Reduction of recurrent government expenditure: CSSA, Social Security Allowance and statutory expenditure will not be affected. Government’s recurrent expenditure will be cut by 2% in both 2026-27 and 2027-28, delivering savings of $7.8 billion and $15.6 billion respectively compared to 2025-26
Civil service establishment: a cumulative reduction of over 10 000 posts in this term of Government
Civil service pay adjustment: Pay Trend Survey to be done in accordance with the established mechanism and submitted to Chief Executive-in-Council for consideration
Increasing Revenue
Implement BEPS 2.0 by OECD: expected to bring in additional tax revenue of $15 billion annually for the Government, starting from 2027-28
Adjust stamp duty on residential properties valued over $100 million from 4.25% to 6.5%, with retrospective effect from 26 Feb 2026
Capital Works Expenditure
2026-27 capital works expenditure is estimated to be about $128 billion. Annual capital works expenditure from 2027-28 to 2030-31 will remain at a similar level
Issue bonds worth $160 billion to $220 billion every year from 2026-27 to 2030-31. About half to be used for re-financing short-term debts
Issue more long-term bonds to reduce short-term re-financing needs
Ratio of government debt to GDP in 2026-27 to 2030-31 will be 14.4% to 19.9%, much lower than those of most advanced economies
Proceeds from bond issuance will not be used for funding government recurrent expenditure, but only for infrastructure investment
Transfer $150 billion of Exchange Fund to the Capital Works Reserve Fund in the coming 2 years to support the NM and other infrastructure projects
