Budget Speech

Reduce Expenditure

172. This year's Budget will continue to roll out a series of measures for supporting individuals and businesses.  Last year, Hong Kong's economy was battered by the epidemic, and all sectors of the community were generally affected in varying degrees, particularly the grassroots.  Despite the fiscal deficit, I have decided not to reduce our spending in areas related to people's livelihood, especially resources allocated to the three policy areas of education, social welfare and healthcare, in order to safeguard people's livelihood and maintain public confidence.  In 2021-22, the recurrent funding for these three policy areas amounts to $302.3 billion in total, accounting for 58 per cent of the Government's total estimated recurrent expenditure and representing an increase of 45 per cent over the provision of $208.2 billion in 2017-18.

173. The Government will set an example by cutting expenditure so as to strengthen fiscal discipline.  In 2021-22, we will have zero growth in the civil service establishment.  Besides, the Government will implement an expenditure reduction programme by requiring all policy bureaux and departments to reduce expenditure without affecting livelihood-related spending.  The objective is to trim recurrent expenditure by one per cent in 2022-23.  The estimated savings will be about $3.9 billion.  While it seems not too difficult to achieve the one per cent cut in recurrent expenditure, there is limited room for curbing expenses related to personal emoluments which account for about 60 per cent of recurrent expenditure of government departments.  We can only achieve the target mainly through savings from the remaining 40 per cent of recurrent expenditure, including major items such as general expenses and subventions.  All departments have to undertake critical review, adjust priorities and enhance efficiency in order to achieve the savings target without affecting day-to-day operation and the public services they provide.  Many a little makes a mickle.