The transport subsidy scheme in Hong Kong, providing a concession fare of HK$2 for seniors and disabled passengers, has become a significant financial burden on the government, costing billions of dollars annually. This situation is underscored by the urgent need for reform to address the city’s gaping budget deficit. As expenses continue to rise, it is imperative that the Hong Kong administration accelerates its efforts to revamp this subsidy scheme.

At present, the proposed reforms are expected to take up to 18 months for full implementation. This timeline raises serious concerns among stakeholders who believe that immediate action is necessary. The longer the government delays these changes, the greater the financial strain on public resources. With the current economic landscape becoming increasingly challenging, the need for prompt and effective solutions cannot be overstated.

One promising development is the possibility of expediting a key adjustment: charging 20% on fares that exceed HK$10. This measure, which could be implemented as early as April 2026—five months ahead of the original schedule—has the potential to save the government around HK$260 million. This early implementation reflects a recognition of the urgency to cut costs while still providing essential services to the community.

However, while this adjustment is a step in the right direction, another crucial component of the reform—the introduction of a monthly cap on subsidized trips—faces a longer timeline for implementation. Currently, the plan is to impose a cap of 240 subsidized trips per month a year after the “$2 and 20%” formula takes effect. This delay is primarily due to the need for thorough testing of over 10,000 machine readers, which is necessary to facilitate the changes.

Officials have justified this cautious approach by highlighting that only about 300 individuals exceed 240 trips monthly. While this may seem like a small number, the cap is still essential for managing expenses without causing significant inconvenience to the majority of passengers. It serves a dual purpose: limiting government expenditure while ensuring that most users can continue to benefit from the subsidy.

The anticipated savings from the revamp are considerable. Once fully enforced, the reforms are expected to save the government an annual HK$680 million. These savings are particularly important in light of rising operational costs and the increasing demand for public transport services. For instance, the adult tram fare is set to rise by 10% to HK$3.30 next month. Although fares for the Mass Transit Railway will not increase this year, the growing number of passengers could lead to an even larger financial burden for the government in the coming years.

The need for a more vigorous approach to accelerate preparations for these reforms is clear. With transport subsidy expenditures likely to continue spiraling, the government must act decisively to implement the necessary changes. The financial implications of inaction are substantial, and every month of delay incurs additional costs that could otherwise be saved for public benefit.

Moreover, the urgency of reform is compounded by the broader economic context in which Hong Kong operates. As the city grapples with various financial challenges, streamlining government expenses is not just a matter of good governance; it is essential for ensuring the sustainability of public services. The transport subsidy scheme, while well-intentioned, must evolve to reflect the current fiscal realities and the changing needs of the population.

In conclusion, the revamp of Hong Kong's transport subsidy scheme is not merely a bureaucratic necessity but a critical financial imperative. The government must prioritize the implementation of the proposed reforms, particularly the adjustments to the fare structure and the introduction of trip caps. By doing so, it can achieve meaningful savings, alleviate the strain on public finances, and continue to support the vulnerable populations that rely on these transport subsidies.

The path forward requires a commitment to efficiency and a willingness to adapt to changing circumstances. As the administration works to finalize the details of these reforms, it must remain mindful of the urgency of the situation and the potential for lost savings during the lengthy implementation process. With rising operational costs and increased demand for transport services, the time for action is now. By expediting these necessary changes, Hong Kong can ensure a more sustainable future for its transport subsidy scheme and the residents who depend on it.

By Lewis Koch

The author is a current affairs commentator.

The views do not necessarily reflect those of Orange News.

Photo: AFP