Carrie Lam prepared to reject previous government’s long-term fiscal strategy for Hong Kong

Chief executive also witnesses signing of deal for more cooperation between her government’s trade body and its Thai counterpart

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Carrie Lam has visited both Thailand and Singapore this week. Photo: K. Y. Cheng

Published: 5:15pm, 4 Aug 2017Updated: 1:25am, 5 Aug 2017

Chief Executive Carrie Lam Cheng Yuet-ngor on Friday said she was prepared to reject the long-term fiscal strategy for Hong Kong mapped out by the previous government as part of her new approach to make better use of the city’s massive surpluses.

The city’s leader said she was willing to revisit the fiscally prudent assumptions and recommendations of an expert committee convened by her former election rival and ex-finance minister John Tsang Chun-wah, which had warned that the city’s reserves would dry up in 20 years.

Making better use of the surpluses could include spending more generously on the elderly such as on ways to allow them to live in their own homes, rather than having them incur higher hospital bills.

Hong Kong leader Carrie Lam pledges to set up civil service training academy after visiting facility in Singapore

“It’s not a question of overturning the conclusion of the report,” Lam said, referring to the document submitted back in 2014 by the government’s Working Group on Long-Term Fiscal Planning.

“But that report is a piece of work on projections, based on certain assumptions. And I’m just telling you that those assumptions could be changed with a change in policy.”

The chief executive was speaking in Bangkok as she wrapped up a three-day trip to Singapore and Thailand. On Thursday, she backed an assertion by the city’s former central bank chief that the “miserly” fiscal policy of the past decade should be abandoned even if increased spending led to budget deficits.

Hong Kong’s Trade Development Council signed an agreement to deepen cooperation with Thailand’s Department of International Trade Promotion. Photo: K. Y. Cheng

Lam reiterated on Friday her determination to ramp up public spending, contrasting sharply with the conservative approach of the working group set up by Tsang in 2013. That group advised the government to tighten spending in anticipation of the first structural deficit emerging by 2022.

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