Paul Chan’s budget should ease the pain of the coronavirus crisis in Hong Kong, but not much more
- Under great pressure to be generous with our ample reserves, the financial secretary must keep in mind that Hong Kong faces two other major challenges apart from a virus outbreak. Our political crisis, for one, cannot be solved by throwing money at the problem
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Was the idea seriously thought through and evaluated? Or was it just tossed out as a scheme to buy some temporary popularity?
Governments everywhere are struggling to cope with the financial implications of their ageing populations. We should be pushing everyone here to accept 65 – even 70 – as the normal retirement age and gearing taxpayer help for the aged accordingly. Sending a signal that subsidies should start at an even younger age is simply wrong.
Hong Kong retirement age ‘must rise or legislation may be needed’
The combined effect of these measures will be major changes in the economic relationship between China and the US, with spillover effects on other economic relationships.
In response to these and other developments, the Hong Kong economy faces a period of substantial restructuring, accommodating changes to basic industries such as tourism and logistics. Hong Kong’s entrepreneurs are among the most creative in the world and we will survive. But there will be short-term pain.
The government will need to invest heavily to ease the community through the transition. The need to conserve public resources to finance the changes is a strong argument for continued prudence in future budgets.
The third crisis, of course, is the political one triggered by the extradition brouhaha. It has not been resolved, only interrupted by the virus outbreak. It needs to be tackled comprehensively in a way which restores community harmony.
Once the virus situation has been quelled and the economy starts to recover, there will still be pressure for short-term relief measures. But budgetary largesse is no substitute for political accommodation and reform. Chan will need to resist attempts to prove otherwise.
My advice to the financial secretary this time round is simple: be generous now but with one-offs, not recurrent programmes; garner savings for long-term restructuring and growth; resist attempts to buy political peace with candies. It won’t work.
Mike Rowse is the CEO of Treloar Enterprises