HONG KONG, Feb. 28 -- Henry Tang, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government, on Wednesday unveiled a package of budget measures designed to " share the fruits of economic prosperity with the community" and support Hong Kong's ongoing economic development and job creation.

The centerpiece of the budget is a 20 billion HK dollars (2.6 billion U.S. dollars) package of tax concessions and other one-off relief measures including 4.9 billion HK dollars cuts in salaries tax, 250 million HK dollars reduction in stamp duty on property transactions, 8.1 billion HK dollars in salaries tax rebate, 5.2 billion HK dollars in rates waiver and 1.5 billion HK dollars in additional social security payments.

"Revitalizing the economy, promoting employment and improving people's livelihood have been my consistent policy objectives over the years since I became financial secretary," said Tang when presenting the 2007-2008 budget to the Legislative Council.

"They are also my guiding principles in formulating the 2007 08budget. I believe that our economic development over the past few years confirms that they are on the right track," he said.

The financial secretary will also allocate about 900 million HK dollars to provide additional assistance to the disadvantaged.

Other major initiatives to promote the economy and employment include 3.1 billion HK dollars to upgrade air traffic control facilities and build a new Civil Aviation Department headquarters at the airport.

The initiatives also include reducing by half the duty rates on wine, beer and other drinks containing not more than 30 percent of alcohol, costing the revenue 350 million HK dollars a year; 300 million HK dollars to help finance film production and overcome the shortage of film talent; 210 million HK dollars to install WiFi networks enabling free Internet access by the public in government facilities such as libraries, parks and community halls.

Tang said the government's fiscal position had markedly improved as a result of the strong economic recovery.

He forecast a consolidated surplus of 55.1 billion HK dollars for 2006-07, much higher than the original forecast.

"Due to our economy's better-than-expected performance over the past 12 months," he said, "investment income and revenue from land premiums, stamp duty, profits tax and salaries tax alone are about 31 billion HK dollars higher than the original estimates."

Tang revealed that GDP grew by 6.8 percent in 2006, significantly higher than the four to five percent forecast by the market and the government earlier that year.

GDP growth for 2007 is forecast at 4.5 to 5.5 percent, with a trend growth rate of 4.5 percent a year from 2008 to 2011, he said.

Total government expenditure for 2007-08 will be 248.4 billion HK dollars, up 2.8 billion HK dollars, or 1.1 percent, from the 2006-07 original estimates. Education, social welfare, health and security will account for over 60 percent of the total expenditure.

Tang revealed that to complement the creation of new posts to implement various policy initiatives and to pre-empt possible succession problems arising in the civil service, the government would resume open recruitment of civil servants from the next financial year.

He pledged to maintain strict fiscal discipline and manage public finances prudently.

Tang said the government would continue to earmark 29 billion HK dollars a year, on average, for infrastructure projects over the next few years.

He said major projects coming on-line in the next financial year, such as the Tamar development, improvement works for the 2009 East Asian Games sports facilities, and water mains replacement and drainage works in various districts, would create about 23, 000 jobs for the construction industry.

An operating surplus of 7.2 billion HK dollars and a consolidated surplus of 25.4 billion HK dollars are forecast for 2007-08.

The financial secretary said Hong Kong's economy had staged a strong recovery since mid-2003, when the city was in the doldrums following the SARS outbreak.

He said employment was now at a record 3.5 million, 310,000 more than in 2003. Unemployment had fallen from a peak of 8.5 percent in mid-2003 to a six-year low of 4.4 percent.

Total retail sales were up by 23 percent since 2003; overall investment grew by eight percent in 2006, the biggest rise since 2000; stock market capitalization as at mid-February 2007 was 300 percent higher than in 2003; visitor arrivals topped 25 million in2006, up 60 percent over 2003; and negative equity cases had dropped from more than 100,000 to 8,400 by the end of 2006.

Tang said that when he took over as financial secretary in August 2003, he needed to address the government's serious deficit problem and restore the health of public finances.

He said that due to the combined efforts of the government and the entire community, the fiscal targets had been achieved in 2005-06, three years ahead of schedule.

As a result, operating expenditure had been reduced to below 200 billion HK dollars, fiscal balance had been restored in both the Operating and Consolidated Accounts, and public expenditure had been reduced to below 20 percent of GDP.

Tang said Hong Kong's ability to undergo continuous economic restructuring was a key element underpinning its competitiveness, and its economic integration with the mainland was pivotal to Hong Kong's future development.

"Hong Kong's restructuring should complement the economic development of the mainland and create a 'win-win' situation," he said.

To sustain future economic development and creation of jobs by the market, Tang pledged to continue to promote the development of the financial services sector, to enhance the competitiveness of the trade and logistics industry and to continue to promote the development of tourism infrastructure.

He said the government will continue to improve business environment through removing barriers, promoting fair competition, nurturing and attracting talent, supporting scientific and technological research, and encouraging innovation and creativity.