Hong Kong finance chief Paul Chan defends budget amid criticism that it does too little to address health care and housing
- Salary tax deductions for rent had been ‘seriously considered’ but could backfire, financial secretary says a day after unveiling blueprint
- He also points to extra health care measures such as HK$700 million in additional recurrent funding for Hospital Authority
Hong Kong’s finance chief defended his latest budget on Thursday amid a record-low rating and criticism from residents who said he did not do enough to tackle housing and health care problems.
A day earlier, after the budget address by Financial Secretary Paul Chan Mo-po, the University of Hong Kong interviewed 561 people, compiling a satisfaction rating of 47.1 out of 100 – the lowest score since the survey was first conducted in 2008.
On the rating, Chan said: “It’s understandable that some residents may be unhappy because there were fewer relief measures in this budget than last year’s, but we have done our utmost in policy areas such as health care and city management.”
Chan had estimated a surplus of HK$58.7 billion (US$7.48 billion) for 2018-19. The blueprint included relief measures such as a reduction in salaries and profits taxes and HK$10 billion earmarked to ensure stable funding for public health care services and for coping with unexpected circumstances.
On a radio phone-in programme on Thursday morning, Chan responded to queries from about 10 residents, many of whom complained he was doing too little for people struggling to pay their rent or to get better health care services.
A caller, surnamed Wong, said: “I earn HK$28,000 (US$3,500) a month and spend half of it on paying rent. Why can’t we deduct the rent we pay from our taxable income [so that we can pay less tax]?”
Wong also urged Chan to offer more subsidised housing for the sandwich class – those too wealthy for public housing but who cannot afford to buy private homes.
Paul Chan’s budget sounds alarm over need for Hong Kong to adapt to survive
The finance minister responded he had “seriously considered” adding rent as a new category under salary tax deductions. Salary tax deductions currently include charitable donations and self-education expenses.
But he feared measures to help families with their rent could backfire.
“If we roll out rent subsidies for families queuing for public housing, it would only benefit their landlords or homeowners. And if we include rents in tax deductions to help the middle class, it would also be unfair to those lower-income families waiting for public housing,” he said.
Chan added that since last year, the government had revamped its housing policy so that 80 per cent of Hong Kong residents were eligible for subsidised flats.
Mr Secretary, you have wasted HK$10 billion to please our medical professionals while their patients sleep in the corridors or toilets of overcrowded public hospitals
“The problem is now we don’t have enough subsidised homes … We need to increase supply,” he said, adding that such measures would range from starter home ownership schemes to transitional housing projects for low-income families waiting for public homes.
Several other callers were concerned about health care.
One of them, surnamed Cheung, said: “You have wasted HK$10 billion to please our medical professionals while their patients sleep in the corridors or toilets of overcrowded public hospitals. How will you help us as we wait five to six years for a specialist consultation session?”
Budget explainer: sweeteners, subsidies – and who stands to benefit
Another caller, surnamed Tam, said: “My father passed away earlier this year after spending more than a year in a public hospital … The service was bad, it was like we were begging for their service. The bill said the government subsidised more than HK$40,000 for my father, but I’d rather spend that subsidy on a private hospital.”
Chan said he would relay these issues to the Food and Health Bureau.
“My brother and I have been treated in public hospitals, so I understand what you mean … We have launched our second 10-year project to redevelop or build new hospitals, but it needs time to bear fruit,” he said.
Apart from the HK$10 billion public health care stabilisation fund, Chan also pledged to provide more than HK$700 million in additional recurrent funding for the Hospital Authority to implement measures to boost staff morale and retain talent.
