The appointment of Henry Tang Ying-yen as financial secretary and Ambrose Lee Siu-kwong as secretary for security marks the opportunity for a fresh start in managing Hong Kong's budget deficit and economic problems, as well as in legislating on the national security bill.

While both ministers have a constitutional duty to fulfil - for the financial secretary, that of balancing the books, and for the security secretary, legislation on Article 23 - both also need to listen to the people. Having professed its willingness to change its style of governance following the July 1 mass protest, the administration must live up to its promises. The two new ministers need only look back to their predecessors to see what they should not do, and look at history to know what is expected of them.

The plan to delay the target of balancing the budget by 2006-07 is a more realistic approach to handling the deficit problem. While balancing the budget is necessary to dispel doubts about the strength of the economy, the finance chief needs to tread a fine line between taxing fairly and raising revenue. The administration also needs to convince the public of its resolution to tackle wasteful spending within the bureaucracy to get the necessary support for its tax-rise proposals.

This tax-rise burden, which falls mainly on the middle class, needs to be reviewed. As I have previously argued in this column, the new system, effective from this financial year - which hits the lower-middle class hard, while not affecting higher-income groups - can hardly be regarded as fair. Instead of making the middle class bear the brunt of the problem, the administration should raise the profits-tax rate to 17.5 per cent for companies with annual profits of $10 million or more, and raise the standard salaries-tax rate to 17 per cent.

With the jobless figure hitting a new record of 8.7 per cent in July, and the underemployment rate reaching 4.2 per cent, the financial secretary should make resolving the unemployment problem his top priority. The young unemployed are especially in need of extra skills to help them get into the job market.

The Democratic Party had called for an industrial zone to be developed along the border. Mr Tang, in his previous capacity as secretary for commerce, industry and technology, set out strategies to develop Hong Kong's industrial base to provide value-added services and products. He should now speed up the plan. This may boost Hong Kong's manufacturing capabilities and create jobs for the unskilled and semi-skilled workers who have been hit hardest by the economic fallout.

As for Mr Lee, a sincere and genuine consultation on the national security bill is critical to building a societal consensus on the timing and content of the legislation. We believe that a white bill would provide an opportunity to produce a document that is more cohesive and complete, taking in the public's views. Mr Lee's assurance that there was no specific time frame for the legislation, as well as his pledge that the administration would listen to the public, may help allay fears. But the administration should conduct the consultation at a pace acceptable to the public and show its open-mindedness not just by listening, but by adopting the views of the public. If the administration is serious about wanting to restore confidence and credibility, now is the time for Chief Executive Tung Chee-hwa and his ministers to prove their willingness to change.

While the scheme to allow residents of some mainland provinces to visit Hong Kong as individual travellers will bring great economic benefits, Mr Lee should monitor closely criminal activities and the problem of overstaying to avoid large numbers of illegal workers. Otherwise, the economic benefits of a tourism boom will be lost.

The Tung administration has been eager to show that it will listen to the people, and the ministers' pledges are steps in the right direction. But the historic July 1 protest has shown that people will now accept nothing less than firm steps towards democracy. Cosmetic or piecemeal changes to the ministerial system will further alienate the public. Mr Tung must now contemplate genuine change by taking concrete steps towards democracy, while a political review should be conducted as early as possible.

YEUNG SUM

Chairman of the Democratic Party and a directly elected Legislative

Councillor

[South China Morning Post, August 28, 2003]