The Year of the Ox, which starts on 12 February, does not augur bright for Hong Kong.

Financial Secretary Paul Chan Mo-por highlighted a long list of troubling economic indicators in his blog last Sunday. He warned that “there may be more business closures and lay-offs after the Chinese New Year if the epidemic situation is not under control as soon as possible.”

There is, of course, no sign of the coronavirus abating in the near future as the authorities scramble in the fight against what threatens to be a fifth wave of infection. Although vaccines are on the way, it will take at least half a year for a sizeable number of citizens to be inoculated. Further closures and lay-offs are more of a foregone conclusion than a forecast.

Mr Chan noted that there were almost 8,700 applications for bankruptcy last year, representing a jump of 6.6% from 2019. This is on top of a 7.2% year-on-year hike in compulsory winding-up petitions, which have reached 450 cases last year. Meanwhile, unemployment stands at a 16-year high of 6.6%. It is doomed to break the 7% threshold within weeks.

The gloomy picture is for everybody to see. The Financial Secretary, however, is conspicuously silent on what antidotes he has in mind for the ailing economy. There are complaints about our officials sitting on their hands. Even before he assumed office, US President Joe Biden came up with a US$1.9 trillion “American Rescue Plan,” which is worth over 9% of the country’s GDP before the pandemic. The package is so substantial that pundits are worried that the massive stimulus package might overheat the post-COVID economy. The Hong Kong Government’s counter-epidemic relief measures pale in comparison.

The public consultation on the next Budget is on-going. Many sectors are screaming for help. Yet, officials have made it abundantly clear that there would not be a third round of subsidies to businesses under the Employment Support Scheme. They are also not in the mood to entertain demands for a special fund to aid those out of a job.

There have also been calls to allow employees to draw early from their own Mandatory Provident Fund accounts to deal with immediate financial difficulties. Others want to get rid of the various special duties on transactions of residential flats introduced to dampen the private housing market about a decade ago. Officials remain not receptive. Instead, they seem to be more interested in raising revenues, such as raising stamp duties on stock trading. They also appear to be smiling on a recommendation from the Heung Yee Kok to reintroduce wine duty, which was removed in 2008.

Whether all this is part of a public relations exercise to lower public expectations is anybody’s guess. We can only tell on 24 February when Mr Chan delivers his annual fiscal blueprint to the Legislative Council.

Ahead of the Budget speech, the Hong Kong Institute of Certified Public Accountants estimated that the deficit for the current financial year would be a historical high of $348 billion, while fiscal reserves would drop to $812 billion. Among other proposals, the professional body urged the government could look into possibilities for new taxes. That must be music to the Financial Secretary’s ears.

The association also asked for vouchers to be dispatched to stimulate consumption. It argued that this would be more targeted than cash handout. It did not specify an amount.

Politicians, on the other hand, are more direct. Former Legislative Councilor Kwong Chun-yu, for example, is leading a signature campaign to demand a $15,000 cash handout for all adult citizens. Over 10,000 people have signed up earlier in the week.

In a recent online town hall meeting, the Chan remained non-committal. Pointing to diverging public views, he said the matter needed to be considered very cautiously.

In 2012, Mr John Tsang Chun-wah dished out $6,000 to all permanent residents aged 18 or above. He became the first Financial Secretary in Hong Kong to do so. The populist decision was made only after legislators vowed to veto his proposed budget. Last year, Mr Chan was bowed to popular demands to give out $10,000 for citizens aged 18 or above.

That became the focal point of his last budget, which is 188 paragraph-long discounting the supplement and appendices. The economic situation is even worse than a year ago.

The people at large will judge whether the budget is down to earth on one criterion: Does it come with a $15,000 cheque. Any lesser offer could trigger yet another political crisis.

(Andy Ho is a public affairs consultant. A former political editor of the South China Morning Post, he served as Information Coordinator at the Chief Executive’s Office of the HKSAR Government from 2006 to 2012.)

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