Surplus of options for Chan to do good

Paul Chan Mo-po will deliver the current administration's first budget on Wednesday.



Thursday, February 22, 2018

Paul Chan Mo-po will deliver the current administration's first budget on Wednesday.

The old saying goes that people tend to lose their discipline after suddenly becoming rich. So, will we see evidence of indiscipline in the budget when it's ballyhooed at the Legislative Council?

Last year, Chan, the financial secretary, put the surplus for this year at a modest HK$16.3 billion. Instead, he'll astound everyone with a humongous surplus estimated at between HK$130 billion and HK$170 billion.

If his predecessor, John Tsang Chun-wah, had a record of badly underestimating budget surpluses, Chan will outperform the mustachioed one by a long shot.

The amount Chan is about to announce will be so enormous that he had earlier asked policy bureaus to feed him suggestions on how they would like to spend the money. It's a happy problem.

The excessive amount is made possible due to - ahem - lavish revenues from land sales, a new rush by developers to pay land premiums for their land reserves, stamp duty increases, etc.

Certainly, everything comes at a cost. The boom has made housing in the SAR the least affordable in the world.

Then, what should the financial secretary do about the happy problem? Will he lose the discipline expected of someone in his position?

I, for one, hope not, for financial prudence is always the key word for public finance. When money becomes abundant, there's no harm to spend a bit more to make people happy - but not recklessly.

There are demands that everybody be given a cash payout the way Macau residents have been getting. Supporters argue this practice is precedented, since Tsang, in 2011, handed out HK$6,000 cash to every permanent Hong Kong resident adult - including those who had emigrated many years ago and actually lived overseas - costing a total of HK$36 billion.

The giveaway was the first in Hong Kong history - hopefully, it'll also be the last.

Some might have been happy at the time, but in hindsight, it would have made far better sense if the cash had been used to start some innovative schemes so that the public need not worry about this or that down the road.

Armed with such overflowing coffers, there's a lot Chan can do. Medical care, for example. Our public health sector is overloaded with patients queuing for pathetically long hours to see a general doctor at the emergency department, or months, even years, in order to see a specialist.

Can we recruit more doctors and nurses - not only locally, but also from overseas? While there's certainly the political hurdle to overcome, it isn't impossible.

Also, retirement. For many, retirement doesn't exist because stopping work at 65 means unemployment - not beach and sunshine - despite the so-called protection offered by the mandatory provident fund scheme.

Can Chan do something about it?

Sweeteners like tax rebates, changes to make the salary tax regime friendlier, or an extra month of dole payment are also fine.

Chief Executive Carrie Lam Cheng Yuet-ngor says she has a new fiscal philosophy for the new administration. I look forward to seeing that philosophy applied in the upcoming budget.