Joint Policy Advocacy Project with Synergy Net on “Using Land Sale Revenue to Support Recurrent Expenditure”
Background
The Government accumulates large surplus often and yet reluctant to use the surplus to support recurrent expenditure. The reason given was that this was due to non-current revenue (i.e. land sale) that could not be used to support recurrent expenditure. However, account surplus appeared year after year and became recurrent surplus. This becomes a paradox to common sense that ties its own hand by itself.
Proposal
We have three proposals to resolve this paradox:
1. Establish a regular land sale policy and change land revenue to current revenue. (For details of this proposal, see the article on Hong Kong Economic Journal, on 29 April 2011 (in Chinese only), http://www.procommons.org.hk/29042011hkejarticle)
2. Establish a sinking fund and use the precipitated portion to support recurrent expenditure. (For details of this proposal, see the Synergy Net report “Review of Hong Kong’s Public Finances,” (in Chinese only) http://www.synergynet.org.hk/pdf/201201292672_b5.pdf )
3. Establish a statutory land development company to sell land and sends dividend to the Government as current revenue. (For details of this proposal, see the article on Hong Kong Economic Journall, on 29 April 2011 (in Chinese only), http://www.procommons.org.hk/29042011hkejarticle)