Paul Chan’s budget must dish up a better future for Hong Kong

After years of promising to diversify the economy and improve liveability, the government must put its money where its mouth is – especially as Hong Kong faces its biggest disruption in decades

Alice Wu

Published: 6:45am, 22 Feb 2021

Why you can trust SCMP

Hong Kong Financial Secretary Paul Chan Mo-po has been treading carefully when it comes to the budget. He has, in the past, done well in managing expectations. Continuing the theme of him cooking up dishes for the people, Chan has recently been working the media circuit to dismiss the idea of further government handouts.

He was especially clear when he used the Cantonese saying which translates as “watching what we eat” – living carefully within one’s means.

Hong Kong had such a fat public purse, with overflowing reserves for so many years, that it was and remains an envy for many. But the city has taken quite a hit from the man-made disaster of the 2019 social unrest, followed by the Covid-19 pandemic that has disrupted every aspect of life. In these leaner times, it would indeed be unwise to continue writing out cheques to the people.

Such cheques are often called “relief money” but, surely, we can throw these financial lifelines more accurately, towards the most vulnerable. The handouts last year are better described as political penance, whether you want to see it as the government “paying” for its indisputable role in triggering the violence on our streets in 2019, or for its failure to secure enough masks and personal protective equipment at the onset of the pandemic.

Even in Macau, where cash handouts have practically become entitlements, its government has set eligibility criteria, such as salary caps and employment status. Our financial secretary is right to warn us against hoping for more handouts. Public resources need to be better spent, especially in a crisis.

04:22

Michelin-starred chefs join Feeding Hong Kong to help the underprivileged ahead of Lunar New Year

And that is where the biggest challenge lies. Whatever Chan is cooking up to resuscitate our economy, it had better be good – because the public can no longer stomach more mistakes, such as expensive amusement park bailouts or employment subsidies for supermarkets that turn out to be thriving. As Hong Kong faces its biggest disruption in decades, how will we seize our opportunities and what bold changes will we make?

The Hong Kong government has to step up and lead the city out of this crisis. It needs to double down on driving economic growth, and depart from its old practices of simply building more “hubs”. The blind belief that “if you build it, they will come”, simply will not cut it any more. We already have Cyberport and the Science Park and yet, look how far Hong Kong lags behind in innovation and technology.

Chief Executive Carrie Lam Cheng Yuet-ngor had to abruptly postpone her last policy address to go across the border in the middle of the pandemic to celebrate Shenzhen’s 40th anniversary as a special economic zone. Hong Kong has had to ask Shenzhen for a piece of the action, to let the Science and Technology Parks Corporation lease and manage areas of the Futian innovation and technology zone.

Our position as a financial centre should have given us an edge in financial technology but that has not translated into the founding of a sizeable number of fintech enterprises. And, on top of this, we are facing a brain drain as many people migrate.

Even before the social unrest, Hong Kong was becoming an increasingly unaffordable city, dropping in liveability ratings – not exactly the value-for-money, winning combination needed to attract and retain talent.

We need to be prudent but we should also go beyond piecemeal policies. The government needs to invest heavily in creating an environment conducive to honing talent, innovation and enterprise – starting from our schools to our regulation and tax incentives.

We need a Lantau Tomorrow Vision, not for Lantau but for innovation and technology, to create new, high-growth industries.

So, Chan will need to serve up some spectacular dishes come Wednesday. We shouldn’t expect a feast of delicacies, but Chan does need to put the city’s money where the government’s mouth is. There have been too many years of mere talk about diversifying the economy, driving economic growth and making the city more liveable.

Alice Wu is a political consultant and a former associate director of the Asia Pacific Media Network at UCLA