Chan on sweeteners squeeze: we first need to make cake bigger

Stacy Shi

Supportive measures have to be scaled down due to deficits and shrinking fiscal reserves for several consecutive years, says Financial Secretary Paul Chan Mo-po.

Chan, speaking on a phone-in radio program, was responding to criticisms that his budget, which drastically cut sweeteners, is "punishing the middle class and failing to take care of the grassroots."

Chan said the reduced ceiling of salaries tax, which was halved to HK$3,000, and the absence of vouchers will not lower people's consumption, which is more linked to economic environment, income level and consumer choices.

"I believe people will spend money in Hong Kong as long as they are offered attractive activities and fun experiences," said Chan.

He also believes it is more crucial to "revitalize the economy and make the cake bigger" by increasing the employment rate and people's income.

Some people objected to the plan to hold monthly pyrotechnic shows, which would cost HK$1 million each.

But Chan said they boost travel and the business brought by the displays should also be taken into consideration when assessing their effectiveness, citing that similar displays at West Kowloon last year increased the business of nearby restaurants by 20 to 30 percent.

He believes frequent fireworks shows will appeal to tourists and the Hong Kong Tourism Board will "work out the kinks" on developing surprising content for each show.

"The shows will also be complemented by other tourism packages to enhance the overall experience," said Chan.

Deputy Financial Secretary Michael Wong Wai-lun said in a Legislative Council meeting that there is no plan to allow members of the public to set off fireworks in a designated area during pyrotechnic shows due to safety concerns, as suggested by lawmaker Scott Leung Man-kwong.

"I think we have to study it carefully, especially in terms of safety," Wong said.

Separately, in response to smokers' dissatisfaction over the 30 percent rise in tobacco tax which resulted in an increased of 80 HK cents per cigarette, Chan said the government will not encourage people to smoke and that another tax increase is inevitable.

"The target is to have tobacco tax account for 75 percent of the selling price of cigarettes, which is currently at 70 percent," said Chan.

New People's Party Lawmaker Lai Tung-kwok questioned law enforcement agencies' efforts in combating illicit cigarette activities. He said agencies have been focusing on the smuggling of illicit cigarettes while neglecting their sale in the city.

In response, Chan said efforts to combat illicit cigarettes will be stepped up and urged departments, including customs, to strengthen enforcement and report back to him regularly.

stacy.shi@singtaonewscorp.com