pool of talent - young people who 'have a foothold in Hong Kong, the whole country in mind and the whole world in view'. They should also have knowledge, integrity, and the right aptitude and attitude for lifelong learning," Mr Tung said.

"Education provides the ladder for upward social mobility, offering equal opportunity for everyone to make a better life and to make Hong Kong a cultured metropolis."

Funding on education this year has increased 11.2% in real terms compared with last year. Education spending has risen from $38 billion six years ago to $61 billion this year, an accumulative increase of 67% and an average annual growth of 8%.