Mike Rowse

Opinion | Hong Kong budget: city must continue to resist magic money temptation

Say goodbye to cash handouts and expect fees and charges to be raised wherever possible. Hong Kong is still in a prudent position but things are getting tighter

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Financial Secretary Paul Chan Mo-po at Aviation Day 2023 at the AsiaWorld-Expo, Chek Lap Kok, on August 2. Photo: Yik Yeung-man

Mike Rowse

Published: 8:15am, 11 Sep 2023

Although Hong Kong’s 2024 budget is many months away, a great deal of preparation has been completed. The first half of each financial year is spent inviting ministers to offer proposals for spending on new and improved services. The treasury section of Financial Services and the Treasury Bureau advises how much room there is within trend growth rates to increase recurrent public expenditure.

A committee chaired by the chief secretary then conducts the resource allocation exercise and puts forward proposals to the chief executive. A similar exercise takes place for capital projects.

Based on feedback from public consultations, which John Lee Ka-chiu is conducting, and his own views, the final package emerges and forms the basis of his policy address next month.

Between then and the budget announcement, usually in late February or early March, the financial secretary considers revenue ideas – such as whether to cut taxes.

I don’t have a fly on the wall in the corridors of power but I think it is possible to outline some of the likely main outcomes. On spending, there is going to be very little room for manoeuvre. We can say goodbye to cash handouts.

A lot of money will have to be committed to funding the (unwise) decision by Lee’s predecessor to expand the concessionary HK$2 (25 US cents) public transport fare to those aged 60 and above, unless that can somehow be reversed. Most of the rest is likely to go towards improving elderly care, whether providing more places in dedicated facilities or vouchers to spend on such services.