Budget | The Hong Kong Government that overestimates deficits and underestimates reserves

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Written by: Commentary Editing Room

2021-02-26 07:10

The last update date: 2021-02-26 07:10

In the past year, the public has heard officials from time to time emphasize that the Hong Kong government has a deficit of 300 billion yuan and that the fiscal reserves are "only" 800 billion yuan.

But when the Financial Secretary announced the Budget on Wednesday (24th), what he heard was not these two figures.

On December 7, the Financial Secretary, Chen Maobo, stated that the deficit for the current fiscal year "exceeded 300 billion yuan, while fiscal reserves fell to about 800 billion yuan."

On December 17, Chief Secretary for Administration Zhang Jianzong stated that "a deficit of more than 300 billion yuan will be recorded" and "fiscal reserves will be reduced to about 800 billion yuan."

On January 21, Chen Maobo once again stated that "the budget deficit has soared to the level of 300 billion yuan, and the fiscal reserves have also been reduced by nearly 30% within a year to more than 800 billion yuan."

But when Chen Maobo announced his budget on Wednesday, he said that the 2020/21 fiscal deficit is 257.6 billion yuan, which is neither "300 billion yuan" nor "over 300 billion yuan"; the fiscal reserves are 902.7 billion yuan, which is neither "over 8,000 yuan "100 million yuan" or "approximately 800 billion yuan", the year-on-year decrease in reserves is also 20.3%, which is definitely not "nearly 30%."

Who is going to compare?

Taking these two sets of figures out for discussion seems to be very caressing; considering whether "902.7 billion yuan" is "over 800 billion yuan" or not, it seems to be too literal.

Moreover, officials have always attached importance to expectation management. They talked more about deficits in advance and less about reserves, and they might win some favors when the real numbers are announced.

But the difference between 800 billion and 900 billion may be just an account number in the eyes of officials, but in fact it can have a great impact.

Take the one-month rental payment for public housing that was cancelled this year as an example. It only needs public money of 1.8 billion yuan; reduced to only half a month's CSSA, fruit grant and other additional subsidies, last year only cost the government 4.2 billion.

Even the temporary unemployment benefits considered by the Secretary General as a scourge, take the latest 7% unemployment rate as an example. Even if the 253,000 involved receive a government subsidy of 8,000 yuan and the policy is maintained for one year, the cost is only 24.8 billion yuan.

In other words, from a mathematical point of view, even if the government maintains public housing rent-free for one month, subsidizes "double pay" and introduces temporary unemployment benefits, the government deficit will not "exceed 300 billion", and fiscal reserves will not "fall by nearly 30%." ".

Although the latter is less than 900 billion yuan, it still has more than 800 billion yuan.

Moreover, the fiscal reserves of more than 800 billion yuan are not a small amount at all.

According to estimates in the Budget, even if deficits continue to be recorded in the next five years, fiscal reserves can still be maintained at more than 775 billion yuan.

However, the officials of the Hong Kong government are still only concerned about the treasury. To manage the public's expectations of deficits and reserves, they must compare the expenditure of helping the grassroots.

From this point of view, whether the deficit is 900 billion or 800 billion is not actually a question of numbers, but it shows the mentality and thinking of those in power in Hong Kong.

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