The government will focus on cutting expenditure to tackle a fiscal deficit, Financial Secretary Paul Chan said. As the deficit for the current fiscal year is expected to reach just under HK$100 billion, Chan wrote in his weekly blog that public works projects will be prioritised, with the Northern Metropolis as well as housing and economic development projects getting resources first. For other infrastructure projects, the government will raise capital by issuing bonds and through public-private partnership, he added. Apart from further controlling the spending of various departments, Chan said the government will review certain funding schemes that could affect the public coffers. “It is inevitable for us to look into some funding schemes as their expenditure growth will bring significant long-term impact to the public finance,” he said. The finance chief said various departments will be asked to further control their spending, including reallocating resources and prioritising works to better meet the needs of society. “Increasing revenue and reducing expenditure is the key to improve public finance,” he said. “Our strategy will focus on cost-cutting, in which we will control the increase in recurrent expenditures, under the premise of maintaining and improving public service.” On ways to boost revenue, Chan stressed the need for the government to stick to a low and simple tax system to order to maintain Hong Kong's competitive edge. He also said officials will follow the user pays principle, so as to minimise the impact to the average people.
