FS insists HK not in era of structural deficits
Financial Secretary Paul Chan said on Monday there is no need to worry about the government falling into a structural deficit as he expects both its recurrent and consolidated accounts to return to the black in next two to three years. The financial secretary is predicting a consolidated deficit of HK$101.6 billion by the end of the current fiscal year. He also announced the issuance of HK$120 billion worth of bonds in the next financial year when he unveiled his budget proposals last week. Speaking on Metro Radio, Chan promised that the government would not resort to raising debt to pay recurring expenses. "Proceeds from bond sales will definitely not be used to pay recurrent expenditure," Chan said. He said such proceeds will be used instead to invest in infrastructure and public works projects which yield economic and social benefits. Chan's comments came a day after former financial secretary John Tsang said Hong Kong is inevitably entering a "structural deficit era". Expressing worries over the decline in Hong Kong's fiscal health, Tsang also questioned the government's practice of borrowing money year after year to cover daily expenses.