Paul Chan’s budget is old wine in a new bottle

Unimaginative, rule-bound and conventional, Financial Secretary Paul Chan Mo-po has offered us neither long-term planning nor shorter-term solutions in his latest budget.

There is the usual 60 per cent division into education (HK$124 billion [US$15.8 billion]), social welfare (HK$97.2 billion) and health care (HK$88.6 billion), the three big spending items.

I give you there is the much advertised 10.9 per cent increase in health spending – it’s recurrent, meaning year after year from now on, and not just one-off. But even with the increase, the big-three total spending still hovers around the 60 per cent level.

The rest, as usual, is taken up by security, food and the environment, infrastructure and government support (a major staff spending item), and economic and community services.

The health care increase is an essentially legalised “bribe” to medical staff in the public sector, who have been complaining about understaffing and being overwhelmed by an influx of patients during the latest flu season.

Of course, this year hasn’t been worse than last, when some public hospitals hit an occupancy rate of 130 per cent. What is different is that medical staff complaints have been politicised and tied to anti-immigrant sentiment and calls to scrap the 150 daily quota for mainland migrants – hence the quick and generous response from the government.

Another government spending rule: don’t do it above 20 per cent of gross domestic product. Since last year, Chan would have us know that under his tenure, he is ready to break this rule now and in the next few years – by 1.2 to 1.8 percentage points. Wow!

This is his new financial philosophy to adopt “forward-looking and strategic planning” to optimise the fiscal surplus to invest for Hong Kong and to relieve people’s hardships. It’s what most people would call throwing extra crumbs to the little people.

Note that these are not an even recurrent commitment, but a one-off: for example, an extra month of payment in Comprehensive Social Security Assistance (CSSA); a cut in salary tax and rates; a one-off grant to poor students and medical vouchers for the elderly.

As for long terms, Chan dodged the only real government plan: the controversial HK$500 billion East Lantau Metropolis.

Meanwhile, the fiscal reserves, which exceeded HK$1 trillion last year, will hit HK$1.16 trillion.

We can look but not touch, because there are “economic headwinds” ahead and we always need them for a rainy day, however defined.