Alice Wu

Opinion | Hong Kong’s unsweetened budget leaves middle class feeling sour

Paul Chan had the unenviable task of delivering a budget with little good news for regular Hongkongers, in particular the end of many popular support schemes

Putting the Lantau Tomorrow Vision on hold is welcome, but if few other good ideas are forthcoming, it’s still better to take the time to think things through rather than rush off in the wrong direction

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Televisions in an electronics store in Tai Koo display the live broadcast of Financial Secretary Paul Chan Mo-po delivering his budget address at the Legislative Council complex on February 28. Photo: Eugene Lee

Alice Wu

Published: 9:30am, 4 Mar 2024

Right now, the person who probably best understands Financial Secretary Paul Chan Mo-po is Heung Yee Kuk chairman Kenneth Lau Ip-keung, at least in terms of having to be the bearer of not-so-good news when there is so much pressure on telling the good stories of Hong Kong.

Like Lau, who drew the No 15 “neutral” fortune stick for Hong Kong over the Lunar New Year holiday, Chan had the tough task of delivering a budget speech that wasn’t bad but definitely wasn’t good in laying out the city’s current economic landscape.

There are some sticky situations the government has been warning us about for some time. The growing budget deficit is one, plus the challenges of resuscitating the economy in the midst of complex geopolitics over which we have no control.

The HK$101.6 billion (US$13 billion) deficit means there is little money to waste. Chan had the thankless task of reducing or ending “sweeteners” such as electricity subsidies, consumption vouchers and rate concessions. He has also raised taxes, which tends to be a killjoy in this city.

The top earners of this city will have to pay an additional 1 per cent for annual earnings beyond HK$5 million, which is nothing compared to other economies. However, this could signal increases for the less wealthy in the future if our economic conditions do not improve.

With the government easing residents off the concessions they have enjoyed in recent years, we know where we are heading. We will soon be paying back all those sweeteners in higher rates and taxes.