- Financial Secretary Paul Chan has somehow managed to handle a tough juggling act, acceding to demands for a cash handout while also seeing that struggling sectors have an opportunity to stay afloat
Desperate times call for desperate measures. Despite an array of immediate relief and long-term recovery initiatives, Financial Secretary Paul Chan Mo-po knew perfectly well that his fourth budget would have been a non-starter if he had not handed out an exceptional HK$10,000 (US$1,280) cash sweetener to every permanent resident of Hong Kong.
For a city battered by an escalating epidemic after prolonged civil unrest and the United States-China trade war, juggling fiscal prudence and an economic bailout was sadly a political reality faced by the finance minister.
So unanimous was the call for a cash handout this year that shunning it would have been political suicide.
The payout, the third since the city's return to Chinese sovereignty in 1997, must be the exception rather than the norm. With a staggering bill of HK$71 billion, a boost to the economy can be expected.
The budget deficit, however, will also shoot up to a record HK$139.1 billion. Whether the largesse can boost the government's flagging popularity remains to be seen. But taxpayers who take issue with the handling of the unrest and the coronavirus epidemic are probably unimpressed.
Despite four rounds of relief measures since last summer, Chan, to his credit, still managed to roll out more to secure jobs and ease the burden on individuals and businesses, such as a timely government-guaranteed low-interest loan. Those firms facing genuine difficulties should make good use of the support and put workers' interests first.
The safety net for the needy has also been cast wider. The spending would not have been possible without the robust reserves accumulated over the years. But with the deficit forecast to last until 2025, concerns of a structural deficit " when spending constantly outstrips revenue " are not unfounded.
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Public spending has, indeed, been spiralling as concessions and rebates become fixtures in the budget. Even though the reserves are still expected to stand at HK$937.1 billion after six years of budget deficits, the prevailing downturn underlines the need for prudence and vigilance.
With sentiment still at a low ebb amid a deepening health crisis, the budget would not be complete without showing greater support to the medical sector.
It is also good to learn that the need to put Hong Kong on a stronger footing for recovery and new growth has not been overlooked. From enhancing the financial services sector and expediting development of a green and smart city to stabilising property prices and boosting long-term housing supply, the finance chief is trying hard to instil hope and confidence in the future.
As he reminded the public with an earth tone colour for the cover of his budget blueprint, Hong Kong is a fertile piece of land. With hope and concerted efforts, we can emerge stronger, as we always have.
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