Education the great equaliser: FS
February 03, 2012
Financial Secretary John Tsang says his 2012-13 Budget proposals seek to benefit Hong Kong people from all walks of life, noting that education spending will help even the less well-off improve their living standards.
Speaking on an RTHK morning phone-in show, Mr Tsang said the government is extremely concerned about Hong Kong’s grassroots.
“What we believe is that in the long term we must improve the economy so that everybody can get a better quality of living. But in the medium term, the great equaliser is education, and education is the biggest spending item that we have,” he said.
“I do not believe that giving more hawker licences is going to bring more people to the middle class. What we need is to help their children through education so that they can improve their lot in the medium term.”
He noted the needy would benefit from the proposed increased recurrent spending on public services, including education, welfare and healthcare.
“Spending in the past five years rose 70%. Look at any other economy, that is a very large outlay of resources. More importantly in terms of recurrent expenditure, it went up 33%. During this period of time, GDP only grew about 21%,” he said.
“So there is real growth, particularly in areas that concerns livelihood of people, in social welfare, in medical, in education. They grew by about 30% over this period, and that is exactly what would affect the welfare of the people in the longer run.”
He also pointed to capital expenditure, which had nearly tripled during the five years he has served as the Financial Secretary.
“From when I started, from about $20 billion a year, this year we are spending over $60 billion, and in the next few years we are spending about $70 billion. And this will increase the capacity of Hong Kong, increase the connection of Hong Kong with the Mainland. I think that will do our future a lot of good,” he said.
People tended to focus on the one-off measures, he said, noting they account for only a small part of the budget.
Difficult times ahead
He again warned of difficult economic times ahead, suggesting that Hong Kong’s economy could go into negative territory in the first quarter as consumption demand from Europe and the US continues to fall.
A fall in trade also affects the service industries, in particular transportation and logistics.
“So that is going to be big, and we need to be prepared for that. And the basis of this budget is to prepare for such an impact,” he said.
In response to a question, Mr Tsang said Hong Kong did not have a “high land price policy”.
“The land price is the market price. We don’t try to sell land cheap. If we did that we would get even more criticism. That is what the market demands and that is what they are willing to pay. Land income is not our major income,” he said.
He noted the brunt of the Government’s income is generated from profits and salaries taxes.
“This past year, our profits tax was about $120 billion, our salaries tax was over $50 billion. Stamp duty was much, much less than that. Land income this year was about $80 billion and this was a very special year,” he said.
