Hong Kong is grappling with a looming budget crisis, as the government anticipates reaching nearly HK$100 billion (US$12.9 billion) in deficit this fiscal year. This alarming financial outlook is prompting authorities to implement significant spending cuts across various sectors, particularly focusing on reductions to the number of contract staff employed within the civil service.
According to sources familiar with the situation, the city’s administration has already begun cutting back on contract staff, with expectations to continue these reductions within the Post-retirement Service Contract (PRSC) Scheme and Non-Civil Service Contract (NCSC) Staff Scheme. Civil servants are bracing for the additional responsibilities, as insiders confirm, "Civil servants will then shoulder all the work done by the axed contract staff," impliciating them heavily as they face increased workloads alongside their primary duties.
The NCSC Staff Scheme, introduced back in 1999, was initially viewed as a flexible employment structure for temporary and short-term contract staff. The present cuts, according to insiders, will not result in immediate layoffs; instead, the government plans to let existing contracts expire before making final decisions on renewals.
At the same time, authorities are weighing potential alterations to the highly subsidized HK$2 (26 US cents) transport fare scheme, which allows eligible residents aged 60 and older, as well as individuals with disabilities, to pay only HK$2 per public transport trip. Implemented to encourage community involvement from the aging population, the scheme has already witnessed significant financial turnover, with reimbursements to transport operators ballooning from HK$1.2 billion during the 2019-20 fiscal year to HK$3.9 billion for the upcoming 2023-24 period.
Currently, proposals are on the table to limit the number of subsidized trips to 240 per month and require beneficiaries to pay 20 percent of the fare for trips exceeding HK$10. Observers note these moves come amid increasing recognition of the unsustainable nature of the current subsidy system, with experts emphasizing, "Solutions will not be simple." The new formulas being considered have yet to be fully explained or demonstrated, leaving many residents concerned about their future fare costs.
Concerns extend beyond transportation to civil servant roles. Reducing contract workers raises questions about the capacity of the civil service to handle its operational demands effectively. With more than 173,000 civil servants already employed as of March 31 last year, these cuts could lead to complications, including delayed services and added stress on remaining staff members.
The future of these proposals and budget measures hangs delicately as the government seeks to strike a balance between fiscal responsibility and the wellbeing of its residents. Further discussions and public commentary will likely ensue as stakeholders from various sectors voice their positions on how to move forward amid this budget crisis, making it increasingly pressing for officials to engage transparently with the community about their budgetary decisions.