Financial Secretary Paul Chan Mo-po on Wednesday said the Hong Kong Special Administrative Region government is “determined and confident” to restore fiscal balance in three years without taking the proceeds from debt issuance into account.

The Legislative Council on Wednesday passed the 2024-25 Budget bill, as the finance chief pledged to adopt “a fiscal consolidation plan” to return to fiscal balance progressively after the city logged deficits for four of the past five years.

In response to comments suggesting that the SAR government is relying on borrowing to sustain itself, Chan stressed that the funds raised from bond issuing would never be used for recurrent expenditure

Hong Kong’s consolidated deficit ballooned to HK$101.6 billion ($13 billion) in the financial year 2023-24, almost double the HK$54.4 billion estimate initially laid out in Chan’s budget speech last year.

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According to Chan, a deficit of HK$48.1 billion is forecast for the year ending March 2025.

The government’s fiscal consolidation strategy can be summarized as cutting costs while seeking new sources of revenue.

However, Chan emphasized that the expenditure reduction would be carried out cautiously to avoid impacting public services for citizens, particularly those concerning social security and public welfare programs.

In response to comments suggesting that the SAR government is relying on borrowing to sustain itself, Chan stressed that the funds raised from bond issuing would never be used for recurrent expenditure.

Instead, they would be allocated for investment and infrastructure projects, such as the Northern Metropolis — a 30,000-hectare site near the Chinese mainland boundary targeted to alleviate housing burden and provide jobs.

Under the budget unveiled in February, a major point was the cancellation of the city’s decade-old property curbs. These include scrapping all additional stamp duties for non-permanent residents, and also those for second-time purchasers, as well as on those selling flats within two years of buying them.

The property demand-side curbs, also known as “spicy measures”, were introduced in 2010 by the government to cool one of the world’s priciest property markets. However, under pressure from rising borrowing costs and a sluggish economy, the real estate market has struggled to cope with a downward spiral in recent years.

Cross-sector collaboration will continue to be promoted, encouraging the industry to develop distinctive tourism products to attract high-budget visitors and stimulate their spending in Hong Kong

Since the announcement of the full removal of demand-side management measures, the property market has responded positively, Secretary for Housing Winnie Ho Wing-yin said at the Legislative Council meeting over the budget bill on Wednesday.

In April, there were nearly 8,600 residential property transactions submitted for registration at the Land Registry, compared to approximately 4,000 transactions in March, according to Ho. This represents an increase of nearly 1.2 times every month and an over 80 percent growth compared to April last year.

Also addressing the meeting, Secretary for Culture, Sports and Tourism Kevin Yeung Yun-hung said the government will actively study lawmakers’ ideas to promote the city’s tourism sector and make every effort to adopt them within the limits of fiscal capacity and technological feasibility.

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During the five-day Labor Day Golden Week holiday, over 760,000 mainland tourists visited Hong Kong, representing a year-on-year increase of over 22 percent, according to Yeung. It is estimated that the holiday logged over HK$2 billion in consumption.

Cross-sector collaboration will continue to be promoted, encouraging the industry to develop distinctive tourism products to attract high-budget visitors and stimulate their spending in Hong Kong, he added.

Yeung said the government will launch a courtesy campaign soon to promote Hong Kong as a welcoming city. Starting with the service sector, the campaign’s impact is expected to ultimately extend to a broader aspect of the society.