Hong Kong - the Budget 2017

CCN 2129 Introduction to Macroeconomics

Semester Two, 2016-2017

Group Assignment

Group 4

                              Members: 15213512A Leung Siu Wa Samuel

        15099016A Chung Tsz Ip Sunny

15113144A Lau Choi Hung Rainbow

15167400A Chan Lok Fung Anson

                                      15162175A Wong Yung Leung Tommy

Content

Introduction------------------------------     P.3

Infrastructure----------------------------     P.3

Social Welfare--------------------------     P.6

Medical Service------------------------     P.7

Education--------------------------------     P.9

References------------------------------     P.13

Introduction

The Budget 2017 was announced on 22nd February in 2017, it is worth to notice that this budget plan is the first and the last budget plan that Paul Chan, the Financial Secretary of Hong Kong, ever done. The society was looking for a big change in the usage of the surplus toward different aspects, as an old Chinese idiom goes, “a new broom sweeps clear”, which perfectly describe how the society thought. But Chan disappointed them, as Chan mostly followed the way the John Tsang, the former Financial Secretary of Hong Kong, went. In the Budget 2017, Chan forecasted to spend most on infrastructure, while healthcare’s is the least. We are going to analyze about the different aspects covered in the Budget 2017, they are infrastructure, social welfare, medical service and education. We would like to start with infrastructure.

Infrastructure

From the Budget 2017, we could notice that there will be more constructions compared to the previous year, as the capital expenditure is increased from $79 billion to $86.8 billion, increased about 9.87%. Besides, Paul Chan, the Financial Secretary of Hong Kong, believes the increase of the capital expenditure would bring in a 4.7% increase to Hong Kong GDP (Chan P., 2017).

Chan stated in Budget speech that the construction projects can improve people’s quality of life and enhance Hong Kong’s business environment. To compare with other issues, the forecast budget spent on infrastructure is the most in the budget plan in the following year. We could prove that from the amount of budget that Chan decided to spend on infrastructure. He claimed to spend $86.8 billion on capital works, which the forecast budget spend on education is $78.6 billion and that is the second most budget spend among the expenditure items. Besides, infrastructure is, in some sense, a lifeline to a country. It is because infrastructure provides benefits and supports toward social and economic growths, like transportations (highways, large-scale roadwork), environmental-related constructions, new town development etc. (Microsoft, 2017)