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Happy Chinese New Year

May I wish you all a healthy, prosperous and happy new year!

Chines New Year is approaching. Heading towards the year of Tiger, may I wish you all a healthy, prosperous and happy new year!

There are many traditions to celebrate Chines New Year, one of them being gathering with family members and friends. However, given the threat of the latest outbreak, we should avoid gatherings among families and going to crowded places in order to minimise the risk of infection. The latest COVID variants have been spreading quickly in the community and pose threat to public health, people’s daily lives and economic activities. We have to join hands and work together in order to win this battle against the virus.

Looking back at Hong Kong’s past development path, though we had faced different challenges at different stages, still we succeeded in overcoming them and turned crises into opportunities. The success we have achieved today is not only the result of Hong Kong people’s strong determination, aspiration and relentless effort, but also the support of our Country, which allows Hong Kong to perform its strength to serve the Country’s needs and prompted Hong Kong to achieve an even greater success. In face of great challenges or even crises, we have to make careful assessment of the imminent problems and foreseeable situations, so that we could plan and prepare for the worst scenario and tackle it in a prudent manner. Only by doing so could we best serve all the Hong Kong citizens and provide a stronger support for Hong Kong’s steady progress. With comprehensive and sufficient forecast and preparation, we could stay calm in any challenges and sail through them with courage.

As such, we need your full cooperation in fighting against the virus, including complying with the testing and quarantine requirements. Only by identifying the sources of infection in a comprehensive manner could we cut off the chains of infection to the largest extent quicky and contain the pandemic. I would like to appeal all of you again to encourage your families and friends to get vaccinated, which is not only the most effective mean to protect yourselves and your families, but also the ultimate way to help the society restore normal operation.

As for public finance management, we are sharing the same philosophy. The Hong Kong economy is under great pressure due to the latest outbreak, and many people have seen their jobs and income affected and are worried about the economic prospect. Facing this uncertain environment, we still could stay positive and make our biggest effort to deliver the best outcome for the people. For example, in my Budget last year I enhanced the Special 100% Loan Guarantee Scheme to enable SMEs to have easier access to loans in the market with a view to alleviating their cash flow pressure. We also provided 100% personal loan guarantee to unemployed individuals to tide them over. Moreover, we launched the Electronic Consumption Voucher Scheme which, with the concerted effort of different parties, has succeeded in boosting local consumption and people's confidence, and promoting the wider use of e-payment. As the economic recovery in 2021 was better than expected with improving trend shown in various economic sectors, Government revenue in this soon ending fiscal year will be much higher than expected.

In fact, as shown in the Government’s monthly financial results, the actual consolidated deficit of this fiscal year had gradually receded from the peak of HK$115.7 billion for the six months ended September 30 2021 to HK$65.8 billion for the eight months ended November 30 2021, taking also into account the receipt of net proceeds of around HK$29 billion from the issuance of Government green bonds.

Then how about the financial results for the nine months ended end December last year, which will be announced in this week? As December to January is the peak period of receipt of profits tax and salaries tax, and the investment return of our fiscal reserve placed with the Exchange Fund is credited to the fiscal account in December, it is not unforeseeable that the Government’s financial results as at end last December will be further improved substantially. Nonetheless, we cannot deduce the Government’s full-year financial results on that simple basis. It is because the Government still has to make large expenditure to maintain its daily operations in the remaining three months of the current fiscal year. Past experiences indeed showed that Government’s expenditure usually exceeds its revenue in February and March.

On the other hand, the global market is facing the threat of the pandemic over the economy, the society and people’s livelihoods; possible risk brought by inflation and interest rate hike including impact to capital flow and asset price; as well as geopolitical tensions. All these factors coupled together have led to a more complicated and changeful outlook for the global economy. When preparing the upcoming Budget, my team and I will make careful study and dynamic assessment on these uncertainties. Our major principle is to provide support to the economy and people’s livelihoods under the pandemic, and take account of the mid to long term development needs and financial stability of Hong Kong. In this course, we have to strike a careful and right balance between the long term and the pressing needs, so that Hong Kong could strive for progress.

In this new year of Tiger, we may also learn from tigers for their vigilance, sharpness and decisiveness. May I wish you all a healthy, prosperous and happy Chinese New Year!

30 January, 2022