Hong Kong budget: A 'sensible' Budget that fails to please the masses
By Joyce Lim
25 February 2017

HONG KONG (The Straits Times/ ANN) - Hong Kong residents disappointed with lack of cash handouts despite higher surplus. 

Many Hong Kongers had envisioned goodies such as generous cash handouts, a waiver of electricity bills and bigger tax cuts.

Not too much to expect since the government was set to post a HK$92.8 billion (S$17 billion) Budget surplus for the 2016/17 financial year ending March 31. This eclipses last year's HK$11 billion surplus and will boost fiscal reserves to HK$935.7 billion.

So imagine Hong Kongers' utter disappointment with the one-off sweeteners announced by Financial Secretary Paul Chan in his maiden Budget speech on Wednesday that were almost the same as what his predecessor John Tsang had handed out last year.

Chan's message of fiscal prudence and the need to invest in a better future was lost on many who were expecting short-term help.

"I am very disappointed that the government did not hand out any cash this time. John Tsang did previously," said Tommy Chan, a 39-year-old administrative officer.

"I don't see how he (Chan) is 'sharing the fruits' of our economic development," added the father of two who was looking forward to a cash handout.

Hong Kongers in the lower-income group, who had expected a waiver in electricity bills and rebates in public housing rents, argued that the surge in the surplus came largely from land and stamp duty revenues and should therefore be "returned" to home owners. Kimmy Tong, 41, an accountant, is frustrated that there is not enough assistance for the poor. "On the surface, it looks like he (Chan) is helping many people by giving tax cuts and covering many areas like eldercare and education," she said.

"But there are many elderly people sleeping in the streets who are jobless. The tax cuts will not benefit them. Many of them do not even have enough to eat every day."

Likewise, pan-democrats criticised the Budget for not giving more help to the low-income group. Lawmaker Roy Kwong said the Budget failed to address the high rental burdens faced by the grassroots community.

Chan, who is less than two months into his job, took over from Tsang, who resigned to run for the city's top post in next month's chief executive election.

In his Budget speech, Chan proposed that one-third of the surplus be given out in the form of reductions in salary and profit tax, one month of extra allowance for welfare recipients and a waiver of property tax for four quarters, capped at HK$1,000 per quarter.

The other two-thirds would go towards meeting longer-term needs of the community such as care for the elderly, sports and youth development, and support for technology and innovation development.

"So, hand on my heart, this is what I consider to be a balanced use of this surplus, catering for both the short-term expectations of the community and the long-term needs of the community," he told a press conference after his Budget speech.

Chan, a certified accountant, explained that the high surplus was of a non-recurrent nature, with most of it coming from the property sector, so it would be "irresponsible" to use it to commit the government to any long-term measures.

The 2017/18 Budget was delivered amid growing tensions over income disparity in the city.

Some analysts have lauded Chan for what they call a prudent and balanced Budget, with some describing it as "forward-looking" and "sensible", one that places importance on investing for the future.

Measures include setting aside HK$30 billion to strengthen elder- care services and rehabilitation services for the disabled; and HK$10 billion to develop innovation and technology, as well as set up a new committee to "re-industrialise" the sector.

What stood out was the establishment of a tax policy unit to look at ways to attract investments and increase the city's competitiveness, which Chan's predecessor had been criticised for failing to do.

With less than five months to the end of his term on June 30, Chan has shown some courage in taking a different path from that of his popular predecessor and setting a new direction in public finance.

Addressing the public's gripes, he said: "Many people may only focus on the expenditure and revenue parts of the Budget. But to me, the Budget is not just a collection of cold and hard figures. It also indicates the priorities set by the government in resource allocation, reflecting the values we hold."

Source(s):

More Stories