Lawmakers approve budget bill as FS explains moves

Financial Secretary Paul Chan on Wednesday dismissed concerns from some lawmakers that the financial cornerstone of the SAR will be shaken by the government's plan to use HK$150 billion from the Exchange Fund for infrastructure spending. This came as lawmakers approved the budget bill, with some of them raising questions about the funds transfer plan. Chan described as "scaremongering" comments that issuing bonds for Northern Metropolis development would create financial crises for future generations. "[It would only be irresponsible] if we don't invest in the Northern Metropolis and create greater capacity for Hong Kong, seizing the opportunities to snatch companies and get them to set up here to develop our innovation and technology and a vigorous I&T ecosystem," he told lawmakers before the bill's passage. "It would only be irresponsible if we don't diversify the economic structure of Hong Kong and make the future economy more resilient, and allow young people and future generations to have more, and better, job opportunities." Chan stressed that the one-off transfer – to be carried out over two years – amounts to less than four percent of the overall reserves of the Exchange Fund. He added that the HK$150 billion will come from the HK$330 billion annual surplus, to support infrastructure development in the metropolis, as well as other projects. The minister also rejected arguments that the government is using money raised through bond issuance to cover other bond debts. He said the administration is issuing relatively shorter bonds of three to seven years, because doing so will mean lower interest commitments. He said given the market confidence in purchasing the bonds – due to the SAR government's sound financial situation – officials plan to keep issuing them. Chan went on to say that the administration plans to focus on developing artificial intelligence in Hong Kong to boost high-quality development of the local economy. Edited by Thomas McAlinden