BUDGET

Exco convenor urges government to scrap mass handouts in budget

Exco convenor says C.Y. Leung should boost his popularity by keeping election promises, not distributing sweeteners in next month's budget

PUBLISHED : Saturday, 25 January, 2014, 4:02am
UPDATED : Saturday, 25 January, 2014, 9:00am
 

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The government must "show political courage" and clamp down on handouts in next month's budget to ensure public finances remain on a sound footing, Chief Executive Leung Chun-ying's top adviser has urged.

Lam Woon-kwong, the first member of Leung's cabinet to publicly suggest reducing handouts, said the city's leader could only improve his popularity by delivering on his election pledges, which include reforming the Mandatory Provident Fund, free education for every child and retirement protection.

"We should scrap unreasonable handouts if we really care about the sustainability of public finances," Lam said, a week after a government source hinted there would be fewer sweeteners in the budget than has been the case in recent years.

The government's surplus for the current financial year - some of which was earmarked by Leung in his policy address this month to pay for measures to help the less well-off - is estimated to be between HK$10 billion and HK$20 billion, compared with HK$64.8 billion in the last financial year.

In recent years, the administration has offered several handouts to the public, including two rent-free months for public housing tenants, an extra allowance to people on social security, a partial waiver of property rates, and electricity subsidies for all households. Financial Secretary John Tsang Chun-wah offered a HK$33 billion package of one-off relief measures in last year's budget.

In an interview with the South China Morning Post, Lam said waiving public housing rents had created unreasonable expectations among tenants and the measure had further depleted the Housing Authority's coffers.

"The situation is so unreasonable that whenever rent waivers are not granted, public housing tenants would fire salvos against the government," he said.

Lam, the Executive Council convenor, added that the waiver of property rates, which would cost the government HK$11.6 billion this financial year, was also unfair on people who did not own their homes.

"The government lost billions in revenue by granting a rates waiver, but I doubt many property owners bother to say thank you to the administration," he said. Lam said it was also unreasonable to grant an electricity subsidy.

"Offering sweeteners is not the recipe for boosting popularity. [Former chief executive] Donald Tsang Yam-kuen dished out relief measures worth nearly HK$200 billion during his tenure but it didn't help raise his popularity," Lam said.

"The government should show political courage and scrap indiscriminate giveaways," he said. "Even if such sweeteners are offered, they should only be given to those really in need, such as elderly homeowners who have no regular income."

The billions of dollars promised to the poor in the policy address have sparked concerns over whether the government can afford the rising expenditure.

Lam did praise the chief executive for taking an important step to help the working poor by offering a low-income family allowance.

He said he hoped Leung would deliver on election pledges to abolish the mechanism by which employers offset long-service and severance pay against their contributions to employees' Mandatory Provident Fund accounts, as well as free education for every child for 15 years and a fund for the city's ageing population.

 

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