Future fund could create 'white elephants', lawmaker warns Tsang

Proposed fund would pay for infrastructure during times of deficit, but some lawmakers say money would be better spent on elderly

PUBLISHED : Thursday, 27 February, 2014, 2:37pm
UPDATED : Thursday, 27 February, 2014, 5:13pm

Lawmakers have questioned the use of a “future fund” for infrastructure projects – as outlined in John Tsang Chun-wah’s budget speech yesterday – with one fearing it could be used to create “white elephants”.

Unionist lawmakers from both pan-democratic and government-friendly camps raised concerns over the proposed fund, which is designed to pay for infrastructure in years where there is a budget deficit.

The proposed fund was put forward by the Working Group on Long-Term Fiscal Planning, which had warned the government could face a structural deficit within as few as seven years.

It would consist of the Land Fund, which has HK$219.7 billion in land revenue from pre-handover years, and a portion of future surpluses.

Labour Party lawmaker Cyd Ho Sau-lan doubted the need for more infrastructure amid an ageing population.

“You would easily create white elephants if you build too many infrastructure projects,” said the pan-democratic lawmaker. “This government would rather spend its money on bricks instead of the people.”

Pro-government lawmaker Wong Kwok-kin, of the Federation of Trade Unions, asked the financial chief why the money wasn’t being used to prepare the city for the challenges brought by its ageing population.

“The government should launch a pension scheme instead,” said Wong.

But Tsang said infrastructure projects were one way of preparing for an ageing population.

“These projects are not only bridges and railways, but hospitals and elderly homes,” said the financial chief.

He noted that the future fund was still only a proposal that the working group had put to the government to consider.

“The group will provide more details of the fund next Monday,” said Tsang.