Michael Shum
Financial Secretary Paul Chan Mo-po says it might be time for the government to adjust public service charges amid an estimated HK$140 billion deficit in the last fiscal year.
His comments came ahead of his budget speech on February 28.
Chan said the government has put a lot of resources into fighting the pandemic, with public expenditure skyrocketing at the same time.
”The current administration is committed to consolidating public finance by reducing government expenditure and increasing revenue to ensure financial stability,” he said.
However, the government is aware that it has to take into consideration the situation of the city’s development at the same time, Chan said.
”Hong Kong has to maintain its advantage of having a tax-friendly system in order to keep up its competitiveness in the international market and avoid affecting the momentum in its economic recovery,” Chan said.
He added that the whole process should be done after sufficient communication within the community.
”Many public services’ charges have not been adjusted for a long time, and some services under the user pays principle are also far from covering the cost,” Chan said.
”It is perhaps time to review public service charges,” he said, adding the government will carefully review the affordability of different social classes, as well as the business environment in different sectors.
The government will also ensure the underprivileged will get appropriate support and basic public services under Hong Kong’s social security system. In the long run, Chan believes, the key to increasing government revenue is a prosperous economic development.
”The only way to diversify and increase government income is to focus on high-quality development, upgrade traditional industries and explore new economic growth opportunities.
”Expanding the economic pie will enhance development momentum, benefit people in more social classes and increase government income, which can better support social construction and livelihood services.”
Although the government is trying to cut expenses, Chan said building up land reserves and stabilizing the housing supply will not be slowed down.
”Appropriate measures will be taken in response to the market situation in the short run, but slowing down or even halting the effort to build up land reserve, building transportation infrastructure and stabilizing the housing supply is not an option,” Chan said.
”This is because these works are to allow the government some flexibility in responding to market demands and citizens’ expectations.”
Long-term development will involve long-term investment, Chan said, so the government must choose appropriate financing options and leverage market capital effectively.
”For example, the government might cooperate with private enterprises and long-term funds to invest in individual projects, guiding different capital to support Hong Kong’s development.”
michael.shum@singtaonewscorp.com
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