Major changes in Hong Kong’s fare system and budget strategies

The new arrangement, “HK$2 flat rate cum 80 percent discount,” addresses the “short rides on long routes” issue, as Financial Secretary Paul Chan Mo-po announced that the government is also studying a segmented fare system for buses.

According to the Budget 2025/26 announced on Wednesday, significant changes have been made to the HK$2 fare scheme for the elderly and disabled, introducing an 80 percent discount for trips over HK$10 and capping concessionary trips at 240 per month. 

Speaking on a radio program on Thursday to explain the Budget, Chan said that this limit is appropriate and believes few elderly individuals will reach the 240-trip level. 

He said the need for maintaining a flexible mechanism to support seniors who are still working or frequently travel for medical appointments, while noting that the new arrangement indirectly addresses the problem of taking short rides on long-distance routes. 

Chan revealed that the Transport Department is in discussions with bus companies and has identified over 100 bus routes in Hong Kong that could implement a segmented fare system, with further research underway. 

Regarding the decision not to impose a land departure tax, he said that such a tax would significantly impact citizens, and the government aims to avoid disrupting their lives while seeking new revenue sources. 

Chan added that the decision to raise the air passenger departure tax from HK$120 to HK$200 per passenger was made because it represents a smaller proportion of overall ticket prices, which he believes citizens can afford. 

The Budget also announced the discontinuation of the HK$2,500 student grant for secondary, primary, and kindergarten students starting next school year. Chan said that there are other programs to assist families in need and that the government still encourages childbirth, urging citizens to review the policies comprehensively. 

In terms of fewer sweeteners, he stated that the government aimed to provide support measures within its capabilities to show concern for middle-class citizens and hopes for understanding. 

“Our support measures were more substantial during better economic conditions, and we still want to show concern for the middle-class citizens within our means despite facing a deficit,” he said.

“Therefore, our support measures have only been reduced by half compared to last year, rather than being completely eliminated.” 

Chan also revealed that the authority is reviewing increases in electric vehicle license fees, parking meter charges, and fixed penalty fines. He noted that preliminary proposals exist, but the Transport Department needs time to assess their impact on traffic management. 

(Cheng Wong)