One thing the public can be certain of regarding the budget speech is that it will be made available on Wednesday in booklets bound in red. The auspicious color for the new year has got many people wondering if Financial Secretary John Tsang Chun-wah is going to hand out fat red packets stuffed full of budget sweeteners.

With a budget surplus estimated to be as much as HK$80 billion for the fiscal year ending March 31, Tsang can certainly afford to be generous. Of course, he has been keeping the details close to his chest. But over the weekend, he dropped some hints that have raised public expectations that he will be even more generous than before.

Tsang was quoted as saying that budgetary incentives had helped boost economic growth in each of the past several years by about 1 percent, the effect of which, he stressed, should not be underestimated - especially at a time when the economy was declining. Many economists predict that economic growth in 2016 will fall to below 3 percent, which they say will become the "new normal" for Hong Kong's matured economy.

While emphasizing the importance of fiscal stimulants in the form of relief measures, Tsang made the point that such measures would be non-recurrent, meaning that they would not put a strain on the government's current account expenditure in future years. Most Hong Kong people are familiar with these one-off measures, which include tax rebates, the waiving of various fees and charges and injection of funds into an umbrella charity organization.

Tax rebates are widely seen as the most effective fiscal stimulus to economic growth. To lessen the impact of the global credit crisis in 2008, the government cut taxes with a record rebate amounting to HK$25,000, together with various other relief measures.

The present economic challenges posed by dwindling external demand for goods and services can only be countered by fiscal measures to boost domestic consumption. It is comforting to know that the financial secretary is doing exactly this.

(HK Edition 02/23/2016 page7)