Time to control spending, cut costs amid deficit: FS
Financial Secretary Paul Chan on Sunday said the government needs to control its spending amid pressure on the public purse, with an expected budget deficit of around HK$100 billion in the current fiscal year. Writing on his blog, the minister said government expenditure has grown much faster than its revenue in recent years, even if anti-pandemic measures were excluded. Chan noted there could be a budget shortfall of just over HK$100 billion in the financial year ending March, which would be double the amount anticipated at the start of the year.  He said it's possible the government will stay in the red for 2024/25 as well. "The geopolitical situation remains complex and volatile, which is hindering Hong Kong's economic growth. It is hard for revenue related to the asset markets to recover quickly, and the opportunity for continued deficits next year cannot be ruled out," he said. The SAR's fiscal reserve stood at HK$834.8 billion in 2023, down from HK$1.1 trillion in 2018. The finance chief said it's time to control spending or even cut costs if necessary, adding that various government departments are to reduce 1 percent of their expenses in each of the next two financial years. Chan also said Hong Kong needs to speed up economic development to increase government revenue. "The most effective and practical way to increase government revenue is to make the pie bigger and generate more revenue through economic development. We must continue to enhance our competitiveness and seek new breakthroughs." He noted Hong Kong's efforts to attract top firms in innovation and technology to set up shop here and to enhance financial cooperation with the mainland and the Middle East, saying the city is moving in the right direction but needs to go faster.