Hong Kong’s Financial Secretary, Paul Chan, will reveal the 2025 budget proposal tomorrow, February 26. This budget is highly anticipated as it will address the city’s projected fiscal deficit of approximately HK$100 billion. The cover of this year’s budget document features lake blue, symbolizing boundless opportunities for Hong Kong’s development amid financial challenges.
With mounting pressure on the government to control the deficit, there have been calls for resource management strategies. Suggestions include reviewing the senior citizens’ HK$2 transport fare concession, freezing or even reducing civil servant salaries, and implementing consecutive years of increased wealth tax. Stemming from recent forecasts, the government is reportedly investigating the possibility of opening more gambling avenues, potentially extending to basketball betting.
According to AM730, the HK$2 transport fare concession for senior citizens has enjoyed widespread popularity, but critics argue it should be revised to reflect the increasing financial pressure on the government and the ageing population. It has been proposed to maintain the subsidy for those aged 60 and above, with adjustments limiting usage to 240 rides per month, translating to eight rides daily. This adjustment may help curtail misuse of the concession.
Along with the fare adjustments, voices within the community are advocating for civil servants' salaries to be frozen or reduced. Chan acknowledges the importance of addressing civil servant pay, considering its influence on the private sector. He aims to strike the right balance between the state’s budgetary constraints and the necessity of maintaining quality public services.
There is also discussion around reducing government expenditures by 5% to 10% until the city’s economy stabilizes. Suggestions include freezing civil service posts where possible and utilizing technology to streamline departments and reduce staffing requirements.
On the revenue side, the New Territories Association of Societies has proposed 19 recommendations, including the opening of new sports betting options for basketball, snooker, and tennis to curb illegal betting activities. These proposals could generate around HK$1.5 billion annually via gambling tax. Observers note the continual focus on enhancing revenue, with the upcoming budget likely boasting novel forms of income streams to counterbalance the deficit.
Chan has also hinted at the introduction of higher taxes on wealthy individuals, with recommendations from the Hong Kong Institute of Certified Public Accountants advocating for raising the income threshold for the wealth tax from 16% to 17% for those earning more than HK$5 million. This new tax measure is aimed at generating additional revenue from high-income earners to help alleviate the financial burden on the public sector.
While talks of financial aid like cash payouts and electronic consumption vouchers began five years ago, recent estimations suggest the likelihood of reprising such measures this year is slim due to the fiscal constraints faced. Previous years saw the government's fiscal giveaways decreasing proportionately.
The impending budget announcement will be live-streamed for public access via the official budget website, where citizens can view Chan’s speech, follow related press conferences, and access other pertinent details concerning the budget.
After the announcement, pamphlets summarizing the budget proposals will be distributed across 20 district consultation centers managed by the Home Affairs Department, as well as government offices, public libraries, and community shopping centers.
This budget session is complex, as it must navigate not only the numbers on paper but also the real lives of residents affected by fiscal decisions. The outcomes of this budget debate will shape not just the immediate economic picture but also the long-term vision of Hong Kong’s fiscal health.
With various stakeholders providing their opinions, including civil servants, the pro-business community, and social advocacy groups, this year’s budget could see significant adjustments across the social fabric of Hong Kong. Their voices highlight the urgency of finding viable solutions amid the anticipated fiscal tightrope the government may walk.