Hong Kong’s public spending has grown 3 times faster than its revenue. Now experts are calling for authorities to rethink where the money goes
- As total expenditure balloons to HK$760 billion, government urged to take a more targeted approach to spending and stop dishing out universal sweeteners
- Lawmaker Ronick Chan calls for more control on welfare spending, crackdown on misuse of HK$2 fare subsidy
The current situation has sparked calls from economists and politicians to review the administration’s approach to spending, including the need to dish out benefits to those who have already left the city.
Government revenue rose by more than a third from HK$478 billion (US$61.1 billion) in 2014-15 to an estimated HK$642 billion in 2023-24, with the latest predicted income likely to be an overestimate due to reduced revenue from land sales and stamp duties.
But the total expenditure almost doubled from HK$396 billion to an estimated HK$760 billion over the same period.
Although the issuance of bonds in recent years added to income, the city still logged a deficit in every financial year since 2019-20, except for 2021-22. The shortfall is expected to balloon to more than HK$100 billion in 2023-24, far more than the initial estimate of HK$54 billion.
The fiscal reserves, which peaked at HK$1.17 trillion in 2018-19, are expected to shrink to an estimated HK$780 billion – about 12 months of expenditure – in 2023-24.
Top accounting firms are less optimistic, predicting a deficit of as much as HK$148 billion, leaving only HK$686 billion in the reserves.
