Paul Chan Signals Fewer Handouts In Coming Budget

Financial secretary Paul Chan said on Sunday he will have to keep some firepower in reserve to tackle any uncertainties Hong Kong may face in the coming year, amid calls for sweeteners in his upcoming budget.

On his official blog, Chan wrote that he fully understands the pain and pressure on the middle-class and grassroots after two years of economic contractions.

However, he said government reserves dropped some 30 percent to HK$800 billion in just one year because of the Covid-19 pandemic, with the deficit in the current fiscal year expecting to hit HK$300 billion after introducing numerous relief measures.

"The epidemic has still not ended and that prevents economic recovery. Moreover, this year is still full of uncertainties, there's a need to reserve resources to tackle what we already know and the unknowns," he wrote.

Coupled with the ever-changing external economic and political environment, the administration can't let its guard down, the finance chief added.

Chan said he will continue with a countercyclical fiscal policy in his budget, increasing public spending to mitigate the impact of an economic downturn.