Chan surplus targets elderly, health careTop News | Riley Chan 26 Feb 2018
Financial Secretary Paul Chan Mo-po hinted at pumping money into strengthening the medical system and providing more for elderly care with the massive surplus.
Pressure has been mounting on the government to hand out cash as accountants are projecting a huge surplus of HK$140 billion or more.
Days before unveiling this administration's first budget, Chan admitted the surplus will be higher than last year.
But he rebuffed calls for cash handouts, emphasizing the need to invest in health care and elderly welfare when there is a healthy surplus.
"Shouldn't the government actively plan to strengthen ancillary facilities of the medical system when it is financially comfortable in face of the aging population?" Chan wrote on his blog yesterday.
The secretary said he had heard comments that instead of investing for the long term the government should give out cash to solve immediate problems.
But he argued that if the government does not plan ahead and prepare during good times, it would be harder to provide quality services when finances get tight.
"Making preparations for the future does not mean neglecting immediate needs. But we must have a vision for the future because we have seen the problems society is facing today," Chan said. "Whatever the budget measures will be, it's hard to make everyone happy."
The budget will be delivered on Wednesday. Chan said it is the result of more than 40 rounds of consultations with different stakeholders.
In 2011, millions of Hong Kong adults benefited from the government's handout of HK$6,000, which did not require a means test.
While Chan did not make it clear whether Hongkongers would receive cash handouts again, he earlier implied that the chances were slim.
On a radio program on February 17, Chan said the government preferred more targeted relief measures instead of what is being done in Macau, where cash handouts have been given to all residents for 11 years in a row.
The government does not agree with ways that do not target any specific groups, he said.
Pro-Beijing lawmaker Michael Tien Puk-sun said the government has been intentionally miscalculating the budget surplus in the past, and that it is unhealthy to hand out a lot of sweeteners to endear itself to the public. Cash handouts would no doubt make people happy, he told a radio program, "but it will only be a temporary pleasure."
Tien suggested the government reform the tax system and establish a foundation to fund the recurrent expenditure.
However, economist Francis Lui Ting-ming said on City Forum that people can be trusted more than the government in using money wisely. One-off cash handouts are totally feasible considering the big surplus, he said.
"When we let the government decide how to use the money, very often the usage is very inefficient," he said.
Even if the government comes up with good policies, they take a long time to put in place due to red tape, Lui said.
Give money to people and it could be utilized in a much better way, said the adjunct economic professor at the University of Science and Technology.
Speaking on the same forum, former pro-democracy legislator Lau Siu-lai said cash handouts and long-term investment should not be put on opposite sides. The government could do both because it is affordable with the huge surplus, she said.