In announcing the 2020-21 Budget today (February 26), the Financial Secretary, Mr Paul Chan, highlighted the importance of creating a liveable city, with particular focus on measures targeting healthcare, environmental protection and housing.
Beyond the immediate need to control the coronavirus epidemic, Mr Chan said it was essential to plan ahead to enhance Hong Kong’s healthcare system by “building additional medical and quarantine facilities, increasing stock of medical supplies, as well as strengthening scientific research on infectious disease prevention and control, pathology and medication.”
Equally important, he said, was providing sufficient healthcare professionals. Mr Chan said that the Hospital Authority (HA) would encourage retiring experienced doctors to continue to work, on contract terms, until 65. In addition, the HA will consider creating opportunities for promoting about 200 Associate Consultants to Consultants over the next five years, while providing additional allowances to registered nurses with specialty qualifications. It is estimated that the additional expenditure for these three initiatives would expand to about $1.2 billion in 2025-26 from $160 million in 2021-22.
Mr Chan also announced that the HA’s recurrent funding would increase by $3 billion. An additional $600 million will be provided to boost staffing and enhance existing services. The HA’s recurrent funding this fiscal year will rise to $75 billion, up 35 per cent from 2017-18 funding.
Mr Chan said that Hong Kong’s first District Health Centre (DHC), which opened last year in Kwai Tsing District, will be joined by six additional District Health Centres in the coming two years, with $650 million set aside to meet their recurrent expenditure. An additional $600 million will be allocated to establish interim “DHC Express” by non-governmental organisations for the remaining 11 districts.
A variety of environmental-protection measures were also announced by the Financial Secretary. They include the launching of a $2 billion pilot scheme to subsidise the installation of charging-enabling infrastructure for electric vehicles in car parks of private residential buildings, with a view to facilitating the installation of chargers by owners of individual parking spaces.
In addition, the Government will update its Clean Air Plan, giving consideration, among other things, to the further promotion of electric vehicles.
Mr Chan added that $80 million will be earmarked to fuel a pilot plan for electric public light buses. A $350 million pilot programme for electric ferries is also planned.
Underlining the Government’s commitment to non-polluting vehicles, Mr Chan said about 40 000 Euro IV diesel commercial vehicles would be phased out, beginning in the second half of this year, with $7.1 billion earmarked as ex-gratia payment for affected vehicle owners.
To promote recycling, it is proposed that a sum of not less than $300 million will be set aside annually, beginning 2020-21, to develop a waste-paper recycling scheme.
An additional $300 million will be provided to extend the Cleaner Production Partnership Programme, which encourages Hong Kong-owned factories to adopt cleaner production technologies, for five years.
Moreover, a $200 million Green Tech Fund will be established to support research and development and the application of decarbonisation and green technologies.
Mr Chan underlined the Government’s continuing commitment to resolving Hong Kong’s land and housing challenges, noting that various new development area projects would add more than 210 000 housing units in the medium to long term.
He said that 135 sites had been rezoned for housing, providing more than 147 000 public housing units and about 44 000 private housing units over the past six years. Another dozen sites are now being rezoned and will add 11 000 housing units, more than 90 per cent of which will be public housing. Another 25 sites will be rezoned in the coming year. They will yield nearly 85 000 units, over 90 per cent of which will be public housing.
Mr Chan said that total public housing production for the five-year period from 2019-20 to 2023-24 is expected to provide about 100 400 units, including about 74 400 public rental housing and Green Form Subsidised Home Ownership Scheme units.
As for private housing, Mr Chan said that about 19 600 residential units would be completed annually from this year to 2024, up some 25 per cent over the annual average of the previous five years.
He added that the 2020-21 Land Sale Programme will feature 15 residential sites, providing about 7 500 residential units. The Programme also includes six commercial sites, offering about 830 000 square metres of floor area.
Mr Chan said that infrastructure investment was central to building a better city and improving Hong Kong people’s quality of life.
The annual capital works expenditure is expected to reach $100 billion, on average, in the next few years, with total construction output increasing to about $300 billion a year.
The Government has also allocated $6.5 billion for a number of harbourfront development initiatives, including expanding the promenades along both sides of the Victoria Harbour to 24 kilometres.
Cultural initiatives include an additional $900 million allocated to the Art Development Matching Grants Scheme to promote the sponsorship of culture and arts from all sectors.
A liveable city, said Mr Chan, means a caring society.
“The current-term Government spares no effort to enhance social welfare services,” he added, noting that recurrent expenditure in social welfare reached $82.3 billion in 2019-20, up 26 per cent from 2017-18.
Mr Chan noted that the Chief Executive, last month, had announced a variety of recurrent measures created to benefit the elderly, as well as workers, low-income families, the unemployed, underemployed and underprivileged people. read more
Author Archives: hksar gov
In announcing the 2020-21 Budget today (February 26), the Financial Secretary, Mr Paul Chan, highlighted the importance of creating a liveable city, with particular focus on measures targeting healthcare, environmental protection and housing.
Following is the transcript of remarks by the Chief Secretary for Administration, Mr Matthew Cheung Kin-chung, at a media session at the Legislative Council Complex after the Financial Secretary presented the Budget today (February 26):
The Financial Secretary has just delivered the 2020-2021 Budget. It was not an easy task at all for this year’s Budget was prepared against the gloomy backdrop of looming uncertainties in the global economy, the aftermath of local social incidents and the outbreak of novel coronavirus disease.
We expect a budgetary deficit of about $139 billion, but the current-term Hong Kong Special Administrative Region Government has the courage to make optimal use of public resources, including our fiscal reserves accumulated over the years, to introduce a package of counter-cyclical measures amounting to $120 billion to support enterprises (especially the medium, small and micro enterprises), safeguard jobs, stimulate the economy and relieve people’s burden.
The key measures include the most eye-catching $71 billion cash handout scheme to provide $10,000 for each Hong Kong Permanent Identity Card holder to encourage and boost local consumption and relieve people’s financial burden.
Other measures to relieve the burden of businesses and individuals include concessionary tax reduction measures, waiver of rates, fees and water and sewerage charges, electricity charge subsidies, an additional month of allowance for social security payments, one-month rental payment for lower income tenants of public housing rental units and more.
The recurrent expenditure for the three key livelihood areas, that is, education, health care and social welfare is expected to exceed $280 billion accounting for nearly 60 per cent of the Government’s total recurrent expenditure or an increase of more than 50 per cent over the past five years. This demonstrates the Government’s commitment to address people’s needs, nurture talents and protect public health.
When examining the Government’s enormous effort to support enterprises, safeguard jobs, stimulate our economy and improve people’s livelihood in the fight against the deteriorating external economic and trade environment, local social conflicts and the epidemic, we should also take into full account the four rounds of relief measures costing $30 billion that have been introduced by the Government since last August, which were followed by over 220 new measures amounting to $48.7 billion in operating expenditure and $24.8 billion in capital expenditure announced by the Chief Executive in her 2019 Policy Address last year.
This afternoon, I, as the Chief Secretary for Administration, will chair the first meeting of the Steering Committee on Anti-epidemic Fund to review the latest progress, implementation framework and timetable of the 24 measures costing $30 billion to enhance Hong Kong’s capacity in combatting the epidemic and provide assistance or relief to enterprises (such as restaurants, retail, travel agents, transport sector, etc.) and members of the public that are hard hit by the epidemic or anti-epidemic measures. We will roll out the measures as soon as possible.
I must highlight that while the deficit will hit an all-time high, almost $120 billion, this is related to the cash payout scheme and other one-off relief measures which will not incur long-term financial commitments.
I strongly support this year’s Budget, and fervently hope that the Legislative Council will pass the Appropriation Bill as soon as practicable so that the measures can be implemented for the benefit of the community.
(Please also refer to the Chinese portion of the transcript.) read more
In his 2020-21 Budget today (February 26), the Financial Secretary, Mr Paul Chan, offered a wide range of measures to strengthen Hong Kong’s pillar industries while identifying new growth engines among emerging sectors.
“This will not only broaden the foundation of our economy, but also provide diversified and quality employment opportunities for young people to unleash their potential,” Mr Chan said.
On financial services, Mr Chan set out a series of proposals to fortify the city’s competitiveness as an international financial centre. Initiatives include:
* issuing green bonds totalling $66 billion over the next five years to develop Hong Kong’s position as a premier hub for green finance;
* waiving the stamp duty on stock transfers paid by Exchange Traded Fund (ETF) market makers when creating and redeeming ETF units listed in Hong Kong to spur development of the ETF market;
* issuing inflation-linked retail bonds (iBond) and Silver Bonds totalling not less than $13 billion; and
* providing tax concessions for carried interest issued by private equity funds and preparing to establish a limited partnership regime to encourage them to domicile and operate in Hong Kong.
Mr Chan also highlighted the importance of promoting innovation and technology as a driving force for future economic development. To this end, he announced a series of proposals. These include:
* earmarking $3 billion for Phase 2 of the Hong Kong Science Park Expansion Programme;
* exploring the development of a third InnoHK research cluster, in addition to the two research clusters currently being set up at the Science Park, one focusing on healthcare technologies and the other on artificial intelligence and robotics technologies;
* increasing the Government’s funding ratio under the Technology Voucher Programme to three-fourths from two-thirds, and raising the funding ceiling from $400,000 to $600,000, to promote the wider use of technological services and solutions among local companies; and
* providing $345 million for a pilot subsidy scheme to encourage the logistics industry to enhance its productivity through technology application.
To offer additional support for the tourism industry, which has been hit hard by the economic downturn and the novel coronavirus outbreak, the Financial Secretary earmarked more than $700 million for the Hong Kong Tourism Board to expand promotion and revive the industry once the epidemic is over.
Similarly, the Hong Kong Trade Development Council will receive $150 million in additional funding to support promotional activities and assist Hong Kong enterprises in exploring new market opportunities.
“Human capital is a valuable asset for our society,” Mr Chan said.
“To provide young people with more opportunities to broaden their horizons and apply their knowledge, the Government and relevant organisations have provided training, internship schemes, subsidies, etc. for young people to develop their strengths in different areas.”
Mr Chan unveiled various proposals to foster talent, including:
* boosting the Researcher Programme and Postdoctoral Hub to cover all technology companies conducting research and development in Hong Kong;
* setting aside $40 million to subsidise short-term internships for undergraduates and postgraduates taking STEM programmes at local universities; and
* increasing short-term internship opportunities in the Government and public organisations for students to almost 5 000 in 2020-21.
Mr Chan said that these and other measures in the Budget would help create “new areas of economic growth, with a view to increasing our revenue, promoting social development, coping with the challenges arising from an ageing population, and providing more quality employment opportunities.” read more
Following is a question by the Hon Chung Kwok-pan and a written reply by the Secretary for Commerce and Economic Development, Mr Edward Yau, in the Legislative Council today (February 26):
Some persons-in-charge of small and medium enterprises (SMEs) have relayed that many SMEs, having been hit simultaneously by the slowdown of the global economy, the uncertainties of the external environment and the disturbances arising from the opposition to the proposed legislative amendments that have persisted for half a year, have tremendous business difficulties. Such SMEs urgently need liquidity to tide over the difficult times so as to avoid layoffs or closing down of business. Although the Financial Secretary extended in August last year both the application period of the 80% Guarantee Product under the SME Financing Guarantee Scheme (SFGS) and the validity period of the relevant enhancement measures to June 30, 2022, and the HKMC Insurance Limited (HKMCI) introduced in December last year a new 90% Guarantee Product under SFGS, the procedure for banks to vet and approve SME loan applications is complicated and time-consuming and the eligibility criteria are stringent (such as requiring applicants to put up their properties as collaterals and submit documentary proofs of their business turnovers). As such, bank loans have failed to serve the function of “providing timely relief”. In this connection, will the Government inform this Council:
(1) of the respective numbers of applications under SFGS received by HKMCI in the previous and the current financial years to date as well as the year-on-year percentage change of such applications, with a breakdown of the numbers of applications by loan amount and the type of industry to which the SME applicants belonged;
(2) of the respective numbers of the relevant applications received and approved by HKMCI since the launch of the 90% Guarantee Product, with a breakdown by the type of industry to which the SME applicants belonged; and
(3) whether it will discuss with the banking industry the simplification of the procedure for vetting and approval of SME loan applications and the relaxation of the application criteria, so as to resolve the financing difficulties encountered by SMEs?
Small and medium enterprises (SMEs) are a major pillar of the Hong Kong economy. With the cash flow pressure faced by some SMEs under the current economic environment, the Government has been providing loan guarantee under the SME Financing Guarantee Scheme (SFGS) to assist SMEs in obtaining commercial loans, and has been introducing enhancements to the scheme as appropriate. Also, the Hong Kong Monetary Authority (HKMA) requires that banks provide funding support to SMEs as far as their credit policies and risk management principles allow.
Having consulted the Financial Services and the Treasury Bureau, our reply to the three parts of the question is as follows:
(1) The HKMC Insurance Limited (HKMCI) administers the 80% Guarantee Product and the 90% Guarantee Product under its existing SFGS to respectively provide 80% and 90% loan guarantee for enterprises at concessionary fee rates.
Since the launch of the 80% Guarantee Product in May 2012 and up to end January 2020, the HKMCI has received 19 510 applications and approved 17 475 of them, involving a total loan amount of about $73.1 billion and a total guarantee amount of about $58.5 billion. The approval rate was 99.4 per cent (Note). The approved applications are mainly from enterprises of the trading, wholesale and retail sectors (accounting for about 55 per cent of the approved applications), the manufacturing sector (accounting for about 19 per cent of the approved applications), and the engineering and construction (accounting for about 7 per cent of the approved applications) sector, etc.
The Government introduced three enhancement measures to the 80% Guarantee Product in November 2018, including reducing the guarantee fee by 50 per cent; increasing the maximum loan amount from $12 million to $15 million; and lengthening the maximum loan guarantee period from five years to seven years. Since then, we have seen a marked increase in the number of applications received and approved, as well as the amount of loans involved. Relevant figures are set out in the table below:
Applications Approved under the 80% Guarantee Product
|Number of Applications Received
||1 932||2 965||+53%|
|Number of Applications Approved
By Loan Size
|Total Amount of Loans Involved for Approved Applications ($)||7.277 billion||13.772 billion||+89%|
(2) The 90% Guarantee Product was launched on December 16, 2019 and the market response is positive. As at end January 2020, the HKMCI has received 187 applications and approved 155 of them, involving a total loan amount of about $272 million and a total guarantee amount of about $245 million. The approval rate was 100 per cent (Note 1). The approved applications are mainly from enterprises of the trading, wholesale and retail sectors (72 cases, accounting for about 46 per cent of the approved applications) and the manufacturing sector (nine cases, accounting for about 6 per cent of the approved applications).
(3) To strengthen funding support to SMEs, the HKMA has established a banking sector SME lending co-ordination mechanism. Three meetings were held in October 2019, January and February 2020 respectively under the co-ordination mechanism. The meetings were attended by representatives from the Hong Kong Association of Banks, major banks active in SME lending, and the HKMCI. Banks attending the meeting agreed to adopt a series of measures to strengthen support to SMEs. Key measures adopted by banks include making good use of the countercyclical capital buffer released by the HKMA to support SMEs; allowing SMEs to extend or reschedule their repayment period so as to relieve their cash flow pressure, having regard to the HKMA’s clarification of credit risk management requirements; introducing relief measures targeting specific sectors (such as the import and export and transportation sectors) to facilitate fund flow management by SMEs; and following the guidelines set out in the “Hong Kong Approach to Corporate Difficulties” to handle SMEs encountering financial difficulties with sympathy and enhanced communication, and to avoid withdrawing credit lines hastily or taking other credit actions that will adversely affect the customers’ business operations.
A number of banks have responded to the HKMA’s call by proposing various measures to help SMEs tide over this difficult time. The HKMCI and banks have also simplified the application procedures for the SFGS, such as by accepting other forms of financial proof in lieu of financial statements where appropriate. In view of possible changes to loan guarantee terms as necessitated by banks’ extension of loan tenors and trade financing repayment schedules, the HKMCI has streamlined procedures to expedite processing of bank applications for revision of loan terms.
The HKMA, in collaboration with the HKMCI and banks, will also hold briefing sessions for SMEs to explain banks’ lending procedures and the SFGS. The HKMA, together with the banking sector, will continue to maintain close dialogue with the commercial sector with a view to providing appropriate support to SMEs and helping them cope with the economic challenges.
Note: Excluding cases withdrawn by participating lenders and applicants, and those under processing. read more
Following is a question by the Hon Chan Chi-chuen and a written reply by the Secretary for Commerce and Economic Development, Mr Edward Yau, in the Legislative Council today (February 26):
It has been reported that on December 27 last year, the Police used on its social networking platform a photograph, the copyright of which was owned by an online media organisation, without obtaining prior consent from the organisation. In response to queries on their copyright infringement, the Police argued that under section 54A of the Copyright Ordinance (Cap. 528), “[f]air dealing with a work by the Government…for the purposes of efficient administration of urgent business does not infringe the copyright in the work”. Some members of the public and media organisations are worried that the Police may abuse the said provision, making the protection for copyright owners under the Copyright Ordinance exist only in name. In this connection, will the Government inform this Council:
(1) whether it will immediately put forward a clear definition for the term “urgent business” in section 54A of Cap. 528, so as to allay the concern of members of the public and media organisations; and
(2) whether it will consider, prior to invoking the provision and using the photographs and video clips the copyright of which is owned by media organisations, informing the media organisations concerned and seeking their consent; if so, of the details; if not, the reasons for that?
The Copyright Ordinance confers to copyright owners a set of exclusive rights to do certain restricted acts in relation to their copyright works, including copying the works and issuing copies of the works to the public. At the same time, the Copyright Ordinance also sets out a number of exemption provisions to prescribe certain permitted acts which may be done (for example, for the purposes of research, private study, education, criticism, review, reporting current events, administration of urgent business by the Government, proceedings of the Legislative Council and judicial proceedings), so as to allow for reasonable uses of other people’s copyright works without infringing copyright. Whether a specific act constitutes copyright infringement under particular circumstances is subject to the actual circumstances of the case.
Regarding the two parts of the question, our reply is as follows:
(1) Section 54A of the Copyright Ordinance is one of the copyright exemption provisions. Pursuant to this section, fair dealing with a copyright work by the Government is permitted for the purposes of efficient administration of urgent business. As explained by the Government when the provision was enacted, the provision does not provide for any legal definition for the term “urgent business”, with the intention that the term should be given its plain and literal meaning, namely, business that needs to be dealt with immediately.
(2) The purpose of providing copyright exceptions is to balance the legitimate interests of copyright owners with the need for reasonable uses of copyright works by users. If users need to invoke certain copyright exemptions, it would be desirable for the users to inform the copyright owners as far as practicable. Nevertheless, it remains that, with the exemption provisions therein, the Copyright Ordinance allows users to reasonably use copyright works under prescribed conditions without having obtained the consent of the copyright owners. read more