Date
23 July 2018
Hong Kong's Financial Secretary Paul Chan is preparing to announce on Wednesday the government's budget proposals for the 2018-19 financial year. Photo: HKEJ
Hong Kong's Financial Secretary Paul Chan is preparing to announce on Wednesday the government's budget proposals for the 2018-19 financial year. Photo: HKEJ

Difficult to deliver a please-all budget, says Paul Chan

Financial Secretary Paul Chan Mo-po has made it clear that the administration wants to utilize the budget surplus to build up savings for the city’s future needs while also spending some of the money to offer relief to citizens in the immediate term.

In a blog post on Sunday, Chan, who will unveil on Wednesday the government’s budget proposals for the coming financial year, said administrators of public resources should always make sure that the money is used fairly and reasonably.

The financial chief said that based on his more than 40 consultations with various groups as to how the surplus cash should be used, he has realized that it will be difficult to please everyone no matter what measures he comes up with, the Hong Kong Economic Journal reports.

The remarks came amid a heated debate in society as to whether the government should use part of its massive surplus to give cash handouts to the public.

According to RTHK, the fiscal surplus could amount to as much as HK$140 billion.

Without mentioning whether he will announce cash handouts on Wednesday, Chan, who admitted the surplus this fiscal year will be more than that seen in the previous year, hinted that government will use some of the money to enhance the medical care system.

Hong Kong is facing the challenge of an aging population, and only a medical system enhanced by more supportive measures can ensure citizens will continue receiving high-quality medical services, the finance chief said.

In addition, Chan revealed that “care and sharing” will be a main theme of the coming budget plan, that is, assisting social groups in need to achieve the goal of supporting the disadvantaged and helping the children to make the society more harmonious.

In related news, Professor Francis Lui Ting-ming, adjunct economic professor at the Hong Kong University of Science and Technology, told a forum on Sunday that he favors a HK$5,000 to HK$6,000 cash handout to each citizen over increasing recurrent expenditures.

The surplus this fiscal year mainly comes from gains from the housing and stock markets, he said, noting that such gains are not stable in nature.

Former lawmaker Dr. Lau Siu-lai, who also attended the forum, said the government should take a two-pronged approach involving giving cash handouts to help with grassroots’ difficulties while increasing recurrent expenditures as part of long-term planning.

Labour Party chairman Steven Kwok Wing-kin, on the other hand, opposed cash handouts, saying the government should focus on improving the public livelihood through increasing recurrent expenditures.

The party also suggested measures such as setting up a universal retirement protection scheme, buying back the MTR, and using HK$30 billion to buy back idle farmlands for housing development.

Calling offering cash handouts “unhealthy”, lawmaker Michael Tien Puk-sun from the group Roundtable told a radio program on Sunday that the government may consider setting up a fund for its surplus so as to provide long-term capital for public services, as well as introducing new taxes with high predictability and low volatility, such as sales tax.

In its petition, the Middle Class Alliance called on the government to offer each citizen a cash handout of HK$10,000 as well as raise the salary earners’ allowances for their parents and children.

The Society for Community Organization, which holds the same stance, claimed that tax deduction is not as beneficial as cash handouts for grassroots families.

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TL/JC/RC

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