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  • Jul 31, 2014
  • Updated: 6:07am
CommentInsight & Opinion

Middle class are looking to John Tsang to deliver help in budget

PUBLISHED : Saturday, 08 February, 2014, 5:06am
UPDATED : Saturday, 08 February, 2014, 5:06am

John Tsang Chun-wah must be feeling the heat as budget day draws near. Having been the financial secretary for nearly seven years, he knows perfectly well how to manage one of the world's most-envied economies. But the pressure arising from the budget this year is particularly strong in that it comes after the chief executive has rolled out a raft of measures to help the poor in his policy address. The multibillion-dollar package has not only left little leeway for Tsang to manoeuvre, it has also prompted the middle class to ask for its fair share from the government. The finance chief has to respond carefully lest relations with this social strata will be damaged further.

How Tsang rises to the challenge will continue to be the focus in the run-up to February 26, when he gives his seventh budget speech to the Legislative Council. Bombarded by a plethora of tax relief and spending proposals from different sectors in society, he has sought to dampen hopes of another giveaway budget. If recent media reports are any reference, the budget surplus in the current financial year is likely to be lower than last year's. Unlike the numerous one-off sweeteners in previous budgets, taxpayers can expect fewer goodies this year.

Managing public expectations is as challenging as managing public finances. As part of the strategy, it is understandable for the finance minister to talk down expectations at this stage. But politically, Tsang knows very well that he cannot walk away without providing some targeted initiatives for the middle class. He was accused of ignoring their needs when he delivered the first budget of the new government last year. As the public finances are in good shape and economic growth robust, the government is in a position to do more. It would hardly be acceptable if the middle class was left out again.

The middle class may not wield strong political influence like the rich and powerful; nor are they as vocal as the grass roots in clamouring for handouts and subsidies. But this silent majority is pivotal to social and political stability. No government can afford to lose their support.

Chief Executive Leung Chun-ying rightly said that what the middle class needed was a good living environment to achieve their goals. That means the government should redouble its efforts to improve education, health care and the environment. But Leung is only half right. The middle class is also weighed down by heavy tax bills, property mortgage payments and other spending priorities. They look to the government for measures that could help relieve their burden.

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omnimus
Tax burden in HK? What a over-statement that is! I came from the UK and people their are subjected to over 30+% income tax.
I haves worked in HK for 20 years now. I think HK's burden is rooted in high property prices, not taxation. This in turn cause rents or mortgage payments to take up a large portion of ones income.
But honestly, what can the government do? People complain if the government set policies to lower the property prices. On the other hand, people also complain if the government let the property prices rise as it did in the past. I think Hongkongers need to ask themselves what they really want: be able to make a lot of money in the short term or compromise for a better future - not just themselves but one that is will also benefit future generations.
I hope more Hongkongers realizes if the overall fundamentals that made HK a successful place, then they life will improve. It's a bit like running a company: if staff from all levels work together, the company grows, make money, then the company can raise salary, which in turn will improve everyone's livelihood.
rpasea
The middle class is "weighed down by heavy tax bills"? Really? The best thing JT can offer is his resignation so we can get a capable FS who can put together a realistic budget.
keresearch
"John Tsang Chun-wah must be feeling the heat as budget day draws near. Having been the financial secretary for nearly seven years, he knows perfectly well how to manage one of the world's most-envied economies"
Pardon - most would say he is clueless - in addition to which it is not his job to "manage the economy".
johnyuan
Middle class, world over is a silent majority. The claim albeit few articles penned by politically motivated individuals in SCMP speaking of the middle class in wanting sweeteners from government in the context the poor gets theirs, if taken as truth would be stretching their imagination a bit. I don’t mind if any of these writer including this editorial can make some outside the box thinking to deal with tax burden by the middle class. I would like to hear it if the scheme even has to ask help from the inapt Financial Secretary. Having said that, still it is more efficient to run Hong Kong if the government runs with a single voice.
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So CY Leung, act your part as the Chief and instruct your Financial Secretary what to say in his speech perfunctory as it may for this time of the year. You will have to explain if your FS would inform the public anything that contradicts with your earlier speech otherwise.
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PS SCMP editor:
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Your caption is mindlessly and carelessly divisive -- are you suggesting the middle class for FS and the poor for CE? Don't we have one government and the FS work under the CE? Just educate me if it is not.

johnyuan
Bernard Chan’s claim that in part middle class is ‘with enough income to cover basic needs’, needs to be quantified.
I believe most of the middle class in Hong Kong needs two incomes to cover basic needs because of high accommodation cost in rent or ownership of property. For those who are holding property as their future retirement nest is more to be interested that there would be a continuing rise in property value. This middle class is most sensitive to property market by and large opposes any policy change that affects adversely to property value. Unaffordable housing is not a concern but on the contrary is welcome since it makes flats worth even more. The middle class is very much trapped in this property dependent way to live. Some, probably most must depend on two incomes to be in the property game hopefully to come ahead financially one day. Such hope has provided them the strength to be indentured workers for their employers at their work toiling with long hours and weeks.
johnyuan
It is this life that the middle class is subject to daily. It is this that the government must undo the bondage of property and work from living a normal life. I don’t think the middle class is upset that the working poor finally get attention from the government with proposed help. The middle class knows that few hundreds of dollars for the working poor if apply to them they wouldn’t make a dent but still they must all be bonded to their workplace in the same way.
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I will advise CY Leung to delink property from government’s means of revenue. Make an outside the box tax system. Use the trillions of reserve to rebate the middle class in paying off some of their mortgage so they can be free from the property bondage. This is the sweetener that would make a difference for the middle class.
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