Budget solutions
It is difficult to make sense of the stream of leaked policy possibilities and incomplete budget numbers emanating from the government. The tendency to play hide and seek with income and expenditure estimates by shifting money between different funds, rather than actually spending it, has long been part of the budget process. Without a better idea of this year's final outcome, and the impact of recession on 2009-10 revenues, it is hard to attach specific figures to policy recommendations. However, there are some general principles that must be applied to achieve the twin goals of stimulating the economy in the immediate term without undermining Hong Kong's longer-term fiscal health.
First, though, it is worth commenting on the 'let them eat cake' attitudes of the senior officials - Chief Executive Donald Tsang Yam-kuen, Chief Secretary Henry Tang Ying-yen and Financial Secretary John Tsang Chun-wah. Hong Kong people are being urged by them to go out and spend more money to ward off recession. It is the height of arrogance by officials who either inherited billions or have the luxury of inflation-proof civil service pensions linked to their final salary. Few in the private sector enjoy such benefits. It apparently means nothing to these officials that the mass of Hong Kong savers, who must take care of their own old age, have seen a steep fall in the value of their pensions and/or face near-zero interest on their bank deposits - or that perhaps 5 per cent of the population will lose their livelihoods as unemployment spikes.