Hong Kong’s government budget16 February, 2008, 15:43. Posted by Zarathustra
Tags: Economy, Hong Kong, Politics & Society
Last year, our government ran a budget surplus of tens of billions Hong Kong dollar.
The problem of how to make good use of the budget surplus (if there is any) is bound to be political. Politicians always ask for things like tax rebate in order to "return the wealth to the citizens".
As I have written on that before, our government has been doing pro-cyclical fiscal and monetary policies in the past for so many years, which hugely exaggerated the ups and downs of the business cycle. And I think they will do so again.
If any of you have read Alan Greenspan’s autobiography, the U.S. government ran a big budget surplus in President Clinton time. His personal suggestion to use the surplus was to pay off the debt of U.S. government, the the president packaged this as "save social security first", which looks politically attractive.
Hong Kong does not have anything comparable to social security in Hong Kong. We only have a totally pointless Mandatory Provident Fund, and it is certainly not as comprehensive as social security. As a modernized city, we face problems of many developed countries. Declining birth rate and death rate causing the increase of number of elderly. There will be important implications. It will cost much of the society in the social welfare and medical care. We need money.
I always wonder, why there seems to be no one suggesting that our government should make use of the budget surplus to improve the social security issues in Hong Kong. In particular, it seems that people have been arguing for the reform in health care in Hong Kong, and particular in the future health care financing. I don’t know if my idea is premature or what, but why the government cannot use the surplus to set up a fund for health care financing purpose? Why it has to be distributed back to the citizens to make the economy to over-heat!?
I hope someone reading this article would try to put forward the use of surplus for the future social security and health care financing purpose in Hong Kong.