The better-than-expected revenues this year, according to Chan, are attributed to land and property sales, an unstable source of income. It would be wrong for the government to assume that a bullish property market will prevail all the time.

Indeed, our robust finance belies the problems facing the city – a narrow tax base, spiralling public expenditure, widening wealth gap, a fast ageing population and a volatile economy in need of new growth.

The finance chief must therefore resist the temptation of delivering a giveaway budget as in the case of his predecessor, John Tsang Chun-wah. He should instead make good use of the surplus to invest in a better future. This means continuous spending on the innovation and research front, getting prepared for the burden and opportunities arising from our ageing population and addressing the imbalance between the haves and have nots in society.

Last year, Chan opted for a steady-as-it-goes approach for his first budget, which was also the last for the outgoing administration. Now that a new government is in power and another huge surplus is looming, the public is expected to be more demanding.

It is imperative for Chan to articulate long-term visions and strategies for the city to stay ahead in a competitive global environment. He is also under pressure to instil feel-good sentiments by dishing out sweeteners of all sorts. Whether he can satisfy an increasingly demanding public while adhering to fiscal prudence and lead Hong Kong to a brighter future will be a major test.