Hong Kong fencing champion Miss KONG Man Wai Vivian said, “I feel very fortunate to be an athlete in Hong Kong.” In fact, being a civil officer in Hong Kong is also very fortunate. While most ordinary citizens are trying their best to tighten their belts, civil servants are receiving pay raises for three consecutive years and living in comfort. On 5th July 2024, the Legislative Council’s Finance Committee approved a uniform 3% pay rise for civil officers, with the effective date retroactive to 1st April this year. It is estimated that Hong Kong’s financial expenditure will increase by approximately HK$8.72 billion as a result.
The question is: where does the money for civil service pay raises come from? The Hong Kong government has been running deficits year after year since 2019, with the deficits in the past two fiscal years exceeding HK$100 billion, leading to increasingly tight finances. The astute officials, of course, are not resting on their laurels. Apart from making every effort to cut various subsidies and economic stimulus measures to tighten the belt, they are also actively considering raising various government service charges to boost revenue. While most of these measures may not have a “direct” relationship with civil service pay raises and financial deficits, one of the aims is certainly to “indirectly” alleviate some of the fiscal pressures. However, the estimated additional revenue that the government can generate from fee increases in this fiscal year is only around HK$1.03 billion, offsetting about 11.8% of the expenses related to civil service pay raises.
The government coffers have not been overflowing due to increased charges primarily because the items contribute relatively insignificantly to the overall financial income. Even if the increases are substantial in percentage terms, the revenue generated is largely limited:
-
-
- Increasing business registration fees and branch registration fees: Starting from 1st April 2024, these fees will increase by 10% from HK$2,000 annually to HK$2,200, roughly estimated to help the Hong Kong government generate an additional income of HK$295 million per year.
- Raising public housing rents: The Housing Authority Subsidised Housing Committee approved a 10% increase in public housing rents starting from 1st October this year. This measure is expected to bring in an additional HK$2.3 billion in revenue for the Hong Kong government annually, around HK$1.15 billion in six months. However, for the first three months after the rent adjustment, public housing tenants are exempted from paying extra rent, involving around HK$575 million, so it is anticipated that this fiscal year will only bring in an extra HK$575 million in revenue for the Hong Kong government.
- Adjusting fees for recreational sports facilities: Director of Leisure and Cultural Services, Mr. LIU Ming Kwong Vincent, mentioned in a media briefing on 7th March 2024, that the department is reviewing the fee levels for recreational facilities in conjunction with the Department of Culture, Sports, and Tourism, which may see an increase. Assuming a 10% increase in these fees from 1st October 2024, this measure could generate an additional HK$33 million in revenue for the Hong Kong government this fiscal year.
- Increasing water tariffs: The Water Supplies Department recorded a deficit of over HK$2.4 billion in its water operations account last year, with a cost recovery rate dropping to less than 80%. Director Mr. WONG Yan Lok Roger mentioned in a media interview that to improve operational conditions and maintain quality and stable water supply, it is necessary to adjust water tariffs promptly. Assuming a 10% increase in these fees from October 1, 2024, based on the revised budgeted water tariff income of HK$2.2867 billion from the previous fiscal year, this measure could generate an additional HK$114 million in revenue for the Hong Kong government this fiscal year.
- Implementing emergency room charges: Secretary for Health Prof. LO Chung Mao mentioned in an interview that the authorities aim to guide citizens in the correct use of emergency rooms, with plans to increase consultation fees for mild patients and reduce charges for severe cases. In 2023, the number of emergency room visits (provisional figure) was 2.01 million, with 1.14 million classified as “non-urgent” or “less urgent” users. Assuming an increase of HK$100 in consultation fees for these two categories of users from 1st October 2024, and a reduction of HK$100 in consultation fees for other more urgent users, with the number of users remaining constant, this measure could generate an additional HK$12 million in revenue for the Hong Kong government this fiscal year.
- Raising university tuition fees: On 20th June 2024, the Hong Kong government announced an increase in tuition fees for full-time undergraduate degrees, research courses, and research programmes funded by the University Grants Committee, gradually rising from HK$42,100 in the 2024/25 academic year to HK$49,500 in the 2027/28 academic year. Since these measures will only come into effect in the next fiscal year, they will not bring in any additional income this fiscal year. Even after the new tuition fee standards are implemented next year, it is expected to only generate an additional income of HK$178 million for the Hong Kong government.
-
Even when considering an entire year, the aforementioned fee increases can only add HK$3.27 billion to the government’s financial revenue. If the Hong Kong government does not intensify its efforts to increase fees on its citizens in the short term and asks those accustomed to “weathering the storm together” in Hong Kong to respect, understand, and bless the public officers, how will the officers fulfill their dreams of pay raises in the coming year?