Financial Secretary John Tsang Chun-wah's fifth and final budget of the current-term Hong Kong government was a model of fiscal design, the envy of most governments.
Which government around the world can boast a surplus of HK$66.7billion, against a forecast deficit for this fiscal year of HK$8.5 billion, amid a year of crisis in Europe and global slowdown?
Which government indeed (perhaps with the exception of Singapore) can claim fiscal and foreign-exchange reserves equivalent to 35per cent of gross domestic product or 22 months of government expenditure?
And which government can claim to have pure government debt (excluding statutory body debt) of less than 2per cent of GDP?
Ministers of finance in Europe who are struggling with their debt crises can only shake their heads at the ability of Hong Kong to increase tax allowances, cut property taxes and waive some profits tax. All these goodies, and the forecast deficit for next year is (only) HK$3.4billion. We should nominate Tsang for the post of commissioner for fiscal reform in Europe.
The financial secretary is correct to warn about potential shocks from global crises. Growth in real terms in 2012 is forecast at 1-3per cent, but the medium-term average (2013 to 2016) is projected at 4per cent.
