Others have called for mass population screening for colon and breast cancer, a broadening of the elderly medical voucher scheme, and a transport subsidy for the disabled.

With Legislative Council elections just six months away, it comes as no surprise that political parties are compiling a lengthy wish list for the finance chief to consider. They argue that in times of robust economic growth, the financial secretary should make use of public funds to help those who have yet to benefit from that growth. They say the government can now afford to spend more to help the needy.

But when the economy was struggling a few years ago, the clamour for higher public spending was also loud. The government, critics argued, should spend more to stimulate the economy and help those affected most. So the government is under pressure to spend more regardless of the state of the economy.

In the 2007-08 financial year, the government budgeted for recurrent spending of up to HK$205.6 billion, with education taking the biggest share - about a quarter of the money. With social welfare, health and security added, more than 68 per cent of the spending is accounted for.

Democratic Party vice-chairman Sin Chung-kai said the government should not 'hand out goodies just for the sake of a hand out'. He feared that the economic recession brewing in the US would hit Hong Kong in the second half of this year and he urged the government to spend for a good cause.

High on the party wish list is a proposed 'old age reserve fund' to meet surging medical, welfare and related public expenditure that will come from an ageing population. Over the next two decades, the number of people aged 65 and over is expected to rise from 1 million to 2.6 million, accounting for about 26 per cent of the total population, according to research by the party.

The Democrats suggest injecting half of this year's budget surplus to create the fund, to be financed by part of the annual investment returns from the Exchange Fund, with resources now standing at HK$1.42 trillion.

'We think setting up a fund to ease the pressure on public spending is more meaningful,' Mr Sin said. 'We believe the fund would ease people's burden of contributing into the medical financing being studied by the government.'

His ally, Lee Cheuk-yan, of the Confederation of Trade Unions, said the finance chief should go beyond one-off measures to provide long-term aid for the needy.

'I wouldn't object to short-term or one-off measures. But they only provide a short-term stimulant effect. The government would be short-sighted if it failed to take into account long-term needs,' he said. 'The government has tightened spending during bad times. Now that the situation has improved, it should raise the spending to enhance services for the needy.'

Mr Lee is pushing for an extra HK$15 billion spending package, covering policy areas such as health, education and welfare. 'The Exchange Fund has reached a historic high of over HK$1.4 trillion. And we are going to have a budget surplus up to HK$100 billion.'

The Civic Party is calling for effective use of the bonus surplus to build a just and caring society by giving higher old-age allowances and spending more on health care.

Party legislator Ronny Tong Ka-wah said that although the financial secretary was being bombarded with proposals, there were really only two choices. 'Either he provides one-off tax rebates in return for public applause, or invests the money in long-term health care for future use,' he said.

Mr Tong said the best way to allow people to share in the bonus surplus would be by investing in a good health-care system rather than returning the money to taxpayers. 'Everyone can get old and sick one day. A better health-care system will benefit everyone. I really hope the finance chief can lay down a long-term blueprint for Hong Kong instead of just giving patchy handouts here and there.'

The government-friendly Democratic Alliance for the Betterment and Progress of Hong Kong has gone even further, bombarding the financial secretary with a HK$6.5 billion spending spree request that would benefit elderly, youngsters and people on the dole.

It is calling for a new means-tested 'elderly living subsidy' of HK$1,200 per month for people aged 60 and over, as well as increasing the monthly old-age allowance - already dubbed 'fruit money' because of its modest amount.

The party is also pushing for a universal dental heath-care scheme for the elderly, similar to the one for primary students at present. Free inoculation against cervical cancer should also be provided to girls aged 12 by the health authorities.

DAB legislator Chan Kam-lam said the party package, together with tax concessions proposals, would cost about HK$24 to $30 billion, about a quarter of the surplus.

'About half of the proposals are just one-off measures. This is something the government can afford. Given resources are now abundant, the government can spend more to help raise public support and its popularity,' he said.

The business-affiliated Liberal Party is pushing for increases in fruit money to HK$1,000. In addition, it also wants to revive the home purchase loan scheme, which would provide a HK$600,000 loan for each of the 3,000 eligible first-time buyers each year.

'Now that the treasury has been flooded with money, there is no reason why the scale of tax rebates would be smaller than last year,' said Liberal vice-chairwoman Miriam Lau Kin-yee. 'The exceptional surplus this year has brought an exceptional challenge to our financial secretary. And I hope he would give us an exceptionally big lai see for Lunar New Year.'

If Mr Tsang, affectionately known to some Chinese as the 'god of wealth' for his finance portfolio, were to accept just the spending initiatives raised by major political parties, it would already cost nearly HK$70 billion. The proposed revenue concessions would cost even more.

Such a move would be a dangerous step back to the 1990s when spiralling public spending worried Chinese officials who were closely monitoring government finances before the handover. Chen Zuo'er, the then budget team chief negotiator, warned in 1995 that welfare spending growth was like a Formula One racing car that might eventually 'crash and kill the 6 million Hong Kong people on board'.

Indeed, increases in social welfare spending after the handover do not seem to have slowed down. According to the government, social welfare expenditure has surged in the past decade, outstripping the average 30 per cent growth in general recurrent government spending during the period.

Basic Law article 107 states that Hong Kong shall follow the principle of keeping expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its gross domestic product. The spending growth understandably stoked growing concerns about a series of persistent budget deficits from 1998 to 2004.

It was not until three years ago (2005-06) that the government managed to restore a balanced budget. Naturally, the bigger the spending spree, the more difficult it is to curtail that level of spending when it is no longer affordable. The tough measures to bring down public expenditure, such as civil service pay cuts, a reduction in headcounts, and compulsory spending cuts across departments, are still painful memories.

A government source said the financial secretary would not adopt the parties' call for a specific fund for the ageing population.

'We have seriously considered that. But the point is setting up a purpose-built fund is not very different from putting the money in the fiscal reserves for future use. When we need to spend more for health care, we can draw money from the reserves. The flexibility is greater,' the source said.

'But we understand public concerns over the future burden. We would show our commitment that we are ready to put more resources in health care should the need arise in future.'

City University management sciences associate professor Chan Yan-chong warned that it was time to save for rainy days rather than embark on another spending spree.

'It's hard to say if the impact brought by US recession would be more severe than the Sars outbreak in 2003. But the impact should not be underestimated,' he said.

Echoing calls for one-off sweeteners in the budget, the academic said the public should learn a lesson from the fiscal trauma of past years. 'It's time the people of Hong Kong learned to adjust their expectations on the coming budget.'

Big spending

Education HK$50.1b

Social welfare (CSSA/SSA) HK$25.7b

Social welfare (other welfare expenditure) HK$10.3b

Health HK$30.5b

Security HK$24b

Support HK$29.4b

Infrastructure HK$11.4b

Environment and food HK$8.7b

Economic HK$8b

Community and external affairs HK$7.3b

Housing HK$200m

SOURCE: FINANCIAL SECRETARY?S OFFICE