Increasing Hong Kong public service charges won’t help to balance books, economists say, calling for focus on boosting business, land sales

Financial Secretary Paul Chan says he will review some public service charges that have not been adjusted for a long time

Economists say any changes will affect a lot of people, especially the needy, with very little benefit to the government

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Hongkongers may have to pay more for some public services in future. Photo: Jonathan Wong

Published: 8:30am, 9 Jan 2024Updated: 12:13pm, 9 Jan 2024

Increasing charges for public services will do little to improve Hong Kong’s ballooning financial deficit, economists have warned, urging the government to instead focus on improving the business environment and boosting land premiums.

Their calls on Monday followed Financial Secretary Paul Chan Mo-po revealing in his weekly blog that he would review some public service charges that had not been adjusted for a long time and those based on a user-pays principle, the costs of which the government could not recoup, in a bid to boost revenue and balance the books.

Chan recently predicted a deficit of more than HK$100 billion (US$14.1 billion) for the 2023-24 financial year following massive spending during the Covid-19 pandemic, much more than the initial HK$54.4 billion forecast.

Government revenue, especially from stamp duty on property purchases and stock transactions, and land premiums, had also dropped, which the administration earlier attributed to weak asset markets.

Public service charges accounted for less than 4 per cent, or HK$21 billion, of total revenue, estimated to be HK$543 billion, according to the 2023-24 budget.

A Post check found fees had been frozen for years or even decades on a number of public services.

For example, water charges – priced at up to HK$9.05 per cubic metre – have been frozen since 1995. The government also waived 75 per cent of water and sewage charges of non-domestic households during the pandemic.