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(Xinhua)
Updated: 2008-02-27 16:06

HONG KONG -- Hong Kong Special Administrative Region (HKSAR) government Financial Secretary John Tsang proposed here on Wednesday allocating 50 billion HK dollars (6.43 billion US dollars) from the fiscal reserves to assist in the implementation of healthcare reform in Hong Kong.

Presenting his first Budget in the Legislative Council, Tsang highlighted an aging population as the major challenge to future public finances.

He reiterated the HKSAR government will increase healthcare's share of recurrent expenditure to 17 percent by 2012. He underlined healthcare reform as a priority in achieving fiscal sustainability.

Tsang said that the number of elderly people in Hong Kong is expected to grow from 870,000 to about 2.17 million by 2033. Currently almost half of the Hospital Authority's total spending is to provide healthcare services for the elderly.

As new diagnostic techniques, drugs and treatment methods continually drive up medical costs. It is expected that the increase in overall spending on healthcare services will be two percentage points higher than the actual economic growth rate in the next 20 to 30 years.

According to an external study, public healthcare spending would rise about 400 percent, from 38 billion HK dollars (4.88 billion US dollars) in 2004 to over 180 billion HK dollars (23.14 billion US dollars) in 2033. The share of the cost of public healthcare services could increase from the present 15 percent of government recurrent expenditure to over 27 percent.

Tsang stressed that if the HKSAR government does not introduce new financing arrangements, the provision of quality public healthcare services cannot be sustained.