Hong Kong upcoming Budget May Boost Social Welfare

Hong Kong’s government may boost spending on the poor and elderly in its first budget under Chief Executive Leung Chun-ying tomorrow, as record home prices and falling poll ratings add pressure to narrow a widening income gap.

The government may report a surplus of HK$55 billion ($7.1 billion), boosting reserves to a record HK$724 billion, according to Marcella Chow, an economist at Bank of America Corp. in Hong Kong. The budget, presented by Financial

Secretary John Tsang, will probably trim one-time measures and focus public spending on alleviating poverty and helping the aged, Chow said.

Hong Kong’s doubling of a property-sales tax last week underscored Leung’s failure to tame a market that has surpassed its 1997 high, spurring warnings of a bubble and stoking social tensions. Leung, 58, may need to refocus on his campaign promises to make housing affordable and narrow the rich-poor gap as opposition efforts to oust him over illegal additions to his home contribute to record-low popularity ratings.

Tsang tomorrow will give his latest estimate on the budget surplus for the fiscal year ending March 31 and outline the following year’s budget. The government will also announce fourth-quarter and full-year data on gross domestic product.


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