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Government Spending on Public Transport Fare Concession Scheme Expected to Soar to HK$6 Billion

Government Spending on Public Transport Fare Concession Scheme

HONG KONG — The Hong Kong government is projected to allocate approximately HK$6 billion to fund the public transport fare concession scheme in the upcoming fiscal year starting April 1, according to Secretary for Labour and Welfare Chris Sun Yuk-han.

Sun’s written response to lawmakers on Thursday revealed that the government had spent HK$4.05 billion on the HK$2 fare scheme during the 2023-24 fiscal year. Furthermore, estimates indicate that an additional HK$2 billion, accounting for a 50 percent increase, will be allocated for the scheme in 2024-25, reaching a total of HK$6.01 billion.

Sun emphasized that future spending on the scheme would depend on several factors, including changes in the eligible population, fare adjustments, participation of public transport operators, and the effectiveness of anti-abuse measures.

This announcement follows Financial Secretary Paul Chan Mo-po’s budget statement, in which he revealed plans to review the HK$2 fare scheme for the elderly and people with disabilities, as well as the public transport fare subsidy scheme. These reviews were prompted by the significant rise in expenses faced by these groups.

The eligible age for the HK$2 fare scheme was lowered to 60 years in February 2022. Commenting on this development, lawmaker Chan Siu-hung expressed concerns about the surge in the number of eligible passengers, which has placed a substantial burden on public finances.

Government data indicates that, on average, approximately 890,000 passengers benefited from the scheme each day in March last year. This number represents an 85 percent increase compared to the same period in 2022 when there were 480,000 beneficiaries per day.

Furthermore, the average daily trips per passenger doubled to 2.75 million in December 2023, compared to 1.3 million in March 2022.

Chan highlighted that the scheme has led to certain issues, such as passengers opting for longer routes for shorter journeys, as well as instances of abuse. Addressing these concerns, the government has implemented measures to remind passengers to use the scheme responsibly through television and radio advertisements, as well as posters at bus terminals.

Sun stated that a total of 1,419 cases of abuse of the scheme had been identified in the past five years. In terms of reimbursements to public transport operators, franchised bus operators received a total of HK$1.4 billion in the current fiscal year, surpassing the HK$1.39 billion paid to MTR Corp.

To mitigate the escalating expenses, Sun assured that the government would explore various options. The aim is to find strategies to contain the growth in expenditure while maintaining the effectiveness and benefits of the scheme.

As the fiscal year approaches, the Hong Kong government faces the challenge of balancing the financial implications of the popular fare concession scheme with the need to ensure its long-term sustainability. With an increasing number of passengers benefiting from the scheme and concerns over abuse, policymakers will need to carefully navigate these complexities to strike a balance that serves the interests of the public and the government’s fiscal responsibilities.