Hong Kong budget philosophy offers very little change
A study has revealed spending on infrastructure projects and the welfare of the well-off continues apace despite claims that those in need will benefit
Chief Executive Carrie Lam Cheng Yuet-ngor and her finance chief like to advertise their latest budget as a model of generosity, a departure from the previous miserly administrations. A new study by the independent Legislative Council’s research unit seems to show otherwise.
The headline jump on education spending seems spectacular, an increase of 28.4 per cent, or HK$25.2 billion, to HK$113.7 billion. But that’s a one-off.
In fact, education as a share of total government spending has dropped from 22.9 per cent in 2007-2008 to 20.4 per cent in 2018-2019.
The decline is even greater in terms of recurrent education spending from 23.5 per cent to 20.8 per cent during the same period. So much for saying our children are the future.
When it comes to social welfare, it’s undeniable that Lam’s predecessor Leung Chun-ying has greatly increased overall spending, a rising trend that Lam is continuing.
However, spending on elderly service as a share of recurrent welfare expenditure levelled out at 10.7 per cent in 2011-2012 and has remained at roughly 11 per cent ever since.
This is strange, considering the government has used the ageing population as an excuse to justify everything from the need to hold on to its large reserve to setting aside funds for no particular use other than for “a rainy day”.
More than one in 10 of those infrastructure projects costing HK$1 billion or more have had a cost overrun, ranging from 22 per cent to 196 per cent.
Meanwhile, the government’s policy on welfare for the well-off continues apace.
According to a previous study by the same Legco unit, for much of his tenure, former finance chief John Tsang Chun-wah’s budget giveaways and handouts mostly benefited the propertied class: 28.7 per cent went to property owners and 23.5 per cent to taxpayers; only 3.9 per cent to low-income families and another 7.6 per cent to other disadvantaged groups.
Under the latest budget, the top 10 landlords – who own about 40,000 property units between them – will get rates waivers of more than HK$256 million.
The new budget philosophy looks a lot like the old one.