Financial Secretary John Tsang says he considered all factors and assessed the situation carefully before proposing initiatives to ensure the stability of the property market in his 2010-11 Budget.

Speaking at a press conference this afternoon, he said the Government will not introduce hasty and careless measures because the subject is a far-reaching issue which will affect both people who worry they cannot afford to buy flats and households which have already purchased homes. 

Taking questions: Financial Secretary John Tsang elaborates on his budget measures at a press conference and in a televised forum.

Prompt actions

The measures proposed in the budget send a clear message to the market the Government is watching the issue and is closely monitoring the situation.

He reiterated the Government will introduce measures promptly to cool the market if there are signs of a surge in speculation.

When asked if the Government will consider relaunching the Home Ownership Scheme, Mr Tsang said the Government's decision to stop building HOS flats was a major decision and it is not going to re-enter the market lightly.

On wealth redistribution, he said the Government plans to launch short-term measures to help people tackle their immediate needs. The proposal to reduce 75% of salaries tax and tax under personal assessment will alleviate low-income class' burden.

Anti-poverty measures

However, he said the long-term ways to improve people's livelihood is to improve the economy while the medium-term solution is to provide more education and training opportunities to help people get better jobs.

When asked why the Government failed to provide accurate estimates in the previous budget, he said he made the prediction based on real data but it was difficult to accurately predict the sudden surge in income from land sales and stamp duty.

Responding to questions on tax reform, Mr Tsang said the Government has no plan to change the system in the near future.

"We would like to keep the existing simple and low tax system, and we do not see any urgent need for major adjustment."

Fiscal matters

Mr Tsang said a bill proposing $500,000 deposit protection will be tabled in the current legislative year upon expiry of the full deposit guarantee at year's-end. The new plan will cover a majority of depositors' savings.

He added he is optimistic with the prospect of renminbi bonds and investment products in Hong Kong, noting the city will serve as a good testing ground for the development of the currency for the Mainland.

The budget has also proposed the abolition of duty-free concessions on tobacco products for incoming passengers. Mr Tsang said studies showed increasing tobacco duty is an effective means of tobacco control.