Paul Chan Hints At Hope And Austerity In Budget

Financial Secretary Paul Chan kept his budget plans close to his vest in an unusually short blog entry on Sunday, giving little away other than the colour of his upcoming financial blueprint as he continued to manage expectations of any major giveaways.

He did attempt to strike an optimistic note, saying the pea-green cover of his budget represents the hope the government holds for the future.

“No matter if it’s just a small blade of grass or a tall tree, they both start from a tiny seed – but one that keeps its infinite vitality hidden,” he wrote.

But Chan reminded people to keep their expectations for his budget in check, saying he finalised the blueprint to be unveiled on Wednesday after balancing people’s views with “reality” and various limitations.

He said while the government would maintain a ‘countercyclical policy’ to try to stabilise Hong Kong’s Covid-ravaged economy, its fiscal deficit has soared to a record high, and will remain relatively large in the upcoming fiscal year.

He cautioned that Hong Kong will have to brace for some austerity, likening the situation to having to having to monitor how much food’s available on the dinner table.

“In the real world, we have to see how much food there is… limiting our options. But, with the help and support of family and friends, we still hope that we can still talk and laugh, and optimistically face the future regardless of how much food is on the table. The epidemic will pass, and difficulties will be overcome, and the changing environment will just make us more resilient,” he wrote.

But the business sector is more concerned with specific measures that may be taken – including potential tax hikes that the finance chief had previously hinted at as he warned of a large deficit in the coming year.

Business and Professionals Alliance lawmaker and executive councillor Jeffrey Lam said while Hong Kong’s tax system does need an overhaul, this is not the right time to raise taxes as it will affect the SAR’s overhaul competitiveness, and the people’s livelihood.

“Whether any suggestion of increasing tax will actually increase the government revenue, I don’t know… or whether any suggestion in increasing certain kinds of tax will eventually affect the income of other sectors, I don’t know. But I think the best is stability and keeping everything as is, until our economy revives,” Lam said.