Hong Kong Financial Secretary Paul Chan hints at scaling back one-off relief measures in upcoming budget amid concerns over increase in recurrent expenditure
- At a forum organised by RTHK on the upcoming budget, Paul Chan voices caution amid public calls for cash handouts
- Some relief measures may have to be adjusted to accommodate funding for additional schemes recently announced by city leader Carrie Lam, he says
Hong Kong’s financial secretary on Saturday hinted at scaling back some one-off sweeteners in his upcoming budget, amid concerns that the newly announced HK$10 billion (US$1.29 billion) relief package would significantly increase the city’s recurrent expenditure.
Paul Chan Mo-po also voiced caution in the face of public calls for cash handouts on Saturday, stressing that the government had to consider the financial burden given the estimated budget deficit.
Chan dropped the hint after a forum organised by the city’s public broadcaster RTHK on his upcoming budget, attended by around 100 citizens.
Chan said he had to find resources to fund the 10 new welfare measures announced by Chief Executive Carrie Lam Cheng Yuet-ngor on Tuesday, with accommodation likely to be made in the city’s budget to be delivered next month.
“Year after year, we have rolled out one-off relief measures, be it salaries and profit tax rebate, rates rebate, or other expenditure items,” he said. “The total amount ranges from HK$20 billion to more than HK$60 billion, which is quite substantial.”
“Some of these may perhaps be adjusted to accommodate the funding requirements of some additional measures as recently announced by the chief executive,” he said.
HK$10 billion welfare package signals a shift in Hong Kong government’s priority
The 10 measures include lowering the age threshold for using public transport for just HK$2 per ride from 65 to 60, and giving out housing subsidies to people who have waited for a public flat for more than three years.
These will increase the government’s recurrent expenditure by two per cent.
Chan said the recurrent expenditure had increased significantly over the past decades. Citing that the figure was HK$150 billion in 1997/1998 and HK$200 billion in 2007/2008, he said it had increased to about HK$400 billion in the last two financial years. It rose by HK$40 billion in 2019/2020.
Warning of diminishing government revenues – particularly from land sales – in the coming years, Chan said the government would study the possibility of widening the tax base.
In the forum, some people said they wished for a cash handout. A young man even urged Chan to give out HK$10,000 to every citizen.
But Chan, in a measured tone, said different views had been received. “People may get angry if the handout is too little … We have to consider that very carefully, taking into account the fiscal burden.”
U-turn on elderly travel among Carrie Lam’s HK$10 billion welfare package
“The government has an integrity issue … You can’t fix all problems through law enforcement,” a middle-aged banking sector employee said.
Chan said the government had reflected on its governance over the past months and explained that the protests did affect Hong Kong’s international reputation. On calls for setting up an independent inquiry panel to probe police’s use of force on protesters, Chan resoundingly said “no”.
Meanwhile, Secretary for Transport and Housing Frank Chan Fan denied that the government penalised young people by excluding non-elderly singles while giving out cash allowances to public rental unit applicants who had been waiting for more than three years.
“Considerations are usually given to families and elderly people who are single. Younger applicants who are single are usually assessed by a points-based system,” Chan told a radio programme on Saturday. “The latest measure follows this direction.”
Chan also said that a study on tenancy control of subdivided flats, which would be carried out by the government, would take around one year.
