Financial Secretary Paul Chan Mo-po faces pressure to spend the surplus, six times higher than his original prediction, in the city’s budget instead of saving it
John Tsang’s surplus prediction was six times lower than what it ended up being. Photo: SCMPPoliticians have called on Financial Secretary Paul Chan Mo-po to use the government’s large cash reserves to boost public spending, and ditch the usual principle of keeping outgoings below 20 per cent of the city’s gross domestic product.
Democratic Party chairman Wu Chi-wai said today that if the government is willing to spend 21 to 22 per cent of GDP, the difference in spending could support the economy and boost people’s livelihoods.
“If we look at our financial situation, we can spend one to two per cent more,” Wu said on an RTHK programme today. Hong Kong’s GDP was HK$2.40 trillion in 2015.
When former financial secretary John Tsang Chun-wah announced his budget in February last year, he revealed that he had inaccurately predicted the size of the budget for the eighth year in a row. He said the surplus would be HK$63.8 billion for the financial year ending in March last year, six times higher than his original projection of HK$9.1 billion.
Tsang, who is now running for chief executive, also predicted that the 2016-17 financial year would see a surplus of HK$36.8 billion. The fiscal reserve stood at HK$860 billion when Tsang made his budget speech last year.
Speaking on the same show as Wu, Horace Cheung Kwok-kwan, vice-chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, also said the government had been “too conservative” in its fiscal beliefs.
He said: “Why can’t the government spend more money if it can afford it? It should be considered investments instead of expenditure. It’s investment in Hong Kong’s future.”
The Democratic Party’s Wu said businesses making big profits should pay more tax.
But he said the government might say that would mean a small group of rich businesses paying the most tax, which officials would not favour.
Yesterday, Financial Secretary Chan wrote on his blog that many people suggested he use the government’s large reserves to introduce short-term measures to relieve Hongkongers’ everyday financial pressures. Others have advised him to spend money supporting new industries in the long-term, he wrote.
He said he would consider all suggestions, ahead of his budget announcement on February 22.