Investment income will cover 10pc of government's expenditure this year: finance secretary

Hong Kong will receive an estimated HK$45 billion of investment income this year - enough to cover 10 per cent of total government expenditure and the most since a record high in 2008, Financial Secretary John Tsang Chun-wah revealed yesterday.

Speaking on RTHK's show, Tsang said the figure proved that it was important to "save sensibly" and not fritter away the city's reserves.

"Our fiscal reserve, about HK$820 billion now, is not just a piggy bank for rainy days," he said. "It generates a sizeable investment income year after year for public spending on sunny days as well.

"Without the investment income, it will be even more challenging for us to make ends meet in a few years' time," Tsang said.

If Tsang's prediction is accurate, this year's investment income will be the most since the record high of 2008, when it was HK$46.4 billion. The second highest figure since the handover was HK$45.9 billion in 1999.

Responding to criticism that the setting up of a "future fund" is a way to lock up a portion of public resources in order to deprive the community of necessary services, Tsang said the fund was set up as an investment strategy so that the city would be better prepared to deal with "a period of difficulty in the future".

The fund, to be set up later this year, will consist of the HK$220 billion land fund and a quarter to one-third of future government budget surpluses.