Hong Kong budget lacked fresh vision for economic future
The relaxation of property market cooling measures announced in the recent budget has sparked much discussion. The government has scrapped the “harsh measures” previously implemented to bring down soaring property prices.
In other words, the government wants to see a rebound in property prices, which would not only revive Hong Kong’s economy but also benefit the government itself, whether through increased stamp duty revenue from property transactions or greater income from land sales.
Historically, a significant portion of the Hong Kong government’s revenue has been closely tied to the land and property market. However, whether these measures will prove effective within a short period remains to be seen.
An additional source of government revenue this year is the planned issuance of HK$120 billion in bonds. However, former financial secretary John Tsang Chun-wah has warned against the government using loans to address not only non-recurrent spending but also recurrent expenditure.
Apart from the aforementioned measures, this year’s budget does not have any major revenue-generating initiatives but rather focuses on expenditure constraints.
Taking the social welfare sector which I am familiar with as an example, given that government departments have to reduce expenditure by
1 per cent, general funding for many social welfare institutions could be cut by a similar percentage in the coming year. With an increasing number of people falling below the poverty line in addition to the general economic headwinds, reducing funding for social welfare institutions will inevitably exacerbate the suffering of the needy. I find this unacceptable.
However, the lack of effective strategies to increase revenue not only raises concerns about the government’s future fiscal situation but, more importantly, indicates the lack of direction for
Hong Kong’s economy. Why is Hong Kong still relying on traditional industries like finance, tourism, transport, logistics and retail? The past year has told us that these industries alone cannot drive our economy.
Shouldn’t Hong Kong be developing new industries? How should this development be approached? These aspects were hardly touched upon in the budget.
Developing new industries is clearly not achievable in a year or two, and to see tangible results would further require a decade or more. I worry that if the government persists in its current approach in the subsequent years, not only will we lose out to Singapore within a few years, but we may find ourselves lagging behind and being surpassed by other emerging cities.
Tik Chi-yuen, Legislative Council member