- The job of the financial secretary should not be to keep the government wealthy, but to make people better off
Bad habits die hard. Financial Secretary Paul Chan Mo-po has expressed worries about recurrent funding for new measures aimed at helping the elderly and low-income groups.
As a result, he hinted that his upcoming budget may not be as generous with one-off relief measures such as handing out cash to everyone. You know, budget deficits and all that blah blah blah. What you give with one hand, you have to take some back with the other.
But what are the numbers he is looking at? About HK$10 billion for 10 welfare initiatives. Big deal!
Financial secretary hints at scaling back relief measures amid concerns over costs
That's about how much the government is going to hand over to Ocean Park to bail out the financially strapped theme park. The new measures include extra financial commitments to subsidising old people and low-income groups for their public transport costs, Mandatory Provident Fund contributions and rents, as well as adding new public holidays.
There are a number of factors that Chan should consider first. Not all the new initiatives will become permanent funding fixtures as some of them " such as rent subsidies for low-income families queuing for public housing " may be revised or phased out after time.
The job of the city's financial secretary seems to involve constantly scaring people about long-term recurrent public spending and structural deficits " by offering consistently bad estimates.
Yes, there will be a budget deficit of about HK$80 billion, the first in 15 years. But historically, the city's economy has recovered quickly after a crisis, including the 1998 Asian financial crisis and the 2003 severe acute respiratory syndrome (Sars) outbreak. Maybe this time is different, and Hong Kong is going downhill all the way while incurring recurrent or structural deficits for the first time.
Financial Armageddon is always a possibility, though I would rather bet on a reasonable economic recovery.
As for Chan's complaint about projected falling land sales, that's just disingenuous. Such revenue, even when it's filled to the brim, goes into an infrastructure development fund, rather than other funding purposes.
Even in a bad case scenario, the government is sitting on HK$1.2 trillion in reserves, not counting other valuable assets. That's the result of 15 years of uninterrupted surpluses, which can and should be used for a rainy day. In case Chan hasn't noticed, the city has been on fire. Mr Chan, your job is not to keep the government wealthy, but to make the people less poor.
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