Hong Kong must invest in megaprojects such as the Northern Metropolis to drive economic growth even if they cause deficits, the finance chief has said, while appealing to the understanding of the middle class with few sweeteners.
Financial Secretary Paul Chan Mo-po further explained his fiscal philosophy on Thursday, saying that keeping expenditure within the limits of revenues should be the basis for managing the government’s operating account.
While it was the government’s target to achieve a surplus in the operating account, Chan said the capital account with deficits should be used for future investments, including infrastructure projects and expanding economic capacity.
“I believe that the money should be spent when needed. If this is the crucial time for Hong Kong’s future development, it will be inappropriate not to seize this opportunity to invest in the future and create opportunities for the future,” he told a radio programme.
“As long as we have a plan that supports our development and gradually reduces the deficit, aiming to restore balance over time, I don’t see any problems with it.”
According to the budget announced on Wednesday, the capital account is expected to record a deficit over the coming five financial years, with an average annual expenditure of HK$120 billion (US$15.5 billion) on public projects over the next five years, up from HK$90 billion last year.
