KPMG: Hong Kong Budget 2018-19

In a typical Hong Kong Budget speech, the Financial Secretary announces a big surplus, proposes a few new spending projects, then adds the surplus to reserves. Today’s Budget speech was no exception. Having another year of healthy fiscal surplus gave the Financial Secretary, Paul MP Chan, additional room to spend a bit more than usual on ‘giveaways’ this year of over HKD 50 billion.

Overall, this was a ‘safe’ Budget. Although it may represent ‘more of the same’, it gives a big win to the Innovation and Technology sector. The Budget is difficult to object to. It is directionally safe. Some people would have wanted higher expenditure on social and community initiatives, and it is they who might be disappointed. The Budget did not tangibly address some core issues the population faces such as housing affordability and pollution (despite the green initiatives mentioned). The Financial Secretary did mention that financial resources alone would not solve Hong Kong’s housing problem and that the Task Force on Land Supply was considering matters in further detail; his solution for now appears to be that increasing land supply and the coming increases in interest rates will help dampen real estate prices over time.

The projections for the future indicate that the government’s fiscal policy of conservative prudence is unlikely to change in the coming years.

Read the Hong Kong Budget Summary 2018-2019 here.