Education funding plan good start for new govt

Raymond So welcomes the positive effects of measures but warns against belief that this additional spending means open season on government's fiscal reserves

This week marks the new administration's assumption of office. The new chief executive has achieved a good start. She has made it clear that papers on future policy formulation will have more time to be discussed at the Executive Council, and there can be changes upon discussion at the ExCo, prior to the launch. Also, she suggested there would be more interactions between the CE and Legislative Council. These all show signs of improving the working relationship between the executive and legislative branches of government. Also, the likely approval of the proposed HK$5 billion additional education funding is a strategic move.

Strategically, the new administration certainly wants a good start for its operation. If the opposition camp keeps on filibustering against every government initiative, there would be a continuation of the deadlock in Hong Kong's development. To give the administration and opposition a chance to break the political ice, and provide the opposition a graceful way to back out of the deadlock, there is a need for an initiative to be supported by both ends of the political spectrum. The HK$5 billion additional education funding serves this purpose perfectly well. The proposed scheme will benefit many stakeholders of the education sector. Hence, the opposition camp will find it difficult not to support it. While not all sectors will benefit from the scheme, it still commands the support of the majority of society. This gives the opposition camp a much-needed reason to show their support too. To the administration, this will also show a good gesture. At the very least, there will be a honeymoon period for the new administration with the opposition. For Hong Kong as a whole, this is indeed an opportunity to set aside disagreements and move forward. This might be just a little step toward achieving social harmony but the implication is still very positive. This also suggests more government interaction with different sectors will be needed in future if it is to engage with different stakeholders with diverse views. In short, the proposal of appropriating HK$5 billion additional budget for education is a strategic start.

Nevertheless, it is too early to make any conclusion on potential consequences of the proposal. The HK$5 billion extra budget for education might set a precedent for different sectors to take a bite of the government's fiscal reserves. We all understand Hong Kong faces many challenges. In the old days, the government adopted a prudent fiscal policy; public fiscal expenditure was determined by projected fiscal revenue. This conservative approach has made Hong Kong financially sound to cope with various financial crises. Yet this conservative approach has prevented Hong Kong from making long-term development planning. The launch of the HK$5 billion extra funding for education is likely to raise people's expectations on the use of the government's huge fiscal reserves. For example, there has long been discussion of universal retirement protection in the community and the government has been reluctant to act on such ideas as they are likely to create huge financial burdens. It is easy to imagine the HK$5 billion extra budget for education will stoke expectations for further government commitment to various social welfare initiatives. This is something the new administration will need to handle with caution for the sake of fiscal sustainability.

The launch of this HK$5 billion extra education budget has attracted active engagement from different stakeholders as well as various interest groups with different agendas. How can the government win the needed support for its initiative? The key is how it engages with the stakeholders. It is true that it is impossible to make everybody happy. The crucial task is to make sure that the majority of stakeholders are comfortable with and welcome the initiative. This is indeed a valuable experience and lesson for the new administration to draw upon. Following this pattern, future policy initiatives would have a better chance of winning support and achieving their objectives.

(HK Edition 07/07/2017 page11)