We start with the fact that our government and its statutory bodies have always been prudent in their finances. Our fiscal position has gone into deficit in bad times, but mostly it is in surplus and those accumulated surpluses have built up to fiscal savings that stood at a record HK$837.9 billion as of January.

That's billions, not millions, take note, and it gets better than that. The government's Exchange Fund, in which these savings are held, has invested this money well over time and sits on investment gains of HK$593.8 billion at present.

Put it together and we have public investment savings of HK$1.43 trillion. This works out to HK$201,000 per head for every man, woman and child of our population, or HK$606,000 per household. It wasn't a big thing for the government to return every one of us HK$6,000 last year. It is sitting on 33 times as much for every one of us.

And it's all our own money. These are savings attributable to the people of Hong Kong with no strings attached. All the other things that we expect the Exchange Fund to do, such as holding the backing for the banknote issue and being able to pay commercial banks for the government paper it has sold them, are already covered by other assets the fund holds.

So how much money do we really need in the Exchange Fund? There is one view that we should hold at least 12 months worth of total government expenditure. This comes to about HK$350 billion at present and is not even a quarter of what we have saved up.

We don't really need this cushion. The day that our government cannot have every banker within a thousand miles tumbling over himself to lend it money is the day that money won't be worth anything anyway. But let's say we want the cushion. What do we do with the more than HK$1 trillion we have left over?

Another school of thought says we need a lot of money saved up to beat off speculators in case there is ever again a run on the Hong Kong dollar as there was in 1998.

Leaving aside that this episode is now 14 years behind us, it misunderstands the mindset of speculators. Vultures don't feed on live meat. Speculators don't gang up on monetary regimes that play by the rules. Our danger is not pressure on the weak side of the peg but on the strong side, and for that you don't need currency backing. The speculators give it to you.

The question was once put to the International Monetary Fund, which spent a long time hemming and hawing and then said our fiscal savings should be 30 to 50 per cent of gross domestic product. The figure is 72 per cent at the moment.

But it also said that if we were more conservative in how we booked investment gains as government revenues, the required figure could be much lower. We made the recommended booking change. We have hugely more savings than the IMF says we need.

So what should we do with the money? Our government so far has consistently had one hugely innovative idea for it - Let's waste it. Let's throw it away on a bridge to Macau, which no one really wants or needs. Let's build a pointless second railway to the border to fit in with a high-speed railway system about which Beijing is having serious second thoughts. Let's gold-plate a third runway. Let's slather the New Territories in bridges, tunnels and roadways to nowhere.

Why waste breath on this? Whoever gets in will have to keep the ever-hungry functional constituencies fed. The money will be squandered.