Hong Kong’s improving fiscal position has prompted a groundswell of calls for the government to offer more “sweeteners” in the coming budget, including a cross-party demand for more tax relief for the middle class, but economists have cautioned against such across-the-board measures.
They were more supportive of targeted spending, a cause taken up in recent weeks by concern groups asking for more specific forms of help for grass-roots residents, especially the unemployed.
The growing debate was sparked by Hong Kong finance chief Paul Chan Mo-po’s disclosure last August that the city was set to achieve an early operating account surplus after three consecutive years of deficit.
In February, Chan said that a stock market boom had helped the government’s operating account return to surplus in the 2025-2026 financial year – a year earlier than projected.
The surplus could reach about HK$500 million (US$64 million), according to estimates by some accounting firms.
The government rolled out one-off support measures totalling HK$8.3 billion last year, a 28 per cent year-on-year reduction from HK$11.5 billion in 2024 and an 86 per cent drop from HK$59.4 billion in 2023.
With the improved public finances, there has been a growing chorus for more sweeteners in this year’s budget.