Expect little in next week’s Hong Kong budget – you will not be disappointed

Financial Secretary Paul Chan Mo-po likely to announce the government’s swimming in cash, unveil various mega projects, but also issue stern warnings about prudence and the need to keep cash in reserve for troubled times

PUBLISHED : Wednesday, 21 February, 2018, 10:09am
UPDATED : Thursday, 22 February, 2018, 1:10pm

The budget will be upon us less than a week from now; observing how it plays out sometimes feels like watching a spoilt child being given a toy that is far too big to be useful.

The loving parents have stacks of money but are far from sure what to do with it, so they think the best way of creating a good impression is to dish out a really showy gift. The child feigns delight but soon abandons the toy because it is pretty useless.

There are no prizes for guessing where I am going with this, because next Wednesday Paul Chan Mo-po, Hong Kong’s Financial Secretary, will proudly announce the government coffers are swimming in cash, far more than was expected. 

He is then likely to unveil various mega projects, issue stern warnings about prudence and the need to keep cash in reserve for troubled times ahead and come up with a clutch of new schemes dreamed up by his team of advisers who seem determined to produce the textbook on how best to waste public money.

In the last budget he trumpeted the achievement of a surplus that was some eight times more than forecast, a similar outcome is likely this year. The great mystery is how officials have the gall to present consistent revenue forecasting failures as somehow being a success.

Maybe it’s because all this money creates delusions of grandeur that are expressed by pouring oceans of cash into the kind of mega projects that soak up so much of it. In so doing, officials are behaving just like the rich parents with their big toy gifts.

In the last budget he trumpeted the achievement of a surplus that was some eight times more than forecast, a similar outcome is likely this year. The great mystery is how officials have the gall to present consistent revenue forecasting failures as somehow being a success

In some way the government is also in the gift business because officials love sucking up to Beijing by plunging into cross border projects such as the Bridge to Nowhere, also known as the Zhuhai-Macau-Hong Kong bridge, which is soaked in fatal injuries, mind boggling cost overruns and delays piled on delays. 

The truth about its minimal utility is slowly leaking out as we discover just how very little traffic it will carry and how many obstacles will face the dimwits who actually believed a bridge to Macau and Zhuhai meant they could leap in their cars and drive there. 

Then there’s the massive high speed railway project, festooned in delays and cost overruns, which will deliver passengers more speedily to the wrong part of Guangzhou, necessitating a laborious journey to parts of Guangdong’s capital that people actually need to reach.

And the consequences of the magic of Disney, a sucker’s deal for Hong Kong, are far from over as the gift that keeps on giving is still working just fine for the US company.

Mind you it’s not only these mega projects that are barking, think of all the other schemes that have been dreamed up by the government’s intelligence-challenged advisers. 

The daft food truck scheme, for example, is steadily imploding. And then there’s the schemes contained in last year’s budget: one allocated a wad cash for ‘thematic film shows and fashion shows’ to promote Hong Kong’s creative industries on the mainland. What happened to that? 

This year one of the government’s more aggressively dim-witted advisers has come up with an idea to help Hong Kong’s “struggling” property developers by proposing to subsidise home loans for first-time buyers, a wonderful way of boosting property prices under the cover of helping families to hop aboard the property train.

What almost certainly will not be addressed in this year’s budget are substantial ways of tackling the disgrace that leaves one in five people living below the poverty line. 

There will also be little comfort for those seeking to tackle education problems at primary and pre-primary levels because working in this crucial area is far less flashy than funding fancy research projects. 

And, as ever, little attention will be paid to the myriad of minor but vital projects that can make a real difference but are of little interest to bureaucrats heavily focused on their legacy projects.

Popularity-craving politicians want Chan to splash out on cash giveaways, and ideologues continue to obsess over the need for cutting taxes. But for once showing a modicum of good sense, the Financial Secretary has indicated he will not be doing any of this.

Lamentably, however, he has given no indication of having a real plan for using public money to make a real difference for Hong Kong’s underclass. Moreover, he has yet to tackle the problems faced by a business sector lumbering under a barely fit for purpose regime of petty regulations and other obstacles to commerce – the beauty of which would be to cut government spending and reduce costs for business. 

Expect very little on February 28 – you will not be disappointed.