Deficit fixed

Easing into Snake Year gradually. Yesterday’s Standard reports Financial Secretary Paul Chan’s suggestions for tackling the government’s budget deficit…

Financial Secretary Paul Chan Mo-po has put forward potential areas for cost-cutting within education and health care and says adjustments will be made to the HK$2 fare scheme for the elderly and disabled in response to the fiscal deficit.

…He said the HK$2 fare scheme for the elderly cannot remain unchanged indefinitely as its current model is not financially sustainable.

…Regarding proposals to reduce or freeze civil servant salaries, Chan highlighted the importance of considering their impact on the private sector, particularly given the low unemployment rate.

With declining student numbers, maybe there are ways to trim education expenditure. But how can he cut health spending when public hospitals are already under-resourced? 

Assuming big tax hikes are out of the question, the only real options are: axing big infrastructure projects; and reducing civil service costs. 

Any justification for the huge Lantau reclamation went out the window when officials found that there is in fact space for several hundred thousand apartments in the New Territories (thanks to the miraculous disappearance of land ownership and other problems). And a public-sector pay freeze to bring government salaries into line with the private sector is long overdue.

Chan’s reported comments that lower civil service salaries would ‘impact the private sector, particularly given the low unemployment rate’ are puzzling. A tight supply of manpower will prevent private-sector employers from using government pay cuts as a pretext to reduce their workers’ pay (if that’s the undesirable impact he claims to foresee). Conversely, a mass exodus of government staff would prove that public-sector pay levels are in fact as low as they can get.

The real problem is that civil servants would whine like crazy. Maybe a threat to bring in Elon Musk would focus their minds.

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12 Responses to Deficit fixed

  1. Joe Blow says:

    Regarding the $ 2- transport scheme, I have a theory: in every Hongkie family with a senior person there is the “family Octopus card”. It lies on the dining table and anyone who is going to make a MTR/ bus trip can use it to travel around town happily, especially on longer and more expensive trips. This way, the family can easily save 1-2 thousand per month.
    Every day I see fellow travelers on $2- trips who are definitely not seniors.

  2. Mjrelje says:

    Typical, just as I was planning for next month to move my office into the DB ferry for $2 rent and they might cut it off before I get started.

  3. Stanley Leiber says:

    The $2 transport fee is a godsend for old people. It is essential for their mobility and dignity. It’s disgraceful that a man earning $400k per month++ would even consider it.

  4. Probably says:

    So who agreed the mechanism whereby the differential between the full travel fare and $2 is paid by the government to the operators? The MTR and bus companies must be rubbing their hands at this. Either allow discounted fares and let the transport operators suck it up or raise the $2 to $2.5. Surely there is someone in government with access to the stats and a spreadsheet?

    Oh, and stop building white elephants. A 50,000 seat stadium to replace a 40,000 one so that someone can build over the Wanchai sports ground? Did the 40,000 stadium even fill up at last years Rugby Sevens? Who wins from that?

  5. Young Winston says:

    I cannot see the govt revoking the existing JY cards of 60-64 yr olds. More likely they’ll just up it t0 $2.5 or $3 for them, or all JY holders. They could also (instead) cap it at, say, $1,500-worth of fares monthly ($50 per day). Most likely, they’ll just do nothing, though.

  6. Steve McGarret says:

    So we save money by taking from the oldest and the poorest. Obviously their morale doesn’t matter. The elderly rich don’t use buses or the MTR as this would entail mixing with the riffraff.These decisions are made by those who drive or are driven around in cars. How about larger fines for illegal parking and increased tolls for tunnels. A more immediate saving would be to abolish the Legislative Assembly and the Executive Council since they have no purpose and are filled with overpaid shoeshiners.

  7. Paul says:

    A couple of points:

    – the government pays the difference between $2 and the fare that the person would have paid otherwise under concessions from the transport operator. For people over 65 the MTR and bus companies already give 50% discount from their own pocket. So the 60-64 year olds do contribute a disproportionate share of the total cost to the government.

    – anyone in receipt of disability allowance is also entitled to a $2 personalised Octopus (with a photo); there are tens of thousands of these of all ages, and, as they say in wokeland, “not all disabilities are visible”. If you can persuade a HA psychiatrist that you are depressed then you can get the card. I know someone who is clearly under 60 and has such a card. She gets stopped maybe once or twice a year by staff at MTR or ferry gates and asked to show the Octopus with photo.

  8. Dooh Nibor says:

    Because we couldn’t possibly look at shaving even a few percent off the $156 billion (22% of the $721 billion total government expenditure) that they use to massively overpay current and retired civil servants.

    It makes much more sense to take it out of the $104 billion they spend on healthcare (a mere two thirds of civil service pay) and the $4 billion they spend on retired ordinary folk’s $2 fare Octopus cards (a measly 2.6% of civil service pay).

    Because who needs those things, eh?

    Plus, slashing spending on healthcare should lead to even greater savings on the Octopus scheme, due to the ensuing drop in numbers of retired folk.

  9. Chinese Netizen says:

    “How about larger fines for illegal parking and increased tolls for tunnels.”

    And how about a congestion fee for Central and TST on weekends (for starters) just as a “study” (since the gov’t loves those so much) with gradual implementation full time? Anyone that has walked Nathan or Queens roads on weekends can clearly see it’s a parade of “bring your posh car out for a day in the sun” exercise and race the few meters from traffic signal to traffic signal.

  10. Mary Melville says:

    re Paul: Like the Disabled Person’s Parking Permit, it is amazing how many vehicles showing this sign are parked on ‘valet’ controlled meters in my hood. However I rarely see anyone looking even slightly disabled get into these cars. The ‘valet’ probably has a stash in his back pocket.
    Note that our legislators have not focussed on the ridiculous $8ph meter charge that is a fraction of what one pays in off road parking and ensures an attractive margin for the ‘valet’ parking ops to exploit.
    But then HK’s once finest claim that they spot no proof of ‘valet’ control of the meters even though locals can easily spot the ‘valet’ topping up the meters and catching up with their ‘regulars’ like UPS and Fedex.
    If the meters were to be charged at the same rate as the off street parking, the additional revenue would certainly offset a good percentage of the $2 elderly fares.

  11. Octopus Wang says:

    The only way the HK government is gonna make themselves look good and show that the situation is now improving, is to follow the typical mainland MO – fudge the figures, lie, and then threaten anyone that challenges it.

    Cutting elderly/sick/working class/poor peoples subsidies or benefits won’t make any sort of meaningful difference, infact it’ll only increase social disorder.

    Cutting nonsense infrastructure development goes against President Xi’s grand plan.
    Cutting public sector salaries will cause mistrust and upset in the very sector that the government needs to keep ‘patriotic and loyal’.

    HK is pumping money through an untethered high-powered sprinkler, and at the same time, every single sector in the entire city is still struggling to stay afloat.

    Lies, opaqueness and a refusal for anyone to report otherwise is the only way to make it look like HK is ‘back on track’.

  12. Probably says:

    The main reason that PRC follows unfettered infrastructure projects is that it increases the GDP metric rather than just counting real productive earnings.

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