Latest budget strikes good balance between present and future needs

It goes without saying that a government budget can never be good if it places too much emphasis on meeting the immediate needs of society but fails to make provision for long-term needs, and vice versa. It is in this sense that Financial Secretary Paul Chan Mo-po has put forward a favorable budget for the new fiscal year of 2019-20, one that balances larger expenditure for society’s near-term needs with ample investment and provision for future economic development.

Keeping in line with the current administration’s proactive economic policy, as made known by Chief Executive Carrie Lam Cheng Yuet-ngor on many occasions, the financial chief has further loosened the purse strings.

To meet both the short-term and long-term needs of society, this budget provides new resources ready for use of about HK$150 billion, accounting for a hefty 24 percent of the total government revenue forecast for the next fiscal year.

To relieve residents’ financial burden in the short term, the financial chief proposes a basket of relief measures, including a 75 percent reduction in both salary and profit taxes for assessment year 2018-19, waiving property rates for four quarters of 2019-20 and providing an extra one month allowance to the elderly and social welfare recipients as well as offering financial benefits to students.

Responding to residents’ demand for improvements in the quality of life, the financial chief proposes to increase the recurrent expenditure for the new fiscal year by 9 percent to HK$441 billion, providing more resources for enhancing public services in the short- to medium-term including the key area of social welfare, healthcare and education.

The new budget also hasn’t overlooked the needs of businesses, especially small and medium ones. It comes up with a slew of measures to help businesses cope with the headwinds blowing hard now as well as the challenges foreseen ahead. These include measures to help reduce their operating cost, as well as provision of more funds for helping to boost their liquidity, advance their technology and uplift their brands.

For brighter prospects of the special administrative region’s long-term development, the budget promotes further diversification of the economy. While introducing more measures to strengthen the city’s traditional pillar industries including financial services, tourism, trading and logistics, and professional and business support services, the budget comes up with numerous measures or initiatives to develop emerging industries, including innovation and technology, creative industries, and the development of an international transportation center.

Amid mounting economic uncertainty in the US and European markets, the financial chief has rightly placed more emphasis on developing innovation and technology, as well as creative industries, as new engines for future economic growth. The move dovetails with Hong Kong’s role in the Guangdong-Hong Kong-Macao Greater Bay Area development. Economic diversification would not only help reduce the vulnerability of Hong Kong’s small and open economy to external shocks, but also provide a greater range of quality employment opportunities for young people who have been complaining about the city’s slow social upward mobility.

If anyone wants to nitpick, he or she might complain about the new budget offering fewer handouts compared with previous ones. But this is both understandable and logical, given that the budget surplus this time has shrunk significantly and the government needs to invest more and make provision for future. All in all, the new budget has struck a good balance between the present and future needs of society.