Hong Kong finance minister sounds alarm over city’s financial stability as recurrent spending nears half a trillion dollars a year
- Paul Chan points to rapid growth in government spending which has ballooned 25 per cent in past three years
- Financial secretary says city facing record deficit of HK$300 billion
Ballooning spending was pushing Hong Kong further into the red and new sources of income were needed to help balance the government’s books and reassure global markets that fiscal responsibility remained a top priority, finance chief Paul Chan Mo-po said on Sunday.
In sounding the alarm over the city’s financial stability, Chan noted that recurrent spending had soared by 25 per cent over the past three financial years to hit an expected HK$486.6 billion (US$62.77 billion) in 2020-21.
Further strains to the public purse should be expected from a planned HK$2 (25 US cents)concession fare for public transport for residents aged 60 or above. He estimated the scheme would cost the government about HK$6 billion a year.
Such outlays would grow “fairly fast with an ageing population” and as a result, the city was likely to face challenges in generating income and cutting costs, Chan warned.
Writing on his official blog, the financial secretary said Hong Kong faced a record budget deficit of more than HK$300 billion in the financial year ending next March.