Paul Chan: public needs come ahead of saving cash
Financial Secretary Paul Chan on Saturday said the government would continue to put the well-being of citizens ahead of reducing its hefty deficit, though he cautioned people not to expect consumption voucher handouts to continue and revealed that higher taxes could be on their way for the rich. In his budget on Wednesday, Chan predicted that the territory's fiscal deficit would hit a worse-than-expected HK$139.8 billion for the financial year, taking its reserves down to about HK$820 billion. He also estimated that the reserves would fall to HK$762.9 billion, enough to cover a year's public spending, by 2024.  But the financial chief told an RTHK programme that fiscal reserves remain at a healthy level, and the authorities must strike a balance between spending and saving money.  "We shouldn't save money just for the sake of doing it. What are the policy objectives of the government? The top priority is, of course, people's well-being. So we are supposed to take money out to help citizens during tough times," Chan said.  Chan noted that there had been a range of opinions on consumption vouchers, with some people wanting them scrapped and others demanding a bigger handout than the HK$5,000 per person he eventually settled on, half the amount given last year. The minister said the sum would take the pressure off Hongkongers this year.  "Whenever we distribute consumption vouchers, the total amount involved is relatively large. [Handing out] HK$5,000 per person this year will probably cost us more than HK$30 billion. Financially, this is not feasible in the long run," he said.  Amid suggestions that the government should look again at broadening the tax base, Chan revealed that officials had had internal discussions about reform. However he said new taxes were a sensitive manner and he couldn't go into detail.  On a separate radio programme, Chan said he agreed that people with more money should pay higher taxes. He said the government was still planning to implement a progressive rating system for domestic properties, meaning owners of more expensive homes would pay more in tax.