The government has doubled its estimated deficit for the current financial year to around HK$100 billion, citing lower revenue mainly due to poor asset market performances. When Financial Secretary Paul Chan announced his budget in February, he forecast a shortfall of a little more than HK$48 billion. But he told lawmakers on Monday that as well as relatively poor asset market performances, revenue from profits tax is lower because firms aren't doing too well at present. He said the latest estimate was made after considering revenue from government bonds and repayments due. "Due to geopolitical tensions and other uncertainties, the asset markets continue to be under pressure and this has somewhat affected the revenue from land sales and stamp duty," Chan said at a financial affairs panel meeting in the legislature. "We'll continue to consider our fiscal balance as well as long-term needs of our society. We'll put in place arrangements with a view to restoring fiscal balance in the coming few years." He said SAR officials have met credit rating agencies and they agree with the government's assessment that it shouldn't try to reverse the deficit in one to two years as that would "bring a major shock to the society". Chan said the government is conducting transitional fiscal consolidation, mainly by cutting expenditure, while raising revenue is considered to be supportive only. The minister said US President-elect Donald Trump's economic policies could contribute to global uncertainties next year. Chan said Trump's threat to impose new tariffs against different countries, including China, could affect Hong Kong's re-exports of mainland goods to the US. The secretary also reassured lawmakers that they need not worry too much about the government's dwindling fiscal reserves, saying the key is "taking care of our own business".
