Former financial secretary John Tsang Chun-wah has urged the government of Hong Kong to seek alternative revenue sources to cover government spending, cautioning that the city has entered an era of structural fiscal deficits. Tsang expressed his concerns on social media, emphasizing that the revenue-boosting measures announced in the recent budget were insufficient compared to the tens of billions required to achieve fiscal balance.
The current financial secretary, Paul Chan Mo-po, disclosed the government’s plan to issue HK$120 billion (US$15.3 billion) in silver, green, and infrastructure bonds for the 2024-25 financial year, with a projected annual range of HK$95 billion to HK$135 billion for the subsequent four years. This proposal aims to address the shortfall in public finances, which are not anticipated to achieve a surplus until 2027-28.
The deficit for the current financial year is estimated to be HK$101.6 billion, significantly higher than the previous projection of HK$54 billion, largely due to a substantial reduction in land premiums and stamp duty income. Tsang warned that relying on bond issuances would eventually lead to the payment of debts’ interest and emphasized that Hong Kong has officially entered an era of structural fiscal deficits.
Tsang criticized the revenue-boosting measures from the recent budget, highlighting that they were expected to generate only about HK$2 billion, falling far short of the required tens of billions to achieve fiscal balance. He cautioned that implementing measures to boost revenue would cause significant hardship and would not be easy to execute.
