Tea time: At a tea reception for the press, Financial Secretary Henry Tang said the Government will review its target of balancing the budget by 2006-07.

The Government will review its target of balancing the budget by the 2006-07 financial year and no new date has been fixed yet.

Financial Secretary Henry Tang said today the review will be conducted in a pragmatic and progressive manner.

He said he will consider views from all sectors of the community and take a realistic approach in setting a target on how to balance the books.

Mr Tang said, as a long-term target, his priority is to enhance the business environment, reduce unnecessary red tape and encourage foreign investment. Apart from a reasonable return, it is important to have a consistent policy in order to attract foreign investment.

He said, Hong Kong as an externally-oriented economy, cannot solve the problem of deflation itself.

Noting there are signs the external environment is improving, he is cautiously optimistic that our economy will perform better this year.

The closer economic partnership agreement with the Mainland makes Hong Kong even more attractive to investors. He said Hong Kong's economy has quickly rebounded after the SARS outbreak and the number of visitors has returned to pre-SARS levels.

He hoped it will help create a better atmosphere for the Government and the public to work together to improve the economy.

Mr Tang said the Government has formed an internal taskforce to study sales tax, adding that it has not come to any conclusions.

On the property market, he said he has yet to discuss the issue with Secretary for Housing, Planning & Lands Michael Suen, adding the 70% mortgage ceiling should not be seen as an obstacle to the rise of property values. He stressed that the Government should avoid intervening too much in the market.

Mr Tang said the Government has the determination to reduce the deficit, and he has no plan to amend the proposed tax increases announced in March and approved by the Legislative Council.

He said he has a good working relationship with the Chief Executive, and does not foresee any problem in this aspect of his new job.

He said Hong Kong has a good and efficient team of civil servants, and he will enhance communication with them as their support is essential in implementing policy.

Mr Tang said his new job is very challenging.

"I decided to accept the offer because I was impressed by the spirit of the Hong Kong people during the SARS outbreak. I noticed that Hong Kong people became more caring. It gave me the confidence to accept this challenge."