Paul Chan spreads some Hong Kong budget cheer – let’s hope it can last
With a record surplus of HK$138 billion, the financial secretary has given a little bit to everyone, but whether it will help society as a whole is a different matter
With the latest budget, you can’t say the current administration hasn’t learned from past mistakes. It has come up with a new fiscal narrative, though the difference from previous budgets appears to be one of style rather than substance.
The “new” fiscal rhetoric, as finance chief Paul Chan Mo-po puts it, is to “optimise the use of surplus … to relieve our people’s burdens … and respond to community aspirations promptly and effectively”.
At least Chan has done away in his budget speech with “the need for [financial] prudence”, the favourite but trite phrase of his predecessor John Tsang Chun-wah.
For good measure, Chan said he agreed “entirely” with this view of his boss Carrie Lam Cheng Yuet-ngor, a reference, no doubt, to disagreements between Tsang and former chief executive Leung Chun-ying over government spending when the two men were in office. He even projects fiscal surpluses for the next five years.
That’s not something you ever heard from Tsang.
But there is very little that is new in Chan’s self-styled “new fiscal philosophy”. What is actually new is the record surplus of HK$138 billion, of which the finance secretary is giving back about 40 per cent to the community in immediate benefits. Percentage wise, though, Tsang had given back as much “sweeteners” previously.
In a recent blog post, Chan wrote it was impossible to please everyone. This hasn’t stopped him from trying with his latest budget. He certainly has a large enough pot to give a bit to everyone.
Cutting salaries and profits taxes by 75 per cent for one year, subject to a HK$30,000 limit; waiving property rates for one year; handing out two extra months of major social welfare benefits; waiving fees for a public examination, along with a long list of other benefits – the idea is that whether you are wealthy, middle class or low income, you and your family will get something.
There is also an extra recurrent HK$2 billion for education and an increase of more than 13 per cent on public health care spending.
Certainly, Tsang had tried to do this before, but Chan now has enough money to spread it much wider within the community.
No one would complain if someone stuffs money into his wallet. It is, however, a different matter as to whether the latest largesse of the government will help people individually and society as a whole, or achieve no more than a temporary feel-good effect.