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Buzz… Work in Progress

The consultation work for the Budget is now proceeding at full steam. We have been meeting representatives from sectoral organisations, professional bodies, political parties, think tanks and chambers of commerce, etc to discuss the various challenges ahead of different sectors and our society, and exchange views on Hong Kong’s economy and the government's financial situation. On top of these formal consultation sessions, I also walked into the community from time to time to chat with citizens and listen to their expectations for the Budget directly.

These consultations have provided a lot of references and ideas for the preparation of the Budget. I will channel back the suggestions to relevant policy bureaux to consider their feasibility, with a hope that the Budget initiatives can address people’s concerns. Even though some suggestions may be more complicated and cannot be included in the Budget, the process still provides an opportunity for the bureaux to understand the views and voices of people on different policies.

Some people may think that conducting consultation sessions is a routine exercise of no practical use. Yet the truth is, we did put feasible recommendations into practice. For example, during a consultation session with a group of secondary students acting as "Junior Financial Secretary" last year, a student suggested that additional resources be provided to schools for strengthening learning support on STEM subjects. That idea was then translated into last year’s Budget initiative of allocating $1 million to each aided secondary school for setting up an "IT Innovation Lab", which offers students with more chances to learn about information technology through extracurricular activities.

Among the many consultation sessions already held this year, the session with "Junior Financial Secretary" from secondary schools remains an exciting occasion. More than 70 students from different secondary schools put forward to me their specific proposals relating to seven areas covering land and housing, health care, education, diversified economic development, government revenues, environmental protection and caring and sharing community, which I have been deeply impressed.

Last week, I was invited to join another very special "consultation session", which was a group dinner for elderly living alone. Most of the participants were older than me, and one of the “most senior" participant is over a hundred years old. While sending our best New Year wishes to those "old friends", I also listened to their thinking so as to understand the expectations and needs of the elderly.

We all hope to make a good living in Hong Kong, and the society has been growing sustainably to be more people-oriented, supporting those in need. This is also the most important factor I have taken into account when considering the allocation of public resources. However, public resources are limited and cannot fulfil all the needs. Trade-off decisions are therefore unavoidable. In addition to allocating resources, good coordination in policy and execution is also essential to enable the smooth implementation of measures and prudent use of public resources, bringing benefit and good user experience to the public.

While the government is committed to spend resources on developing the economy, improving people's livelihood and strengthening public services, we also have to consider our financial affordability and capability. Looking forward, the downward pressure on Hong Kong's economy in the coming year will be huge, and the employment situation is expected to deteriorate in the coming few months. The government is facing a decline in revenues but an increase in expenditures. The current fiscal year ending end March this year will have the first fiscal deficit account in 15 years. While some people may comment that the government is able to spend a lot more given our sound fiscal reserves, I believe we are all reluctant to see consistent and large-scale budget deficit in the government accounts. We have to carefully manage future fiscal deficits to avoid any sharp and continued increase as it is pivotal in ensuring the confidence of citizens and market in the soundness and stability of public finance, as well as the stability of the Hong Kong dollar exchange rate and the financial system.

It has never been easy to manage public finance and allocate public resources prudently. In every consultation and exchange session I attended, I adopted an open mind with a view to gauging more opinions. The 2020-21 Budget will be released around one month from now. Just like the "little bee" serving as the consultation ambassador for this year's Budget, we will continue to fly around to listen to your views and insights.

January 12, 2020