Paul Chan’s surplus plan leaves Hong Kong analysts mixed on his fiscal approach

Funds allocation seems to differ from John Tsang’s conservative stance, but critics say it may not really count as form of investment

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Financial Secretary Paul Chan sought to differentiate his fiscal approach from that of predecessor John Tsang. Photo: Xiaomei Chen

Published: 11:15pm, 22 Feb 2017Updated: 6:19pm, 23 Feb 2017

Financial Secretary Paul Chan Mo-po has promised to earmark two-thirds of the HK$92.8 billion surplus on elderly services as well as sports and innovation, as he seeks to demonstrate that his fiscal philosophy is different from his predecessor, chief executive hopeful John Tsang Chun-wah.

The move was seen as a departure from Tsang’s approach of investing part of previous surpluses in a Future Fund. Chan declared that the government “can afford to be more proactive” and invest continuously in the city’s future.

Chan also promised to more accurately project land revenue by basing it on the average proportion of land revenue to the city’s gross domestic product over the past 10 years – the resulting figure of 3.3 per cent of GDP is seen as “more aggressive”. Tsang had been criticised for his underestimation of the revenue, which was based on a lower average percentage over the past 30 years.

These statements from the financial chief drew mixed views, with some economists acknowledging that Chan has distinguished himself from Tsang, while others remained sceptical.

The finance chief’s statements drew mixed views from economists. Photo: Dickson Lee