In his budget, Hong Kong’s finance chief John Tsang must find ways to invest in city’s future
One-off giveaways are all well and good, but with such a large surplus the government should be spending for city’s long-term benefit
Having crafted eight government budgets in a row, John Tsang Chun-wah is no doubt a safe pair of hands when it comes to public finances. But amid a bleak global economic outlook and an increasingly demanding public, the financial secretary is under growing pressure to deliver a budget that can address the needs of the people and steer Hong Kong through the uncertainties ahead. He needs to go beyond the conventional giveaways of the past years.
If the latest article on his blog is any guide, the finance chief has yet to show that he is thinking out of the box. Defending his “sweeteners” over the past years, Tsang said the relief measures had stimulated growth in times of economic woes.
The tone is apparently in line with news reports saying that although the upcoming budget would not be as sweet, some of the relief measures will be maintained.
Given the risk of dependence on such measures, a cutback on sweeteners is not unjustified. Indeed, the government has sensibly scaled back on such handouts over the past two years. But politically, Tsang cannot ignore the public clamour for goodies when the financial year is expected to end with tens of billions of dollars in surplus. With the Legislative Council election due in September, the demand from political parties to keep the relief measures this year is even stronger. Tsang will also be accused of ignoring the middle class again if he fails to roll out targeted measures for them tomorrow.
The red colour for the new budget booklet may have been chosen purely because of its auspicious connotation at the start of the Lunar New Year. But it also signals deficit in the context of finance. Although our public finances are nowhere near being in the red, it is also a reminder of the economic uncertainties ahead.
That makes a government budget with foresight all the more important. Instead of focusing on short-term relief measures to win public applause, the finance chief has to spend wisely. The public expects him to come up with more innovative ways to invest in a better future.
