Chan Mo-po pointed out that government bonds have always been popular, with institutional subscriptions for infrastructure retail bonds oversubscribed by 3 to 4 times
The Financial Secretary Paul Chan stated that the subscription amount for the government's infrastructure retail bonds was HKD 17.8 billion, lower than the target of HKD 20 billion, but institutional subscriptions were oversubscribed by 3 to 4 times, indicating the popularity of government bonds. He mentioned that the fiscal deficit for the 2024/25 fiscal year is expected to increase to around HKD 100 billion, mainly due to a decrease in government revenue. The government is conducting fiscal consolidation, cutting expenditures to ensure that the burden on citizens is not increased, while hoping for a stable development of the property market, and it is expected that fiscal balance will take several decades
The government's infrastructure retail bond subscription amount is approximately HKD 17.8 billion, lower than the target of HKD 20 billion. Financial Secretary Paul Chan stated that there is no need for external concerns, as this bond issuance saw an oversubscription of three to four times in institutional subscriptions. He mentioned that government bonds have always been popular among citizens and institutions, with many seeking stable investments and secure returns. Currently, there are many investment options available, and a considerable number of high-quality companies are listing in Hong Kong, making the investment market active.
Regarding the fiscal deficit for the 2024/25 fiscal year, which has increased from the originally estimated HKD 48.1 billion to approximately HKD 100 billion, Chan explained in a radio program that this is mainly due to a decrease in government revenue, including high interest rates, previously mediocre property prices, citizens' hesitation towards property ownership, reduced stamp duty from the property market, and decreased stamp duty revenue from the stock market. Additionally, different enterprises are recovering at varying paces post-pandemic, but he believes this is merely a cyclical situation.
Chan stated that the government is currently undertaking fiscal consolidation and cost-cutting measures, primarily by reducing the growth of government department expenditures by 1% annually and freezing staffing levels. He will review whether the measures are sufficient when preparing the new budget. He emphasized that the government does not wish to increase the burden on citizens, especially the middle class, and must also consider enterprises rebuilding their balance sheets post-pandemic, thus being very cautious in revenue generation.
He mentioned that the government hopes for a stable development of the property market. Due to economic cycles, the government needs to think creatively during this period to develop the economy, "make the pie bigger," cultivate new industries, and accelerate results. Chan believes that achieving fiscal balance will take "three years or more." Hong Kong is striving to attract enterprises and talent, having already introduced 100 companies, which will drive upstream and downstream companies. These companies will gradually start paying taxes, and there are already 170,000 to 180,000 talents who have come to Hong Kong, consisting of professionals and relatively young individuals, who will also contribute to salary taxes in the future, serving as future sources of income
