by Lo Fung

I am missing those budget reviews in the past suddenly after seeing this year’s version. They are all official documents, but the Financial Secretaries in the past always tried to leave their marks of signature, words of wisdom, or special message amidst the numbers and income and expenditure items. Someone has left “strengthen your production and save on your expenses,” an idiom derived from the philosophy book “Tian Lun” of Xunzi (Chinese Confucian philosopher and writer), in the review; someone has added comic creativity, and someone has used the lyrics from “Below the Lion Rock” to try to touch people’s hearts. There is nothing memorable about this year’s review. All we have got are numerous question marks and exclamation points. No wonder the citizens gave it such a low score, and even the reaction from the political circle is nearly all negative.

There are so many questions on the review. Some are about the important recommendations that involve tens of billion dollars; some are small projects of several hundred million dollars. Among them, it is the HK$8 billion (US$1 billion) special fund allocation for national security that caught the most attention. According to the review document, this is non-recurrent funding for the expenses related to national security works in the next few years. Many people asked: under what criteria was this figure calculated? To which government department or policy bureau would these expenses be allocated? Would the expenses of the Office of Safeguarding National Security of the Central People’s Government (CPGNSO) be included?...etc. The government officials, including Paul Chan, the Financial Secretary, have not given a clear explanation.

So far, there is only one clear answer: HK$8 billion will only be spent on national security matters in Hong Kong. The central government will be responsible for the expenses of the CPGNSO. Having one answer is better than having none. At least it can eliminate a little bit of the misunderstandings. Unfortunately, this answer has led to more questions. What is the basis to allocate such an enormous fund for the budget if the staff salaries and other expenses of the CPGNSO are not part of it? Take ICAC (Independent Commission Against Corruption), an important law enforcement organization of Hong Kong, as an example. It has over 1,500 staff with an annual expense of just over HK$1.2 billion (US$155 million). So HK$8 billion can keep ICAC running for more than six years. Does it mean the expenses of the works for national security will be more than that for ICAC?

When being pressed for more clarifications in the last few days, Paul Chan only said the HK$8 billion is for the next few years, but exactly how many years? He didn’t say. National security is a sensitive matter. Of course, many details are confidential and cannot be disclosed. But the public doesn’t want to know how the government carries out its national security work or the specific operation and investigation. All people want to know is how the government worked out the figure of HK$8 billion, what the reason and the standard is. Sharing this type of information would not harm the national security investigation works but can increase transparency and reduce the doubts among the public, eliminating some of our questions.

The budget review was also followed by plenty of exclamation points. The general consensus is that the government is spending a lot, but the money is not going to the right places. The government has already worked up a HK$250 billion (US$32 billion) fiscal deficit in the past year to fight against the epidemic and stabilize the economy and left the reserve with approximately HK$900 billion (US$116 billion). In the new financial year, still facing economic uncertainty and with the epidemic is still not under control, the government is rolling out several fiscal stimuli, which includes the electronic coupon plan that would cost HK$36 billion (US$4.6 billion), in an attempt to lift the sluggish economy, and slow down the increasing unemployment rate. But it has brought the new fiscal deficit to over HK$100 billion (US$13 billion).

In terms of scale, Hong Kong’s budget of HK$100 billion deficit is definitely smaller than the US$1.9 trillion stimulus package from Biden’s U.S. government (about 10% of the U.S. GDP). If the HK$100 billion deficit and extra expenses are spent correctly and can benefit most people, it will certainly help to relieve the negative emotions in the society and revitalize the weak consumer market. However, Paul Chan and his boss Carrie Lam cannot change their “I know the best” attitude and unrealistic tendency. They put many conditions and targets even when giving money away, which has distorted a measure supposed to give people straight-forward help and cheer them up. Such as the HK$36 billion electronic coupons plan, Paul Chan suggested each citizen can receive HK$5,000 (US$645), which will be paid into an electronic payment method like the Octopus and in five monthly installments of HK$1,000 (US$129) per month.

According to the government’s explanation, paying out spending vouchers by installment can ensure the money will be spent on local gastronomy and expenses instead of being saved up, spent overseas, or on travels. Every penny will then be used in Hong Kong and benefit many small and medium businesses. It sounds almost rational, but in reality, it is unrealistic and disregards the people. After over a year of the epidemic ordeal, the citizens and companies have started to run out of money. Many grassroots employees have lost their jobs and are in desperate need of cash. The only way to help them out of their immediate impasse is to hand out cash to them directly, which will slightly reduce their desperation. An electronic voucher is inflexible, and HK$1,000 per month is such a small amount. It is also inconvenient for those who do not know how to use the electronic payment method, especially the elderly and those with little education. That is why the measure has been met with harsh criticism, and many have been demanding direct cash payouts.

Perhaps it was due to the loud volume of the criticism, Paul Chan emphasized yesterday that the details of the electronic voucher plan are to be determined, which would make it more convenient for everyone. But the most convenient and what people desperately need is cash, not some electronic vouchers. If the government has decided to splash out HK$36 billion to help people, why go about benefiting the people in a way that is the easiest?

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