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Elizabeth Cheung

Financial Secretary Paul Chan Mo-po has come under pressure to prudently manage Hong Kong’s finances after the city recorded deficit of HK$87.2 billion (US$11.2 billion), with pundits hoping the budget revealed on Wednesday can balance the books.
The Post looks at Chan’s game plan to cut the government’s spending and increase its revenue sources.
New or increased charges

The city’s air passenger departure tax will be increased from HK$120 to HK$200 in October. The move is likely to boost the government’s revenue by about HK$1.6 billion each year.


Various talent and capital investor admission schemes now include a HK$600 application fee. Visa fees have been raised to either HK$600 or HK$1,300, depending on the duration of the applicant’s limit of stay under the schemes. The move is expected to raise HK$620 million for the government each year.


The government will also review various charges, such as annual licence fees for electric vehicles, parking meter charges and fixed penalties for traffic offences – potentially bringing in an extra HK$2 billion.


A boundary facilities fee levied on private cars departing via land-based border crossings is also being considered. A charge of HK$200 per car could bring in another HK$1 billion annually.


A global minimum tax will be introduced for multinational companies, generating an extra HK$15 billion in annual revenue.



Spending cuts

Government employees will have their pay frozen. The policy covers the chief executive, politically appointed officials, non-official Executive Council members and civil servants, as well as members of the judiciary, the Legislative Council and the city’s district councils.


Authorities aim to cut about 10,000 posts in the civil service by April 2027.


The government is also expected to reduce its recurrent expenditure by 7 per cent between 2024-25 and 2027-28.


Eight public universities will have their funding reduced by 2 per cent annually in the next three years, or 4 per cent over the cumulative period, and will need to return HK$4 billion to the government in 2025-26.


A HK$2,500 grant for every secondary, primary and kindergarten student will be scrapped, starting from the 2025-26 school year.


The government will also scale back its HK$2 public transport concessionary fare scheme, with commuters needing to pay 20 per cent of the fare for trips costing more than HK$10. The number of subsidised trips will also be limited to 240 per month.


The threshold for the Public Transport Fare Subsidy Scheme will be raised from HK$400 to HK$500, starting in June.


District cooling systems in new development areas will also be reviewed, with the move expected to create at least HK$40 billion in savings in terms of works expenditure.



Hong Kong government forks out two-thirds of HK$90 million tab for HK$2 fare revamp

Why China’s economic reset is a credibility test for Hong Kong

Why Hong Kong must resist pressure to loosen budget discipline

Hong Kong finance chief revises budget deficit to HK$80.3 billion, down 8%

Hong Kong budget 2025-26

Budget 2025: how is Paul Chan planning to balance Hong Kong’s books?

Financial Secretary Paul Chan delivers his budget speech on Wednesday. Photo: Sam Tsang

Call for Hong Kong to tackle long-taboo topic of new taxes

Financial Secretary Paul Chan has ruled out introducing any form of GST or sales tax, arguing they could undermine the city’s competitiveness. Photo: Elson Li

Pay freeze for Hong Kong civil servants, with 10,000 government posts to be axed

The Hong Kong government headquarters in Admiralty. Photo: Edmond So

Civil servants descend an escalator at the Hong Kong government headquarters in Admiralty. Some 10,000 civil service posts will be axed in the coming financial year to address the city’s budget deficit. Photo: Edmond So

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Finance secretary lays out new and increased fees to boost revenue and a string of cutbacks to reduce government’s expenditure


Finance secretary lays out new and increased fees to boost revenue and a string of cutbacks to reduce government’s expenditure.


Paul Chan

Budget 2025: how is Paul Chan planning to balance Hong Kong’s books?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Finance secretary lays out new and increased fees to boost revenue and a string of cutbacks to reduce government’s expenditure

Finance secretary lays out new and increased fees to boost revenue and a string of cutbacks to reduce government’s expenditure