image

Hong Kong Budget 2018-2019

Hong Kong financial chief faces budget dilemma of those who lose out

Paul Chan, under fire for not giving out more goodies to the public, risks a legislative rebuke unless those overlooked enjoy some benefits

PUBLISHED : Wednesday, 07 March, 2018, 2:42am
UPDATED : Wednesday, 07 March, 2018, 2:42am

Managing public expectations before and after the budget has proved to be a challenge for the government. Pressured by aggressive politicians ahead of the Legislative Council by-elections on Sunday, Financial Secretary Paul Chan Mo-po has no choice but to try to dish out more goodies to the people or risk having his budget blocked by the legislature.

The scenario is not unfamiliar. In 2011, lawmakers from across the political spectrum successfully pushed the then finance chief John Tsang Chun-wah to top up his budget with a HK$6,000 cash handout for all adult permanent residents. With a near citywide ballot just a few days away, the pressure is even greater this year.

More needs to be done to help ease the city’s housing crunch

That is why Chan will explore further means to help those who have been left out in the budget, the so-called N-nothing class.

To his credit, the financial secretary has already come up with a raft of rebates and concessions to benefit as many people as possible. But they are still seen as insufficient by some. This is not helped when the reasons behind individual measures have not been conveyed to the people properly. If an opinion poll conducted last week is anything to go by, only 26 per cent of respondents were satisfied with the budget, the lowest rate in four years.

Given our fiscal reserves are at a staggering HK$1 trillion and the goodies involved are only worth less than half of the surplus this year, there is always room for the government to do more. The questions are who else is in need? And what is the best way to help?

Invest in Hong Kong’s future instead of giving us cash handouts

Members of the N-nothing class mentioned by politicians are convenient targets, although no one seems to have a precise definition of who they are. By nature, these people are difficult to identify. They are broadly seen as those who cannot benefit from any budget measures. The fact that they are not living in subsidised housing, getting tax breaks or receiving the dole makes it difficult for the government to help them.

For want of better options, the government has passed on the responsibility to the Community Care Fund. Set up by the previous administration a few years ago, it was supposed to identify gaps and incorporate them into standing services in the long run. Obviously some people still missed out. If officials are sincere about broadening the benefits in the budget, they need to go beyond the conventional means to identify the beneficiaries.

Having been in the job for more than a year, Chan should have better known the budget politics. Whether he can secure enough votes for the new government’s first fiscal blueprint depends on what else he can do. The political parties must not ask for the unrealistic to appease their voters.