In anticipation of a wise budget
The financial secretary is to deliver the 2017-18 Budget today. People from all walks of life have recently expressed their hopes for the latest budget as well as their disappointments with previous ones. It is safe to say the most common expectations are more efforts to help ease the financial burdens on local residents as well as businesses, and also financial assistance for those most in need. Given the difficult global economic situation, financial challenges are everywhere. This means the government must dig deeper into its reserves if it wants to reach its development goals — without risking the SAR’s long-term fiscal health, of course.
One of the fiscal highlights or disappointments, depending on who’s talking, is the never-failing budget surplus that just keeps rising thanks to the consistent underestimation by “experts” of government revenues. It has afforded Hong Kong a level of financial security that is the envy of the free-market world. But it has also produced a zealous financial prudence which is annoying to many people. Nevertheless, we must not forget Hong Kong could have gone broke had it not been for the abundant reserves that enabled the SAR government to beat back ferocious attacks by international speculators during the Asian financial crisis in the late 1990s and help make the lingering global economic downturn less of a crippling problem.
Today, few if any people can deny Hong Kong is doing much better than many developed economies in terms of steady growth, because of its integration with the national economy — the top growth engine in the world right now. The latter may have slowed down in recent years but is still one of the strongest. That means Hong Kong is still blessed with the safest economic cushion to fall back on if necessary.
On the other hand, it probably has never been more appropriate for the SAR government to use its reserves more than now, as Hong Kong society is experiencing pain from deep-seated problems, compounded by unprecedented political wrangling. The government must do its best to maintain the wellbeing of Hong Kong’s 7 million population and the SAR economy. This is clearly not the time to reduce fiscal spending.
Besides, the best way to ensure Hong Kong’s financial health is to always invest in productive efforts — especially helping the poor. Poverty alleviation has never been more urgent and this demands more financial input.