Date
16 August 2017
Chief Executive Leung Chun-ying (left) and Financial Secretary John Tsang could be locked in a battle for control of Hong Kong's finances. Photo: HKEJ
Chief Executive Leung Chun-ying (left) and Financial Secretary John Tsang could be locked in a battle for control of Hong Kong's finances. Photo: HKEJ

Are CY Leung and John Tsang fighting for fiscal power?

Hong Kong government departments no longer have to compete for resources which will now be prioritized in the chief executive’s policy address.

The change was announced in an internal circular on Thursday in which the government said it is revamping the “Resource Allocation Exercise” rules for funding new public services and projects.   

It also said annual spending by all government departments will be slashed 1 percent for two years from 2016.

All this means Chief Executive Leung Chun-ying will have more power over government finances, sparking speculation he is in a fight for control of Hong Kong’s coffers with Financial Secretary John Tsang.

Also, it strengthens Leung’s hand in dealing with senior government officials, commentator Yau Ching-yuen said in an article on post852.com on Aug. 1.

Yau said Leung can re-allocate government savings to favored agencies and departments and that he is using spending cuts as an excuse to bolster his own fiscal authority.

But Tsang is not taking it lying down.

Just three days after the government announced the new rules, Tsang wrote on his web blog on Sunday that he has decided to stop handling applications for new spending due to lack of “new money”. Funds are already earmarked for high-priority projects, he said.

He encouraged government departments to review their existing projects and cancel unnecessary ones.

Tsang’s move was aimed at preventing Leung from controlling the “Resource Allocation Exercise” practice, Apple Daily said in a commentary Monday.

In the past two years, Leung has implemented a subsidy program for the elderly and low-income families, ramping up public spending by HK$6.2 billion (US$780 million) and HK$3 billion during that period, the newspaper said.

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