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Chief Executive Donald Tsang addresses questions from legislators at a question and answer session at the Legislative Council in Hong Kong yesterday. Edmond Tang

HONG KONG: The chief executive yesterday announced the postponement of consultations on political reform for 2012 in order to give full attention to the present financial crisis. The decision pushes back discussions on political reform until the fourth quarter.

Speaking at a question and answer session at the Legislative Council, Donald Tsang predicted that economic conditions would turn bleak after the Lunar New Year. It is expected to be a time when companies are forced to cut back on staff or close altogether. He predicted more hard times in June, as graduating students face bleak job prospects amid rising unemployment. The unemployment rate for the last quarter is expected to go up to 4 percent from 3.8 percent, he said.

To avoid conflicts in the community, the government needs to focus on the financial crisis and re-prioritize policies scheduled for adoption this year, Tsang said.

Tsang announced in his last policy address, in October, that the government would begin public consultation on electoral reform for 2012 during the first half of the year. He told legislators, however, that revisions to the way in which the chief executive and legislators are chosen cannot be held as an urgent priority in the face of today's economy.

Tsang told lawmakers the government must assume the responsibility to postpone policies that are not urgent and related to the financial crisis.

"The community is concerned about economic and livelihood issues and cannot focus on discussion of the electoral method to be adopted three years after. Reform is an important topic that requires in-depth and objective discussion to reach consensus. This is not an ideal time to consult the public on that," he said.

He urged legislators and community members to be considerate toward the government.

"Hong Kong is also affected by the storm. We should not do anything that will polarize and create disputes in the community. We should not let the public be worried," he said.

Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung agreed it is appropriate that public consultations on electoral reform be postponed.

"The focus should be on the economy with the rising unemployment rate. The public can understand that," he said.

Liberal Party chairman Miriam Lau said the public still has enough time to discuss political reform if the consultation is kicked off in the fourth quarter.

But she said discussion on political reform and economic development can be held concurrently.

"The two issues are not in conflict. I hope the government will release its proposal soon for the public to discuss," she said.

In the question and answer session, Tsang predicted negative economic growth this year with a decline in export volume.

He hoped the business environment for small and medium enterprises (SMEs), which are on the edge of collapse, will improve after the Lunar New Year, when overseas firms start placing orders.

Some 1,200 applications involving HK$2.1 billion were approved under the HK$100 billion special loan scheme established to help SMEs.

The government will spend more than HK$29 billion in infrastructure projects for the next fiscal year, creating 10,000 jobs.

(HK Edition 01/16/2009 page1)