Sunday, July 5, 2015   

Expect limited sweeteners in budget
(02-26 09:57)

The Financial Secretary, John Tsang Chun-wah, will unveil his budget later this morning, and all indications are that there will fewer handouts than in previous years.
Tsang is expected to paint a gloomy picture, both of the government's finances and the overall economy, and warn that Hong Kong's perennial budget surpluses could give way to large deficits that could deplete the city's fiscal reserves within 20 years, RTHK reports.
Tsang has in recent weeks been lowering public expectations of another giveaway budget, warning that handouts and one-off relief measures will soon be a thing of the past.
But he is expected to give out some sweeteners, like salaries tax rebates and property rates waivers, following complaints from the middle class that their interests were largely ignored in last month's Policy Address.
However, other measures like electricity subsidies, and a month's worth of extra payments for welfare recipients and the elderly could be scrapped.
Overall, observers expect at least a 30 percent reduction in one-off relief measures from last year's HK$33 billion giveaway.
The finance chief is also expected to give a dire warning, that the ageing population and an unsustainable rise in public spending could lead to structural deficits within 10 years, and completely wipe out Hong Kong's fiscal reserves in 20, if nothing is done.
Tsang will likely stress that Hong Kong's economic growth will slow in future, and he may propose new ways to generate revenue for the government.
He is expected to report a HK$14 billion surplus for the government this fiscal year, down sharply from last year's massive HK$64.8 billion.   
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