Can HK$2 transport subsidy cuts help solve Hong Kong’s budget crisis?

Hong Kong’s HK$2 (26 US cents) transport fare scheme has come under the spotlight amid the city’s significant budget deficit, with sources saying authorities may cap the number of subsidised trips at 240 a month and ask users to pay 20 per cent of the usual price for those costing over HK$10.

Introduced in 2012, the scheme allows people aged 60 or above, and those with disabilities, to pay only HK$2 per trip on public transport, with an aim to encourage them to participate more in community activities.

The previous administration launched the scheme to help an ageing population but there is growing consensus that it has become fiscally unsustainable. Sources did not explain how the new formula being considered had been derived.

The Post breaks down the financial impact of the HK$2 fare subsidy programme on public coffers ahead of the annual budget address on Wednesday and takes a closer look at the proposals.

1. How much is Hong Kong spending on the scheme?

Beneficiaries pay HK$2 per trip on public transport and the government reimburses the rest of the amount of the usual fare to operators.

Over the past five years, the total reimbursement amount has increased by more than 200 per cent from HK$1.2 billion in the 2019-20 financial year to HK$3.9 billion in 2023-24.