The Limited Times

Now you can see non-English news...

[Budget 2020] Chen Maobo sends money and closes the back door: fiscal deficits continue to run out of reserves

2020-02-26T07:00:06.979Z


The Financial Secretary, Chen Maobo, today (26th) announced a budget, announcing that the whole people will send 10,000 yuan. He had already predicted a fiscal deficit beforehand and announced that it would have a fiscal deficit of 37.8 billion yuan this year. He also expected that the fiscal deficit for the next year (2020/21) would reach 139.1 billion yuan. If it is true, it will be the highest deficit ever recorded by the SAR government. Chen Maobo indicated that the vast majority of the 100 billion deficits were related to cash distribution plans and other one-off relief measures. Under the strong demands of the major parties, Chen Maobo finally sent money to the whole people. However, Chen Maobo also warned in his speech that the government's fiscal reserves will be equivalent to 22 months of government spending at the beginning of the year, and will be reduced to 16 months in a year. If the fiscal deficit continues to occur, the reserve will "finally run out of day". It is implied that sending money is only a one-time special measure, and "closes the back door" for being forced to send money again next time.


Politics

Written by: Lin Jian

2020-02-26 14:50

Last updated: 2020-02-26 14:50

The Financial Secretary, Chen Maobo, today (26th) announced a budget, announcing that the whole people will send 10,000 yuan. He had already predicted a fiscal deficit beforehand and announced that it would have a fiscal deficit of 37.8 billion yuan this year. He also expected that the fiscal deficit for the next year (2020/21) would reach 139.1 billion yuan. If it is true, it will be the highest deficit ever recorded by the SAR government. Chen Maobo indicated that the vast majority of the 100 billion deficits were related to cash distribution plans and other one-off relief measures.

Under the strong demands of the major parties, Chen Maobo finally sent money to the whole people. However, Chen Maobo also warned in his speech that the government's fiscal reserves will be equivalent to 22 months of government spending at the beginning of the year, and will be reduced to 16 months in a year. If the fiscal deficit continues to occur, the reserve will "finally run out of day". It is implied that sending money is only a one-time special measure, and "closes the back door" for being forced to send money again next time.

▼ "Budget 2020" measures ▼

+17

+16

+15

Next year's fiscal deficit is expected to reach 139.1 billion.

Chen Maobo said that due to the impact of Sino-US trade frictions and violent shocks, Hong Kong's economic momentum has weakened significantly. In the past 6 months, he has announced a total of 4 rounds of relief measures involving more than 30 billion yuan. Together with the recent 30 billion yuan epidemic prevention fund established in response to the new coronavirus epidemic, a deficit of approximately 37.8 billion yuan will occur in 2019/20, which is equivalent to approximately 1.3% of GDP. This is the first time in 15 years for Hong Kong. Fiscal deficits.

Chen Maobo said that although he is very confident in Hong Kong's fundamental advantages and long-term prospects, he cannot but carefully evaluate the impact of the current situation on the government's revenue in the coming year, and he expects revenue from taxation and land sales to decrease. Coupled with his earlier premise, larger counter-cyclical fiscal measures and increasing recurrent expenditure, the fiscal deficit next year is expected to be 139.1 billion yuan, equivalent to 4.8% of GDP. Checking the information, the SAR government's highest deficit in the past appeared in 2001/02, totaling 63.3 billion yuan.

Indicating that "the reserve will eventually run out one day" implies that there is no next time to send money?

Even in response to the major parties' demands for 10,000 yuan for the entire people, Chen Maobo also stated in his speech that the government will face some financial pressures in the face of deficit budgets. "Hong Kong's current fiscal reserves are about $ 1.1 trillion, giving us the ability to launch special measures, such as cash distribution, in times of economic adversity. However, such special measures and increasing expenditures will consume fiscal reserves. Take 2020/21 as an example, the reserve will be reduced to 16 months in a year from the beginning of the year equivalent to 22 months of government expenditure. If the fiscal deficit continues to occur, the reserve will eventually run out. This is not what we would like to see . "

It is also worth mentioning that Chen Maobo expects a fiscal deficit of 139.1 billion yuan next year, which is equivalent to 4.8% of GDP. When responding to the Budget opinion earlier, Chen Maobo repeatedly stated that he did not want the fiscal deficit to exceed 3% of GDP. If the forecast is true, this restriction will be broken.

In fact, previous budgets have also announced fiscal deficits exceeding 3% of GDP. In 2002, the then rich man, Liang Jinsong, announced that the fiscal deficit for the year was 65.6 billion yuan (later revised to 63.3 billion), accounting for 5.6% of GDP. In 2003, Liang Jinsong estimated in the budget that the fiscal deficit for the year would reach 70 billion yuan (the It was revised to 61.7 billion), accounting for 5.5% of GDP.

[Budget 2020] The people will spend 10,000 yuan on 71 billion yuan of expenditure without bringing long-term burden

[Budget 2020] Tang Yingnian: All the people believe that the money will help ease the social atmosphere

[Budget 2020] Chen Maobo's amount of money revealed: 10,000 yuan for the whole people

2020 Budget Chen Maobo sends money

Source: hk1

All news articles on 2020-02-26

You may like

News/Politics 2024-02-23T08:21:57.445Z
News/Politics 2024-02-10T01:53:04.958Z
News/Politics 2024-02-01T07:11:54.879Z

Trends 24h

News/Politics 2024-03-27T16:45:54.081Z
News/Politics 2024-03-28T06:04:53.137Z

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.