Budget surplus earmarked for Hong Kong's future

Including the injection of $15b for Community Care Fund.

According to a release, fiscal reserves will create savings to prepare for handling issues like providing healthcare and alleviating poverty.

Speaking on a radio programme today, Secretary for Financial Services & the Treasury Prof KC Chan said the public has high hopes for the first budget of the new-term Government, which cannot meet all expectations for resolving long-standing problems.

Faced with criticism that the budget is too conservative, Prof Chan replied it is pragmatic, striking a balance between expenditures and income. He noted the increase in operating expenditure is not a small number, and the injection of $15 billion into the Community Care Fund has given low-income families a helping hand.

When asked about underestimation of the surplus, Prof Chan said the more-than-expected revenue is due to increases in land premium revenue and revenue from earnings and profits that were higher than original estimates.

Prof Chan said scholars and experts will be invited to join a working group headed by his bureau’s Treasury Branch, to determine a comprehensive plan for the city’s public finances to cope with the ageing population and other long-term commitments. He stressed the working group will only look at data in order to make recommendations not related to tax reform.

He urged caution on this point, as Hong Kong’s low and simple tax regime has helped maintain the city’s competitiveness.

Prof Chan expects a favourable public response to the proposed launch of a further iBond issue of up to $10 billion, as he predicts the inflation rate will be over 4% and the economic situation will remain unchanged.