|
Finance Secretary Paul Chan said during a budget speech that
there would be a “cumulative reduction” of government recurrent
expenditure by 7% from now until 2027-2028. Hong Kong’s deficit
had reached $87.2 billion Hong Kong dollars ($11.2 billion) for
the financial year of 2024-2025, making it the third straight
year of losses.
“It gives us a clear pathway towards the goal of restoring
fiscal balance,” Chan said.
He said 10,000 civil servant posts would be cut by April 2027,
representing a reduction of about 2% of the civil service in
each of the next two years. Salaries will also be frozen in the
civil service this year.
Chan also said that up to $195 billion Hong Kong dollars ($25
billion) worth of bonds will also be issued in the next five
years to ensure progress of important infrastructure projects,
with more than half used to refinance sort-term debt.
To boost income, Hong Kong will also raise its airport departure
tax from 120 Hong Kong dollars ($15.50) to 200 Hong Kong dollars
($25.70) from the third quarter of the year, representing a 67%
increase.
Separately, Hong Kong will also make a push into artificial
intelligence by leveraging the city’s “internationalized
characteristic to develop Hong Kong into an international
exchange and co-operation hub for the AI industry.”
Authorities have also earmarked $1 billion Hong Kong dollars for
an AI research and development institute, and will set up a $10
billion ($1.29 billion) innovation and technology fund to invest
in “emerging and future industries of strategic importance.”
Hong Kong’s finances have been impacted by a weak property
sector, as home prices plunged some 30% over the last three
years. It is also grappling with economic uncertainty and
geopolitical tensions as U.S.-China relations deteriorate.
The amount of land premiums paid by developers to the government
has declined, hurting Hong Kong’s revenues. Land sales typically
made up about a fifth of government income, but this has fallen
to just above 5% in the last fiscal year.
Hong Kong’s fiscal reserves will shrink 12% from $734.5 billion
Hong Kong dollars ($94.5 billion) to about $647.3 billion Hong
Kong dollars ($83.3 billion) by the end of March, and a further
10% in 2025-26, Chan said.
All contents © copyright 2025 Associated Press. All rights reserved
|
|
