‘Mild’ Hong Kong budget fails to deliver amid structural deficit fears: analysts

Observers and economists have said Hong Kong’s “very mild” budget failed to promptly address government spending shortfalls and will not spark any uptick in consumption, as they called for more aggressive measures to boost revenue amid concerns over a structural fiscal crisis.

Following the blueprint’s unveiling on Wednesday, some also expressed disappointment with the limited housing and land sale measures aimed at revitalising the market.

Other critics said the absence of pay cuts for top officials would give a perception the administration was not committed enough to sharing economic hardships faced by residents.

In his annual budget address, Financial Secretary Paul Chan Mo-po announced a pay freeze for all civil servants, cuts in government recurrent expenditure and reductions in transport subsidies for the elderly as part of a package of measures to help balance the books. The deficit for the current financial year would be HK$87.2 billion (US$11.2 billion), he said.

Tang Heiwai, an economics professor at the University of Hong Kong, said the budget still appeared to be “very generous”.

“[Chan] was, in my opinion, very mild in addressing the serious deficit,” he said. “He has taken into account the interests of many segments of society … It’s debatable whether there should be deeper cuts in certain spending areas.”