Wine drinkers toast HK budget

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The Independent Online
If there is one absolutely clear message which emerges from yesterday's Hong Kong budget it is: let them drink wine. Donald Tsang, the colony's financial secretary, revealed that the government coffers were seriously awash with cash but he was proposing to give little away except to wine drinkers who will benefit from a cut in duty from 90 to 60 per cent.

The generosity being shown to wine drinkers is bizarre as few Hong Kong people drink wine, with the possible exception of the financial secretary, and the people who apparently bug him at dinner parties with concerns over high wine duties. Mr Tsang said this was the "one issue which has plagued me more than most".

That will be news to the many social welfare organisations which fail to understand why a revenue surplus of HK$15.1bn (pounds 1.2bn) could not have been distributed more generously in their direction. Huang Chen-ya, the economics spokesman for the Democratic Party, said the budget meant the rich would be able "to drink red wine but the poor will not have enough money for their very living".

The budget surplus was more than nine times higher than the forecast amount of HK$1.6bn, mainly because soaring property prices and a buoyant stock market have yielded far higher-than-expected revenues from stamp duty. Government land sales also made a higher-than-anticipated contribution while capital spending failed to materialise at expected levels.

The net result of the growing surplus and accumulation of government reserves means the Hong Kong government will have total reserves of some HK$359bn (pounds 29bn) to hand over to the incoming Chinese administration which assumes power in July.