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Hong Kong releases long-term fiscal planning findings

The comprehensive fiscal sustainability appraisal on the government's budget looks beyond the short to medium term, to prepare Hong Kong to cope with the aging population and maturing economy.

The Working Group on Long-Term Fiscal Planning released its report on the fiscal sustainability of the public finances in Hong Kong, covering the long-term trend projections on economic growth, government revenue and expenditure for the coming two to three decades.

“The Working Group’s report is the first comprehensive fiscal sustainability appraisal on the government's budget since 1997-98. It provides a basis for the government and the community to look beyond the short to medium term, and to consider policy choices that would best prepare Hong Kong to cope with the challenges and opportunities of an aging population and a maturing economy,” said Ms. Elizabeth Tse, who is the Permanent Secretary for Financial Services and the Treasury and chaired the working group.

(From left) Government Economist Helen Chan; Senior Adviser of PricewaterhouseCoopers, Marcellus Wong; Managing Director, Asia Pacific Insurance Sector of Towers Watson, Mark Saunders; Research Professor and Emeritus Professor of Economics of the Chinese University of Hong Kong, Professor Liu Pak-wai; Chairwoman of the Working Group on Long-Term Fiscal Planning Elizabeth Tse; Head and Professor, Department of Economics, School of Business and Management of the Hong Kong University of Science and Technology, Professor Francis Lui; Partner at KPMG Jennifer Wong; and Director of Accounting Services Martin Siu at the news conference on the report of the Working Group on Long-Term Fiscal Planning.

The Working Group concludes that the current state of Hong Kong’s public finances is healthy. That said, the Working Group considers that Hong Kong can ill afford to continue spending beyond the pace of economic growth and revenue.

Drawing on the experience of seven selected economies (namely Australia, Canada, Germany, Japan, Singapore, Switzerland and the U.K.) in fiscal consolidation, the Working Group has recommended the adoption of a comprehensive package of fiscal measures to cope with the challenges ahead. These include: containing the growth of government expenditure, broadening the revenue base and exploring the feasibility of turning the Land Fund into a “Future Fund” or savings plan for the future generation.

 


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