Budget ︱ Chen Maobo: There is no hard target for reserves, lamenting that it is easy for the government to use money to save money

Political situation

Written by: Lin Jian

2021-03-01 10:54

The last update date: 2021-03-01 10:55

[Budget 2021] The Financial Secretary, Chen Maobo, mentioned during a Newtown Radio program today (March 1) that the government will still consider both short-term and long-term policy inputs despite the record-breaking deficit this year.

He mentioned that the government does not have a so-called "red line, hard target" for fiscal reserves, but it still has to retain a certain level of strength and have enough strength to "withstand" and defend the linked exchange rate system in the event of a problem.

He also said frankly that the government "is very difficult to save money, and it is easy to get up if something happens."

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Refers to Hong Kong's income volatility and the need to maintain financial strength

Chen Maobo said that the budget needs to take into account the immediate economic difficulties, long-term economic development, and safeguard the linked exchange rate system. Therefore, it is necessary to invest resources in future industrial development and to cater for the current needs of the public.

He recalled that he had heard suggestions in a consultation meeting suggesting that it is better to phase out sugar distribution measures and keep reserves for different policies, such as retirement protection. However, there was an immediate rebound in the same field, saying "I don't want to reduce it." So The government needs to take into account short- and long-term measures.

He said that there is no so-called "red line, hard target" for government fiscal reserves. Otherwise, once a figure is set, everyone "has been surprised before the time has come." The standard for always reserves will change from time to time according to the scale of the economy.

However, Chen Maobo mentioned that everyone can refer to the government's mid-term forecast. Until 2025/26, the reserve is expected to be around 770 billion, which is equivalent to about 11 to 12 months of government expenditure.

But he reminded that this figure already includes the government's future bond issuance of about 175.5 billion yuan and the transfer of about 100 billion future funds back to fiscal reserves, otherwise the reserves will further fall to 500 billion yuan.

He sighed: "This time, within two years, our reserves have dropped from 23 months of government expenditure to 13 months. So sometimes it's hard to save money, and if something happens, it's so fast to get up." Two, Three years ago, it was often said that Hong Kong had a structural surplus. To find a way to get the money out, in fact, as a small traditional economy, income fluctuates greatly, and operating expenditures are also quite large. Chen Maobo said that the government needs to have a long-term view of the overall situation. It is still important to maintain a sound financial strength.

Regarding the form of issuance of electronic consumer vouchers, Chen Maobo mentioned that he has received different opinions recently. Some people say that one-off distribution, while others say that the instalment issuance has the greatest driving force for the economy. Everyone speaks differently. The government will try to take into account the needs of different citizens and reiterate the specifics. There is room for adjustment in how many phases, and we will further understand the hardware technical capabilities of different electronic payment platforms.

Chen Maobo.

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Talk about increasing stamp duty on stocks: limited impact on general investors

When asked whether the increase in car license fees and first registration tax in this budget is aimed at the middle class, Chen Maobo pointed out that the car license fee has not been increased for 30 years, and the first registration tax has not been increased for 10 years. The government sees that the car is growing too fast. It needs to be suppressed, but the government’s preferential policies have been increased for the "one-for-one" exchange of electric vehicles to traditional fuel vehicles. I believe it can encourage car owners to switch to electric vehicles. The government will cooperate in different policies.

As for increasing the stamp duty rate on stocks from 0.1% to 0.13%, Chen Maobo said that for ordinary investors, the growth rate is not too burdensome, because their investment mainly depends on the appreciation potential and dividends. The tax increase is mainly for some high-frequency trade fairs. influential.

However, he said that the government has comprehensively considered the impact on competitiveness. In the past few years, the Mainland’s economy has developed rapidly, and global investors are looking forward to Chinese concept stocks. In this regard, Hong Kong is a very important investment market. There are few other fees, and I believe that Hong Kong's long-term competitive advantage is still there.

He also pointed out that different voices have been heard in the past, saying that high-frequency trading will cause excessive market volatility.

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