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Hong Kong budget 2025-26
OpinionHong Kong Opinion
Regina Ip
Regina Ip

Opinion | Hong Kong civil service needs to be hauled into the 21st century

The financial secretary is heeding calls to downsize and cut costs, but should go further by embracing AI more quickly

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Hong Kong Financial Secretary Paul Chan speaks during a press conference after presenting the budget for 2025-26 on February 26. Photo: EPA-EFE
Regina Ip
Financial Secretary Paul Chan Mo-po was caught between a rock and a hard place as he drew up the budget for the financial year 2025-26. Ever since he disclosed at a meeting in the Legislative Council last December that the government would run a fiscal deficit for the third consecutive year, and that it would amount to HK$100 billion in 2024-25, pressures have been mounting on him to take decisive measures to bring public finance back into a healthy balance.
In fact, the financial secretary had been a lightning rod since he singled out the popular HK$2 transport fare concession scheme for the elderly and persons with disabilities for review in his budget speech last year. But he had good reason to do this. Expenditure on this concession has ballooned from around HK$230 million in 2012-13 to a projected HK$4.6 billion in 2024-25, and HK$5.6 billion in 2025-26.

The scheme was extended to multiple modes of transport and the qualifying age lowered to 60 in 2022, as part of the “10 new initiatives to benefit livelihoods for over a million grass-roots and underprivileged people” announced by chief executive Carrie Lam Cheng Yuet-ngor in January 2020.

The HK$2 scheme has become wildly popular with large numbers of Hong Kong residents. Any person aged 60 or above can have a fun day in Shenzhen or Discovery Bay, spending no more than HK$4 on transport. As many as 2.4 million Hongkongers have benefited from the government’s largesse.

The position of political parties on this contentious subsidy varies greatly, depending on their voter base – whether they have large numbers of grass-roots voters in geographical constituencies or more budget-conscious voters in middle-class and professional constituencies.

The lowering of the qualifying age for the HK$2 scheme is far from the biggest spender in the package of initiatives implemented by Lam. She reformed the old age living allowance for low-income elderly people by combining the normal rate with the higher rate.

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