In his Budget speech, held on Feb. 28, Financial Secretary Paul Chan emphasized the Hong Kong Government's commitment to bolstering the economy and enhancing public services in the face of a complex external environment. As revenues related to asset markets in Hong Kong require time to recover fully, the Government will continue to allocate resources to sustain momentum in the economy and support vital public services.
For the fiscal year of 2024-25, Chan expects a deficit of HK$48.1 billion, a number taking into account the Government's $120 billion bond issuance. The fiscal reserves are projected to decrease to HK$ 685.1 billion, indicating the Government's dedication to investing in economic growth and public welfare.
Livelihood-related policy areas, such as health, social welfare, and education, will receive substantial resources, accounting for 59.3% of recurrent expenditure. Non-recurrent expenditure is anticipated to decrease significantly in the aftermath of the pandemic, highlighting the Government's focus on long-term sustainability.
On the revenue front, Chan anticipates a rise in earnings and profits tax, land premiums, and stamp duty compared to the revised estimate for 2023-24.
To end the speech, it has been announced that a fiscal consolidation program is being formulated. This strategy aims to gradually restore fiscal balance and maintain prudent levels of fiscal reserves for the Hong Kong economy.
The revised estimate of government revenue for 2023-24 stands at HK$ 554.6 billion, a 13.7% decrease from the original estimate, primarily due to softened asset markets affecting revenue from land premiums and stamp duty. Meanwhile, expenditure for the same period is HK$ 727.9 billion, reflecting a 4.3% decrease attributed to the post-pandemic period.
