• Wed
  • Nov 26, 2014
  • Updated: 8:31am

Fiscal Cliff

The fiscal cliff involves US$600 billion in automatic tax hikes and spending cuts effective in early 2013 if US lawmakers fail to agree on reducing the budget deficit.

 

NewsHong Kong
POLITICS

Contingency plan on agenda for Hong Kong's 'fiscal cliff'

Senior officials will hold an emergency meeting on Thursday in an attempt to decide how to use the money that is left in the provisional fund

PUBLISHED : Tuesday, 14 May, 2013, 12:00am
UPDATED : Tuesday, 14 May, 2013, 5:37am
 

Senior officials from each of the government departments will gather on Thursday to come up with contingency plans for a "fiscal cliff" - a scenario described by Chief Executive Leung Chun-ying after filibustering blocked the passage of the budget bill.

A decision by Legislative Council president Jasper Tsang Yok-sing to halt the debate by today would ensure the bill was passed before Tuesday next week, but it would miss the government's self-imposed deadline of tomorrow.

Chief Secretary Carrie Lam Cheng Yuet-ngor yesterday said she acknowledged Tsang's decision, but warned that a failure to meet the deadline would affect "some public services and the cash flows of some departments".

On Thursday, Financial Secretary John Tsang Chun-wah will hold an emergency meeting with controlling officers from all government departments to set out plans on the use of money left in the provisional funding. The funding will run out at the end of the month.

A source close to the government said the decision by the Legco president had alleviated some pressure on the administration, but they would have to race against time once the appropriation bill was passed.

"We are facing an unprecedented situation," said the source. "In the past we needed at least two weeks to prepare for the bills to be gazetted. If the bill can be passed next week, we will see how we can stretch the processing time to finish the task before the end of the month."

The filibustering effort, launched by four radical pan-democratic lawmakers from People Power and the League of Social Democrats, was on day 10 yesterday. The lawmakers are demanding a universal cash handout of HK$10,000 and more consultation on the universal pension scheme.

Last Thursday, Leung said if the bill was not passed ahead of the deadline, Hong Kong would be facing a "fiscal cliff".

But that view was not shared by even some pro-establishment lawmakers.

Liberal Party honorary chairman James Tien Pei-chun yesterday said it was "irresponsible" and "untrue" for the government to say it would stop spending and that society would come to a halt if the bill could not be passed by the deadline.

The radical lawmakers also suggested that the government could apply for more provisional funding to avoid running out of money.

Marcellus Wong, senior adviser at PwC Hongkong - a multinational professional services and accountancy firm - agreed the government might experience some "short-term inconvenience" but did not think the danger of a "fiscal cliff" was imminent.

"It is not the end of the world," said Wong.

"But seeking more provisional funding is not the answer. It serves no purpose besides allowing more time for the opposition legislators to filibuster."

Dr Chung Kim-wah, an assistant professor at Polytechnic University's department of applied social studies, agreed.

He said: "More provisional funds can keep the government running. Civil servants can get paid. But there is no guarantee the relief measures announced in the budget can be carried out with the provisional funds."

Dr Chung believed the four legislators who launched the filibuster were feeling the pressure and had been seeking a face-saving way out. "They have said they would be willing to consider stopping if the government can show sincerity in considering their demands. But the government has stood firm. The Legislative Council president thus shoulders the political pressure to act on his own."

 

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

This article is now closed to comments

hard times !
this Old Hong Kong agrees with Dr.Chung that our four so-called radical lawmakers:Long Hair,Big Guy,Maddog and Chan Chi-kuen who launched the filibustering were feeling the pressure and had been seeking a face-saving way out. They claimed that they would consider the stopping of the filibustering if financial secretary,John Tsang can show sincerity towards their demands----concerning the poor elderly in town--a universal retirement assurance.Yet the government stood firm and never gave in even an inch ! So our respectable president of the Legco,Jasper Tsang had to shoulder the political pressure and blamed or scolded by pan-democarts for cutting off the filibustering.No wonder Long Hair patted Jasper's shoulders after the latter's decision with a smiling face !

Login

SCMP.com Account

or