Public works tweaks to 'help tame' budget

Stacy Shi

The government should consider reducing the number of infrastructure projects or collaborate with private developers to try to bring down a persistent budget deficit, says a Chinese University economist.

Financial Secretary Paul Chan Mo-po has estimated that the deficit for the fiscal year ending in March would be just under HK$100 billion, with authorities pledging to cut expenses to restore balance rather than raise revenues.

The 2024-25 fiscal year is projected to be the third deficit in a row.

CUHK associate economics professor Terence Chong Tai-leung yesterday said that merely cutting manpower or productivity would have minimal impact on the deficit.

Echoing Chong's view, businessman-lawmaker Andrew Lam Siu-lo, of the Election Committee, said slashing the pay of senior officials and legislators would merely be "symbolic" and it may also affect the wage scale of some subvented organizations that adjust the salaries of their staff with reference to civil service pay.

Chong and Lam both suggested the government adjust the time frame of advancing infrastructure projects, such as delaying the construction of nonurgent projects or inviting private participation.

"The government still allocated more than HK$100 billion for public works last year. The necessity and importance of some facilities should be reconsidered," Lam said.

Chong suggested the government launch more competitive bidding for public works and set out construction details in advance to manage costs.

He suggested minimizing both bond issuance and unnecessary expenditure, while the ideal issuance level should remain below 60 percent of the city's gross domestic product.

Lam further called upon the government to provide a clear explanation of the prevailing economic restructuring circumstances, given that some long-term investments, such as in I&T, may not yield immediate returns.

"I believe that if the government could restore the community's confidence in investment and consumption, it would facilitate the reduction of the deficit."

stacy.shi@singtaonewscorp.com