HK deficit could balloon to HK$310 billion, city’s leader reveals, as she hints at belt tightening ahead of policy address

25-Nov-2020 Intellasia | South China Morning Post | 6:51 AM Print This Post

Hong Kong’s leader has said she will unveil about 200 new initiatives during Wednesday’s annual policy address, but warned of spending restraint with the budget deficit threatening to balloon to HK$310 billion (US$40 billion).

Chief Executive Carrie Lam Cheng Yuet-ngor said many of those new policies were to be delivered through reforms of existing systems at minimal cost to the public purse.

For the 2020-21 financial year, Financial Secretary Paul Chan Mo-po had originally estimated a deficit of about HK$139.1 billion.

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Lam is expected to deliver her fourth policy speech at the Legislative Council at 11am on Wednesday.

She will host a press conference in the afternoon, and attend a televised forum in the evening to elaborate on her latest road map for tackling the city’s mounting economic, social and political issues.

Sources said a youth employment project would be announced, to create thousands of jobs for some Hong Kong young people to work in nine Guangdong cities under the Greater Bay Area scheme, Beijing’s ambitious plan to integrate Hong Kong, Macau and the nine cities into an economic powerhouse.

Jobs to be offered would come from sectors ranging from technology, finance, to cultural and creative industries.

Insiders also said Lam might unveil some modest improvements to Stock Connect schemes between Hong Kong, Shanghai and Shenzhen, such as allowing more Hong Kong-listed biotech firms to take part, and promoting private equity funds, family offices, and real estate investment trusts.

In her weekly press briefing on Tuesday, the city’s leader said a total of 700 new policy initiatives had been rolled out in the past three policy addresses.

“Ninety-five per cent of those policies were completed or in progress. For the remaining five per cent, we will be racing against time to get them done,” she said at a weekly press briefing on Tuesday.

“It was not completely within our control that we could not deliver on some of those measures yet. You all remember in the past year, the Legislative Council did not spend much time on meetings, much time was spent on filibustering and making quorum calls. So I hope that in the coming year, more can be done.”

Lam also said she had to roll out new policies without adding to the government’s financial burden.

“Public finances are extremely tight, and through this year’s budget and three rounds of anti-epidemic fund [initiatives], we have used HK$310 billion [to fight the pandemic]. This year’s deficit could be as high as that too,” she said.

“So many new policies will be done through reforms or simplifying… We aim to provide better public services without using extra resources.”

The chief executive also said that during her trip to Beijing, Guangzhou and Shenzhen from November 3 to 7, she secured the support of mainland authorities on a series of policy initiatives. Those initiatives would be revealed on Wednesday, she added.

“I hope to bring more hope to Hong Kong,” Lam said.

But the chief executive cautioned that until the Covid-19 crisis was under control in the city, it would be difficult to carry out new policies to improve the economy and people’s livelihoods.

The Hong Kong government recently said it expected the city economy to shrink by 6.1 per cent this year the worst decline on record.

Its gross domestic product contracted by a worse-than-feared 3.5 per cent in the third quarter compared with a year ago, when the city was in the grip of anti-government protests.

With Hong Kong’s unemployment rate reaching a 16-year high of 6.4 per cent amounting to 257,800 people out of work between August and October labour unions, as well as business and professional sectors, have called on the government for help.

Local politicians have urged Lam to use the bay area project as a springboard to revitalise the city’s ailing business environment, as well as to boost young people’s confidence in their future by offering them more job opportunities on both sides of the border.

Sources said the “GBA Youth Employment Project”, which would last for one year initially, would be launched by various departments, while local youth organisations would work with large companies that have expressed interest in taking part.

The government would subsidise the companies in creating jobs for Hong Kong young people, the source said, with the hope the young people could earn around HK$15,000 to HK20,000 per month under the scheme.

Felix Lee Kar-chung, executive director of UMP Healthcare Holdings, which provides medical and health care services in Hong Kong, Macau and mainland China, hoped that the government would respond to some of his sector’s long-standing demands to help city firms operating north of the border.

Topping his “policy address wish list” is the expansion of the government’s health care voucher scheme to cover all local medical institutions in the Greater Bay Area, Beijing’s economic plan to integrate Hong Kong, Macau and nine Guangdong cities.

Currently, Hongkongers aged 65 and above are entitled to annual vouchers worth HK$2,000 for private health care services, including visits to general practitioners and dentists. But up north, they can only be redeemed at University of Hong Kong-Shenzhen Hospital.

“The government should extend the scheme to cover accredited institutions in the Greater Bay Area, after all many Hongkongers live outside Shenzhen across Guangdong, as it’s quite expensive to live in Shenzhen. They have medical needs too,” Lee said.

His group partners with some 90 mainland institutions to run Hong Kong-style health care services in the province.


Category: Hong Kong

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