Land sales and stamp duty push up city's revenue

Not my intention to underestimate revenue, says finance chief as he gives reasons for surplus

PUBLISHED : Monday, 04 February, 2013, 12:00am
UPDATED : Thursday, 07 May, 2015, 12:48pm

The finance chief has denied any intention to underestimate government revenue after a HK$40 billion surplus was recorded for the first three quarters of the 2012-13 financial year instead of a deficit he had earlier estimated.

On his blog yesterday, Financial Secretary John Tsang Chun-wah said he was always being asked by friends whether he intentionally underestimated revenue to restrict growth in government expenditure.

"I always ask them to look at the numbers first," wrote Tsang.

"Over the 15 years since the handover, the government's recurrent expenditure has grown by 77 per cent. That is higher than the economic growth and the accumulated inflation rate during this period."

He stressed that the government had never been "stingy" in supporting its policies.

Tsang's remarks come on the back of last week's announcement that Hong Kong had recorded a surplus of HK$40 billion for the first nine months of the financial year.

In his budget speech in February last year, Tsang estimated that the government would record a HK$3.4 billion deficit for the fiscal year.

Civic Party lawmaker Ronny Tong Ka-wah said last week that the government's budget balance was usually underestimated, suggesting that it was a "deliberate" move to create a grim outlook and thus dampen the property market.

But Tsang explained in his blog yesterday that the HK$40 billion surplus so far had been a result of the government's land sale. The revenue from selling land turned out to be higher than expected, he said.

Another reason Tsang wrote, was the hot money, or flow of investment funds from overseas, coming into the city.

An active stock market meant an increase in stamp duty revenue, he said.

As more people in Hong Kong retire, the strength of the city's labour force will continue to decrease, Tsang wrote.

"We need to think about how to maintain our economic dynamics, and how to maintain the sustainability of our public finance," he said.

Tsang also labelled as a "ridiculous mindset" Japanese finance minister Taro Aso's remark last month that the country's elderly should "hurry up and die" to help ease taxpayers' burden in caring for them.

Aso's comment does nothing to help improve Japan's ageing population problem, he said.

Tsang will deliver his budget for the next financial year at the end of the month.