Letters | To help coronavirus-hit Hong Kong tide over lean times, fatten public coffers with higher betting duty

On February 14, the Hong Kong government announced funding worth HK$25 billion to alleviate the economic hardships resulting from the coronavirus outbreak, which this week was increased to HK$30 billion. This followed a welfare package amounting to HK$10 billion which was rolled out in January.

On February 16, Financial Secretary Paul Chan Mo-po warned that Hong Kong is likely to see its biggest-ever budget deficit in the next fiscal year as it deals with the impact of the coronavirus outbreak and the months-long protests that have helped push the city into recession.

The Hong Kong economy contracted 2.9 per cent year on year in the last quarter of 2019 and 2.8 per cent in the third quarter, due to weak domestic and external demand amid the violent anti-government protests and the US-China trade war. Advance estimates showed private spending decreased 3 per cent, gross fixed capital formation slumped 16.2 per cent, and exports and imports went down 2.6 per cent and 7.2 per cent respectively. In 2019, Hong Kong’s gross domestic product contracted 1.2 per cent, the first annual decline since 2009.

The financial secretary will deliver his budget speech next week and, writing on his blog, he said the government would have to pay more attention to financial sustainability and not spend beyond its means in future.