Cutting the salaries of civil servants in a bid to stem the Hong Kong government’s financial deficit could be counterproductive, a lawmaker and an academic have warned, urging authorities to consider delaying minor infrastructure projects instead.
Terence Chong Tai-leung, executive director of the Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong, also said the government could earn back about HK$100 billion (US$12.86 billion) from its revenues from stock stamp duty and selling some government-related assets.
“Salary cuts bring forth many side effects. It’s not that they cannot make the cuts as the largest employer of Hong Kong, but when the market economy is still seeing salary increases, a salary cut from the government would be different from 1997, when the overall economy was handing out pay cuts,” Chong warned.
Lawmaker Andrew Lam Siu-lo echoed Chong’s views, saying cutting the wages of ministers and lawmakers would merely be “symbolic” and would not be able to shave off much from public expenditure.
Lam and Chong were speaking after Financial Secretary Paul Chan Mo-po wrote in his weekly blog on Sunday that the administration would prioritise public work projects and maintain sustainable public finances as the estimated deficit for the current financial year was expected to reach just below HK$100 billion.
The estimate was more than double the HK$48.1 billion projected in last February’s budget.