Finance chief to loosen public purse-strings
Financial Secretary John Tsang Chun-wah said yesterday that he expects public spending to increase in the coming years, but warned that policymakers must take care to make sure increases do not get out of control.
Tsang told Commercial Radio Hong Kong that policy planners needed to be cautious about the repercussions of continual budget rises even through social changes would require more expenditure in areas such as education, housing and social welfare.
'Money cannot solve all the problems,' said Tsang, a holdover from the administration of former chief executive Donald Tsang Yam-kuen. 'We should have incremental increases of an appropriate level and strike a balance.'
Chief Executive Leung Chun-ying has vowed to improve the livelihoods of residents by narrowing the gap between rich and poor and giving more subsidies to the elderly. For instance, he has proposed to dramatically increase allowances for the elderly.
Tsang was tight-lipped about whether an announcement was forthcoming on a plan to increase the old-age allowance by 100 per cent or more, as some have suggested.
He said he would soon start consultations with interested parties to begin crafting the government's next budget.
He said policies such as any changes to old age allowance would be announced when the time was right. The financial secretary reiterated that there may be a need to revise the government's forecast for economic growth this year of 1 per cent to 3 per cent.
Tsang said the government would strive to maintain stability in the financial markets in the face of the global economic uncertainty. Over the past six months, authorities had seen no irregular money flows or trading patterns, he said.
He also said that the government would look at how to diversify the economy to maintain long-term growth in output.