appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Alice Wu

Last week, Hong Kong released its hardest budget yet. It’s hard because of the need for austerity measures that most previous budgets didn’t face.
This city used to have reserves other economies could only dream of. Some may remember when the budget spotlight used to be on accusing the financial secretary of being a miser, for hoarding the incredible surplus and not sharing enough of the wealth with people.
For the sake of our younger readers and those with shorter memories, let’s indulge in a quick trip down memory lane. Once upon a time in Hong Kong, our budget surpluses – like our budget deficits of recent years – were often underestimated, so much so it became a joke. Former financial secretary John Tsang Chun-wah would poke fun at himself for consistently getting it wrong.
At a meeting a decade ago, where executives discussed ways of generating sufficient revenue in the face of an ageing population and dwindling tax base, Tsang joked that “the answer is to continue to have me as financial secretary”, since with him, we could count on having more than expected.
The most ridiculous budget estimate was for 2010, when the government forecast a HK$25.2 billion deficit and ended up with a HK$75.1 billion surplus. Ending up with five or six times more than expected was the norm then.
To give credit to our current financial chief, Paul Chan Mo-po only underestimated our latest deficit by HK$39.1 billion: he predicted a HK$48.1 billion deficit last year and it turned out to be HK$87.2 billion (US$11.2 billion) instead.




But it should not be a guessing game. Gross miscalculations in these forecasts indicate a misreading of the economy, and leads to misallocation of government resources.
So what we did we do with all the cash we once had stored away for rainy days? We squandered it.
One big focus of this year’s budget is how to rein in the cost of the HK$2 transport subsidy for the elderly, after the previous administration rashly lowered the age threshold to 60 years from 65. Subsidising transport costs for the elderly is a well-intended policy; it’s the expansion of the scheme that counts as squandering and which is making it harder to afford.
Even without the expansion, the scheme was due for a review given the stream of rising fares approved by the government. The measures introduced in the latest budget are sensible. However, the need for 18 months to update Octopus readers to accommodate the change calls into question government efficiency.

But that’s not the only austerity measure being criticised. Parents are angry at the scrapping of the HK$2,500 student grant for children in kindergarten and primary and secondary schools. Why is a government that says it wants to encourage childbearing unwilling to support parents in their children’s schooling?
Questions are also raised over the cuts to university funding and the decision to claw back HK$4 billion from university reserve funds. Not only are our universities, supposedly the core of the higher education hub the government wants Hong Kong to be, deemed not deserving of more resources but they are being punished for financial prudence.
Our government is not putting its money where its mouth is when it comes to promoting childbirth, developing the city into a regional university hub and the like. And with the bulk of austerity measures targeting the elderly, children, families and education, for the government to exempt itself from cost cuts is not a good look.




The blow could have been cushioned by principal officials taking voluntary pay cuts as a show of political resolve to stand with the people in these hard times. But the government has not budged.
A pay cut would not have “saved” much money; it is more of a political move, but an important one. Against the backdrop of having refused to even consider this, the government’s latest move to freeze civil service salaries is simply not enough.
Add the fact the government has increased the budget for itself, including a 7.8 per cent increase for the Chief Executive’s Office over the previous year’s expenditure and over 20 per cent more for the Constitutional and Mainland Affairs Bureau, among many others, and this is a budget the public will find very hard to stomach indeed.
Yes, that’s right. The government is spending more on itself. And so much for streamlining processes and increasing efficiency. But hey, at least that’s really bold.


How has John Lee’s promise of a ‘new chapter’ for Hong Kong held up?

The 2026-27 Budget is pushing HKEX’s expansion in cross-border trading

Hong Kong government forks out two-thirds of HK$90 million tab for HK$2 fare revamp

Why China’s economic reset is a credibility test for Hong Kong

Hong Kong budget 2025-26

Why Hong Kong’s austere budget is hard for the public to swallow

Hong Kong’s Financial Secretary Paul Chan Mo-po holds a press conference at the government headquarters after delivering the 2025-26 budget on February 26. Photo: Elson Li

A bus shop at Nathan Road in Tsim Sha Tsui on February 24. The government has approved a series of bus fare increments in recent years. Photo: Jelly Tse

Hong Kong’s Paul Chan should have been ‘bolder’ in his budget, economists say

Hong Kong Financial Secretary Paul Chan speaks at a press conference after presenting the budget for 2025-26. Photo: EPA-EFE

Xia Baolong (centre) met finance chief Paul Chan and other ministers ahead of the budget in February. Photo: Handout

Chan pins hopes on innovation in testing budget that seeks to bring gains from pain

Paul Chan, seen in a press conference about the budget on Thursday, is facing economic headwinds in Hong Kong. Photo: Elson Li

Hong Kong Financial Secretary Paul Chan delivers the budget on Wednesday. Photo: Robert Ng

Budget calls for bold route to be taken on Hong Kong transport subsidies

As fares continue to rise and more people qualify for the subsidy each year, the burden on public coffers will only grow. Photo: Eugene Lee

Budget 2025: how much will Hong Kong save and does plan differ from past?

Some residents have complained about a lack of sweeteners and the loss of a HK$2,500 annual student grant. Photo: Jelly Tse

Finance chief Paul Chan delivers the budget speech on Wednesday. Photo: Elson Li

The government will press on with the Northern Metropolis megaproject near the border with mainland China. Photo: May Tse

Opinion

Hong Kong Opinion

News

Hong Kong

Hong Kong Economy

With the bulk of cost-cutting aimed at the elderly, children, families and education, for the government to exempt itself is not a good look


With the bulk of cost-cutting aimed at the elderly, children, families and education, for the government to exempt itself is not a good look.


Paul Chan

Hong Kong politics

John Tsang

Salaries

Hong Kong society

Universities in Hong Kong

Hong Kong transport

John Lee

Education in Hong Kong

Hong Kong children

Hong Kong economy

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Why Hong Kong’s austere budget is hard for the public to swallow

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}With the bulk of cost-cutting aimed at the elderly, children, families and education, for the government to exempt itself is not a good look

With the bulk of cost-cutting aimed at the elderly, children, families and education, for the government to exempt itself is not a good look