Cash-rich financial chief must set out vision for a fairer Hong Kong
Paul Chan may have already dampened hopes of sweeteners in his budget, but funds should be used to address inequality, health and an ageing population
The financial secretary’s pre-budget ritual of managing expectations is not made easier by overflowing coffers. Paul Chan Mo-po has run into a growing clamour for cash handouts, prompted by news of a projected record annual surplus approaching HK$160 billion. He has, rightly, not encouraged hopes for sweeteners and made clear a preference for targeted relief measures and investment.
Chief Executive Carrie Lam Cheng Yuet-ngor has said the government needs “prudent financial management”, at the risk of echoing the past refrain of hoarding surpluses for a “rainy day”, resulting in fiscal reserves far in excess of reasonable provision for a crisis.
Meanwhile more than 1.3 million people are living below the poverty line of half the median household income and Hong Kong is woefully ill-prepared for the health and elderly care demands of a rapidly ageing population. In a city whose finances are the subject of global envy, this cannot continue. They have to be put to work for a fairer society and a competitive future as well as a rainy day.
The surplus is generated mainly by revenue from hot property and share markets, both unreliable sources of income from a narrow tax base that exacerbates a dangerous wealth gap rather than lifts people out of poverty. Instead of hoarding or squandering it, Chan needs to channel sentiment towards more visionary investment.
The budget has to tackle manifestations of a structural wealth gap, such as socially and economically wasteful educational inequality, and a health and aged care structure stressed by the current flu outbreak, let alone the unstoppable march of an ageing population.