Hong Kong has promised to use its multi-billion dollar budget warchest to smooth over social disputes that its financial chief warned could push the territory into "chaos."
Financial secretary John Tsang Chun-wah revealed an estimated 2015 surplus of $3.8 billion and a 2016 surplus of $1.4 billion on Wednesday, followed by a slew of fiscal stimulus and social relief measures aimed at boosting local consumption and kickstarting the economy.
But it remains to be seen whether the announcements will pacify rising social unrest over lifestyle issues. The special administrative region consistently ranks as one of the world's most expensive cities to live due to unaffordable housing and maintains some of the longest working hours in the developed world, factors that have seen protesters take to the streets with increasing frequency.
This month, hundreds rioted against the government's clearing of illegal street vendors in the working class suburb of Mong Kok, injuring at least 90 police officers. Such protests were hurting the economy, Tsang said.
Data released Wednesday showed that Hong Kong's gross domestic product grew 2.4 percent in 2015, and is expected to slow to 1-2 percent in 2016.
"Politics and economics are closely intertwined. Political volatility will unavoidably impact on our economy," he said, warning that politics-inspired disputes were likely to intensify ahead of this year's Legislative Council general election.
"Acute social conflicts will add uncertainties to the already adverse economic environment," Tsang stated, adding that if such conflicts went unresolved, Hong Kong risked "even greater chaos" and future generations growing up "in the midst of hatred and malice."
Whether the sweeteners for residents, as set out below, will prove sufficient to calm this anger, remains to be seen.
Tax relief
Personal income taxes will be slashed by 75 percent this year (subject to a maximum reduction of $2,570), a move that will benefit nearly two million taxpayers. Indirect taxes levied on certain properties will also be waived for four quarters .
Combined with other spending initiatives, these steps will cost $4.9 billion and boost 2016 growth by 1.1 percent, Tsang noted. He did not specific the period over which the cost would be spread.
Michael Tien, deputy chair of the pro-Beijing New People's Party, said the tax rebates were crucial for the economy as they drove local spending.
But other Hong Kongers were less impressed.
"This is all surface noise. It's nice getting money back on my salaries tax but it's not building for the future," Mike Rowse, managing director at Treloar Enterprises, told CNBC.
One way to do so would be attracting more higher-spending visitors, he said, recommending the creation of a second theme park to rival Hong Kong Disneyland.
Social welfare
Government spending on education, healthcare services and social welfare was estimated at $25.4 billion for the 2016-17 fiscal year, or 60 percent of recurrent expenditure, Tsang said. The fiscal year runs from April 1, 2016, to March 31, 2017.
On the issue of retirement, which remains out of reach for many due to the high cost of living, he announced a $2.2 million allocation to provide 160 additional day care places for the elderly, and a $18 million injection for subsidized residential care places.
Tsang also earmarked $6.4 billion over an undefined period to improve "retirement protection" for the elderly in need.
Hong Kong's working-age population is expected to fall to 13 percent of the total population by 2030, from 60 percent in 2015, according to Natixis Research, making the topic of aging a key concern for the government.
Even before Tsang began his presentation Wednesday, protestors had gathered outside the Legislative Council building to call for more spending on retirement.
Economists weren't satisfied with Tsang's measures, however. Instead, they said Hong Kong should raise its retirement age from 65.
"We advocate additional spending for the elderly so as to improve their living standards but this cannot be fully achieved without extending the retirement age beyond the current limit (65 for civil servants)," Natixis explained in a report, adding that increasing the age to beyond 70 would allow those elderly to remain in a high-wage environment for longer.