Hong Kong budget: How sweet can the financial secretary be to business and ordinary punters?
There is considerable debate – even in government – about the wisdom of John Tsang still offering sweeteners in his budget
When Financial Secretary John Tsang Chun-wah delivers his ninth budget on Wednesday, he is expected to continue his tradition of dishing out billions of dollars in one-off funding measures.
These so-called sweeteners – one-off fiscal measures to mitigate the burden on ordinary people – are a hallmark of Tsang’s budgets, with about HK$270 billion distributed to particular sectors of the community in the form of tax relief and handouts over his past eight budgets.
READ MORE: ‘Don’t underestimate the 1 per cent’ – Tsang says budget handouts spur economic growth
Tsang has defended these giveaways as necessary to boost domestic consumption and help the less well-off cope during periods of economic slowdown, saying past relief measures and tax concessions have resulted in GDP growth of 1 per cent per year.
But his critics argue that overreliance on quick fixes is misguided and is usually politically motivated to pacify politicians and pressure groups, and comes at the expense of more lasting measures to redistribute wealth and develop Hong Kong’s economy.
According to sources, those concerned about doling out sweeteners this year even included Chief Executive Leung Chun-ying and Chief Secretary Carrie Lam Cheng Yuet-ngor. The lead-up to the budget apparently saw robust discussion, with Tsang pressing for a strategy to boost consumer power despite opposition from Leung and Lam.
Tsang maintains these one-off measures are more sustainable than long-term aid that Hong Kong would find hard to support in the future. Not spending that money and having it circulate in the economy is also a bad idea, he says.