'Hong Kong could run out of money within 20 years', warns John Tsang ahead of budget

Financial Secretary John Tsang Chun-wah warned yesterday that fears public spending was rising too fast were "not without reason" - doing little to ease talk of a split with Chief Executive Leung Chun-ying.

Leung used his policy address last week to announce a huge increase in recurrent spending, much of it on welfare, and insisted that the government could afford the bill of up to HK$20 billion per year. Writing on his blog yesterday, Tsang (pictured) said that while the government could afford the cost for the foreseeable future, the day would come when surpluses turned to deficits.

But one of Asia's richest men, Sun Hung Kai Properties co-chairman Thomas Kwok Ping-kwong, said the government "deserves much praise" for its poverty alleviation plans.

In his post, Tsang warned that recurrent spending, once implemented, could be difficult to cut, and said spending could snowball if factors such as inflation and a growing number of beneficiaries were taken into account.

Tsang wrote that "the day when the budget turns into deficit and fiscal reserves are used up will not be in the distant future, though not while the current administration is still in office [its term runs until 2017]".

"I will spare no effort to maintain a budget surplus in my remaining term to save more and fight for more time to tackle these structural problems," he wrote.