John Tsang must show he can spend wisely in budget

It looks likely that next week's budget will not taste as sweet as in previous years. In an apparent bid to dampen public appetite for more sweeteners, Financial Secretary John Tsang Chun-wah has given the clearest indication yet that the good old days of giveaways are history. As the economy stabilises, the time to cancel the concessions is near, he says.

While the economic outlook and the city's robust finances have put the government in a better position to reconsider spending priorities in the medium and longer term, the public needs to be convinced that public money is better spent elsewhere than returning it to their pocket.

For years, the financial secretary has played the role of Goddess of Fortune by dishing out an array of one-off relief measures such as bonus welfare payments, rate waivers, and rent and electricity subsidies. They were certainly timely relief measures in rainy days. But they have been regular features in the six previous budgets and a culture of dependence has been nurtured - the beneficiaries just take them as given. Just like bonuses at work, few would decline when given one. When the bonus becomes an annual reward, it may even become a legitimate expectation. In fact, goodies like special welfare payments and rent waivers risk becoming social benefits. Once given, they are difficult to take away.

Getting rid of relief measures is an unpopular move, even more so when the government does not seem to be in financial trouble. As the saying goes, if it ain't broke, don't fix it. That explains why Tsang is facing strong resistance to phasing out the sweeteners.

The concessions were introduced with a view to stimulating the sluggish economy and helping to tide over the needy during the downturn. The fiscal reserves have already shrunk by nearly HK$200 billion as a result over the past few years. With a stabilising economy, gradual withdrawal is not unreasonable.

The public have been rightly reminded by the finance chief that it was not long ago that the government was still struggling to restore a balanced budget. It is wise to save and invest in the future before the wheel of fortune turns again.

The chief executive's multibillion-dollar package to help the poor in his policy address last month has already fuelled the impression that the middle class has been left out. The public have to be satisfied that the money saved from the relief measures will be spent on more worthy causes. Tsang has to make a convincing case in his budget.