BudgetSpeech15: Budget relief for businesses hurt by Occupy Movement

Photo Courtesy of San Po Yan, HKBU

The Financial Secretary has unveiled a $440.8 billion budget for 2015-16 that offers relief measures for businesses affected by the Occupy Movement and rebates for taxpayers.

As expected, Mr John Tsang Chun-wah announced in his eighth budget that, as in recent years, public housing tenants will get rent waivers and social security recipients additional pay-outs, but the amounts will be smaller.

The tourism and hospitality industry will benefit most under the targeted support measures, with licence fees to be waived for travel agents, hotels, guesthouses, restaurants and hawkers. Nor would commercial vehicles owners need to pay to have their vehicles examined.

Other relief measures include reductions of salaries and profit taxes, waivers of rates and public housing estate rents, as well as an extra grant to CSSA recipients.

Relief measures:

-   3.15 million property owners will enjoy a maximum of $2,500 rates waiver per property from April to September 2015.

-   Salaries and profits taxes are to be reduced by 75 per cent, subject to a ceiling of $20,000.

-   Public housing tenants will enjoy rent remission for the sixth year consecutively, with the suspension period reduced from two months to one month.

-   CSSA recipients will receive an extra two-month allowance of a minimum of $4,310.

Economic development measures:

-   An injection of $5 billion to the Innovation and Technology Fund to support entrepreneurial start-ups.

-   $150 million is earmarked for the Enhancing Self-Reliance Through District Partnership Programme from 2016-17 to 2019-20 to benefit a greater variety of social enterprises and encourage participation from the commercial sector.

-   An additional $700 million will be allocated to the fashion and film industries.

The budget continues to deploy measures to sharpen the competitiveness of Hong Kong's four pillar industries -- trading and logistics, tourism, business and professional services, and financial services.

In line with the Central Government's initiatives to build the Silk Road Economic Belt and the 21st Century Maritime Silk Road, Mr Tsang said Hong Kong would strengthen trading ties with Asia, Europe and Africa.

With the airport's existing two runways about to reach their maximum capacity, the government would take forward the development of a third runway to meet long-term air traffic demand of the trade and logistics industry, he said.

To promote Hong Kong as the premier "intellectual property trading hub", the Financial Secretary said $23 million would be allotted to provide intellectual property consultation, manpower training and other services to small and medium-sized enterprises.

Hong Kong would also continue to develop as an offshore RMB business market by raising its investment quota for the RMB Qualified Foreign Institutional Investor Scheme, he said.

To help ordinary people cushion the impact of inflation, the government would launch another iBond issue of up to $10 billion with a maturity of three years, said Mr Tsang.

While stressing that local workers would be given priority in employment, Mr Tsang said Hong Kong would need to import workers from overseas as the city's economic development was being affected by skills mismatch, manpower shortage and recruitment difficulties.

On improving the environment, the government would continue to subsidise the replacement of old vehicles to reduce emissions, he said.

On land usage, the Financial Secretary dwelt at length on measures to increase the supply of residential and commercial sites and noted that 19,000 residential units were expected to be completed in the coming year.

On tackling Hong Kong's ageing population, he said the government would encourage middle-aged and elderly people to return to the labour market.

To contain spending, Mr Tsang said all departments had been required to reduce operating expenditure by a total of two per cent over the next three financial years.

On the revenue side, the government planned to review livelihood-related fees and charges, he said.

To save up for rainy days, the Financial Secretary said he had adopted a proposal to set up a $220 billion Future Fund, which would serve as long-term savings and be placed in long-term investments for higher returns.

Although Hong Kong's economy grew by only 2.3 per cent last year, compared to the past ten years' average of 3.9 per cent, the city had managed to keep the unemployment rate low at 3.2 per cent, he said.

Looking ahead, Mr Tsang expected the economy to grow 1 to 3 per cent in the coming year and inflation to be contained at 3.5 per cent, a much lower level than the previous year's 4.4 per cent.