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Opinion
Alice Wu
Alice Wu
Hong Kong’s unsweetened budget leaves middle class feeling sour
- Paul Chan had the unenviable task of delivering a budget with little good news for regular Hongkongers, in particular the end of many popular support schemes
- Putting the Lantau Tomorrow Vision on hold is welcome, but if few other good ideas are forthcoming, it’s still better to take the time to think things through rather than rush off in the wrong direction
Right now, the person who probably best understands Financial Secretary Paul Chan Mo-po is Heung Yee Kuk chairman Kenneth Lau Ip-keung, at least in terms of having to be the bearer of not-so-good news when there is so much pressure on telling the good stories of Hong Kong.
Like Lau, who drew the No 15 “neutral” fortune stick for Hong Kong over the Lunar New Year holiday, Chan had the tough task of delivering a budget speech that wasn’t bad but definitely wasn’t good in laying out the city’s current economic landscape.
There are some sticky situations the government has been warning us about for some time. The growing budget deficit is one, plus the challenges of resuscitating the economy in the midst of complex geopolitics over which we have no control.
The HK$101.6 billion (US$13 billion) deficit means there is little money to waste. Chan had the thankless task of reducing or ending “sweeteners” such as electricity subsidies, consumption vouchers and rate concessions. He has also raised taxes, which tends to be a killjoy in this city.
The top earners of this city will have to pay an additional 1 per cent for annual earnings beyond HK$5 million, which is nothing compared to other economies. However, this could signal increases for the less wealthy in the future if our economic conditions do not improve.
With the government easing residents off the concessions they have enjoyed in recent years, we know where we are heading. We will soon be paying back all those sweeteners in higher rates and taxes.
The middle class, as expected, was thrown under the bus. If we must look at these annual budgets through the frame of “winners and losers”, the middle class almost always seem to be the losers as the last to share in the spoils of prosperity and the first to lose any government support. Resources must be channelled to those who need it most.
The challenge for the government is to create favourable conditions for the middle class to make it on their own. Investing in innovation and technology is the right thing to do. Holding off on developing the Kau Yi Chau Artificial Islands and focusing resources on the Northern Metropolis is smart. We simply cannot afford both.
But the budget also highlights some of the problematic thinking of this administration. The public has quickly responded, raising questions about plans for monthly pyrotechnic and drone shows costing some HK$1 million a month.
Victoria Harbour is splendid as it is now, and the lights on both sides display the energy and vitality of the city. They have been dimmed a bit in recent years, but extra shows are not going to make it more attractive. When things become regular, they become mundane and the “wow” factor is hard to sustain.
Belt-tightening Hong Kong needs to learn to avoid white elephant projects
Belt-tightening Hong Kong needs to learn to avoid white elephant projects
But more importantly, aren’t we supposed to be going “green”? With the impending waste charging scheme, are officials demanding that people be more environmentally minded while forgetting to be so themselves?
This is not on Chan alone, of course. It would seem that the government as a whole needs to try harder when formulating policies to weed out its inconsistencies.
In this case, the Culture, Sports and Tourism Bureau and the Environment and Ecology Bureau need better communication to ensure their policies are coherent. As for measures to boost tourism, it might be best to hang back a little when we are out of ideas and wait for better inspiration.
As the fortune stick drawn on behalf of the city showed, maybe it is better to just take a pause when stuck in the thick forest before we head off in the wrong direction.
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Hongkongers react after 2024-25 budget scraps measures to cool property market
Hongkongers react after 2024-25 budget scraps measures to cool property market
And while the government takes that step back to look more deeply at the city’s challenges, why not take time to really consider how we should be renewing the Hong Kong brand?
Chan set aside money to make Hong Kong one of the many destinations for visitors to the Greater Bay Area. How do we ensure we are not going to be “just another Chinese city”? Selling ourselves as a city in the Greater Bay Area requires more than just repeating the tired taglines, such as our mix of Chinese and Western cultures.
There is more than a tourism brand that needs reviewing. The government needs to figure out who we are, where our competitive advantages lie and how we fit in – in the country, in the world – and where we are heading.
Alice Wu is a political consultant and a former associate director of the Asia Pacific Media Network at UCLA
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