Editorial:Structural fiscal deficit crisis must be addressed

【明報專訊】With the release of the budget, measures such as the $5,000 electronic consumption vouchers and the increases in stamp duty on stock transfers and vehicle licence fees for private cars have attracted much attention. Amid the pandemic, people and businesses are having a hard time. The government needs to make good use of resources to provide precise relief and support for the economy, while at the same time it has to find ways to increase revenue and reduce expenditure to cope with the pressure on public finance. The budget estimates that a deficit of around 100 billion dollars will be recorded in the new year, and in the next few years, the Operating Account will also record an annual deficit of tens of billions of dollars. The red light for a structural deficit is on, but the government is constrained by the pandemic and has not taken any drastic action, and can only address the shortfall by issuing bonds and ploughing back future fund incomes to reduce the size of the deficit. These stopgap measures can theoretically help the government buy time for consensus building to broaden the tax base while waiting for the global economy to improve. However, when it comes to reform, if the government continues to dilly-dally and be all talk and no action, the public finance crisis will only deepen further.