The Government announced today (February 23) that the place-specific flight suspension mechanism for Australia, Canada, France, India, Nepal, Pakistan, the Philippines, the United Kingdom and the United States of America will be ext… read more
The Financial Secretary, Mr Paul Chan, in his 2022-23 Budget today (February 23), made it a priority to ease the financial burden on enterprises and people’s livelihoods during the COVID-19 pandemic.
Among the initiatives announced are plans to issue a new round of electronic consumption vouchers, enhance various loan guarantee schemes and create more time-limited jobs.
Mr Chan said, counter‑cyclical measures in the previous two Budgets, together with the relief measures under the Anti-epidemic Fund (AEF), involved a total financial commitment of over $460 billion.
“The rapid spread of the virus and its profound impact have dealt a heavy blow to many people, disrupting both their life and work, and seriously affected the operations of small and medium-sized enterprises (SMEs), thus undermining confidence in the future,” Mr Chan said.
In light of the successful launch of the Consumption Voucher Scheme last year, the Financial Secretary announced a second round of the scheme, under which electronic consumption vouchers with a total value of $10,000 will be disbursed by instalment to each eligible Hong Kong permanent resident and new arrival aged 18 or above through suitable stored value facilities.
“With the help and concerted efforts of various parties, the scheme was effective in boosting the market sentiment, stimulating local consumption, and speeding up economic recovery,” Mr Chan said.
“It has also promoted the extensive use of electronic payment.”
Mr Chan said the new round of the scheme would benefit about 6.6 million people and incur about $66.4 billion of financial commitment.
Relieving people’s hardship
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Mr Chan announced a package of one-off relief measures to support people who have been affected by the epidemic. The measures include:
* Reducing salaries tax and tax under personal assessment for the year of assessment 2021/22 by 100 per cent, subject to a ceiling of $10,000. This measure will benefit 2.01 million taxpayers and reduce government revenue by $13.1 billion;
* Providing rates concession for domestic properties for four quarters of 2022‑23, subject to a ceiling of $1,500 per quarter in the first two quarters and a ceiling of $1,000 per quarter in the remaining two quarters for each rateable property. This measure is estimated to involve 2.99 million domestic properties and reduce government revenue by $11.7 billion;
* Granting each eligible residential electricity account a subsidy of $1,000;
* Providing an allowance to eligible social security recipients, equal to one half of a month of the standard rate of Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance; and
* Paying the examination fees for school candidates sitting for the 2023 Hong Kong Diploma of Secondary Education Examination.
The Financial Secretary said the Government would lower the threshold for the Public Transport Fare Subsidy Scheme from $400 to $200 from May to October this year, benefitting about 3.8 million commuters per month.
The application period of the 100% Personal Loan Guarantee Scheme will be extended for one year and the maximum loan amount per applicant will increase from six times to nine times of his/her average monthly income during employment, with the ceiling raised to $100,000.
Supporting enterprises
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To address the needs of businesses affected by the pandemic, preserve economic vitality and safeguard jobs, the Financial Secretary announced a raft of business relief measures. They include:
* Reducing profits tax for the year of assessment 2021/22 by 100 per cent, subject to a ceiling of $10,000. This measure will benefit 151 000 businesses and reduce government revenue by $1.2 billion;
* Providing rates concession for non‑domestic properties for four quarters of 2022‑23, subject to a ceiling of $5,000 per quarter in the first two quarters and a ceiling of $2,000 per quarter in the remaining two quarters for each rateable property;
* Waiving the business registration fees for 2022‑23. This measure will benefit 1.5 million business operators and reduce government revenue by $3 billion;
* Continuing to waive 75 per cent of water and sewage charges payable by non‑domestic households for eight months until November 30, 2022, subject to monthly ceilings of $20,000 and $12,500 respectively per household;
* Extending the waivers/concessions of the existing 34 groups of government fees and charges for 12 months starting from October this year. This measure will benefit a wide range of sectors (such as aviation, maritime, logistics, retail, catering, agriculture and fisheries, construction, tourism and entertainment) and will reduce government revenue by about $1.7 billion; and
* Continuing to grant the 75 per cent rental or fee concession currently applicable to eligible tenants of government premises and eligible short‑term tenancies and waivers under the Lands Department for six months until September 30, 2022.
To ease cash flow pressures of enterprises, the Financial Secretary said he would extend the application period of all guarantee products under the SME Financing Guarantee Scheme (SFGS). The Special 100% Loan Guarantee under the SFGS will also be enhanced by increasing the maximum loan amount per enterprise from the total amount of employee wages and rents for 18 months to that for 27 months with the loan ceiling raised from $6 million to $9 million, and by extending the maximum repayment period from eight years to 10 years.
Mr Chan said he has requested the Hong Kong Monetary Authority to extend the Pre‑approved Principal Payment Holiday Scheme for six months to the end of October this year.
To help SME exporters secure export financing from banks more easily, Mr Chan said the Hong Kong Export Credit Insurance Corporation (ECIC) plans to launch the Export Credit Guarantee Programme on a pilot basis in March this year. Under the programme, the ECIC will guarantee up to 70 per cent of the export financing of the banks’ policyholders, subject to a maximum limit of $50 million.
Job creation
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The Financial Secretary said the Government has earmarked total funding of $13.2 billion under the AEF to create time-limited jobs, numbering about 60 000 so far.
He also said he would set aside additional funding of $6.6 billion in the latest round of AEF measures, which would yield another 30 000 time‑limited jobs under the Job Creation Scheme.
For more details on the 2022-23 Budget, click here. read more
In his 2022-23 Budget today (February 23), the Financial Secretary, Mr Paul Chan, set out a raft of initiatives to ease pressure on businesses, particularly small and medium-sized enterprises (SMEs), and support the expansion of Hong Kong’s growth capacity.
Mr Chan set aside resources to spur the progress of industries such as innovation and technology (I&T), financial services, arts and culture, and tourism.
To promote investment in sectors that have good potential for contributing to the economy, the Financial Secretary increased the funding allocation to the Hong Kong Growth Portfolio, under the Future Fund, by $10 billion.
Of that amount, $5 billion will be used to set up a new investment fund, namely the Strategic Tech Fund, while the remaining $5 billion would be used to set up a GBA Investment Fund, which will focus on investment opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
Noting that the current-term Government had invested more than $130 billion in promoting the development of I&T, Mr Chan said he would allocate additional resources “to keep reinforcing the entire value chain and the I&T ecosystem”. Proposals include:
* earmarking an additional $10 billion to further promote the development of life and health technology;
* providing $440 million to strengthen support to the research and development activities of 16 State Key Laboratories and six Hong Kong Branches of Chinese National Engineering Research Centres in Hong Kong;
* doubling the amount of subsidy under the Technology Start-up Support Scheme for Universities to $16 million; and
* injecting $1.2 billion into the Construction Innovation and Technology Fund.
To promote I&T development in the financial sector, Mr Chan proposed allocating $10 million to the Fintech Proof-of-Concept Subsidy Scheme to launch a new round of the scheme this year.
Tax concessions to encourage eligible family investment management entities managed by single-family offices are also tabled in the Budget, with a view to further enhancing the wealth management sector.
“I believe that the proposal will enhance our attractiveness as a hub for family offices, deepen Hong Kong’s pool of liquidity and create more business opportunities for the financial sector and other professional sectors,” Mr Chan said.
With tourism being particularly badly affected by the COVID-19 pandemic, the Financial Secretary earmarked $1.26 billion to support and develop the tourism industry, including providing incentives to develop and launch tourism products, sponsor the training of practitioners, and support the work of the Hong Kong Tourism Board to revive the tourism industry.
“In light of fierce regional competition, we will get well prepared by providing additional resources for the promotion of cultural, heritage and green tourism projects with Hong Kong characteristics, enhancing tourism promotion and rolling out enticing promotional offers in a timely manner to attract tourists from outside Hong Kong,” Mr Chan said.
Building Capacity
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The Financial Secretary pinpointed land and manpower as the two major constraints on Hong Kong’s economic growth.
“In order to ease these constraints, we must make vigorous efforts to create land and nurture talent,” Mr Chan said.
“Doing so will not only make Hong Kong a better place in which to live and work, but also enable us to scale new heights in economic development, thereby maintaining social stability.”
The Financial Secretary set aside $100 billion from the cumulative return of the Future Fund to set up a dedicated fund to expedite the implementation of infrastructure works relating to land, housing and transportation within the Northern Metropolis.
The Northern Metropolis, an area covering about 300 square kilometres in the north of Hong Kong, will be home to some 2.5 million people and offer 650,000 jobs, including 150,000 in the I&T sector, upon full development.
Nurturing Talent
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To upgrade the manpower skills of the workforce, the Financial Secretary set out various initiatives. They include:
* increasing recurrent allocation up to $400 million as needed to enhance training for medical professionals;
* providing 500 more designated places to provide subsidies for students to take self-financing undergraduate programmes on healthcare;
* earmarking $10 billion for the completion of the works to upgrade and increase healthcare teaching facilities of universities to cope with about 900 additional healthcare training places;
* launching the Pilot Green and Sustainable Finance Capacity Building Support Scheme and the Pilot Scheme on Training Subsidy for FinTech Practitioners for the training of professionals;
* injecting $100 million into the Cantonese Opera Development Fund to support the training of practitioners, and allocating $37 million to provide professional training for conservators;
* allocating $1 billion to the Construction Industry Council to support manpower training; and
* raising the subsidy ceiling of the Continuing Education Fund to $25,000 and removing the upper age limit.
“The aim is to consolidate Hong Kong’s status as a financial, commercial and I&T centre as well as to raise our productivity and competitiveness in the long run.
“We may, by leveraging our advantages under ‘one country, two systems’, achieve co ordinated development with our neighbouring cities in the GBA, thereby creating enormous business opportunities and ample room for Hong Kong’s development,” Mr Chan said.
For more details on the 2022-23 Budget, click here. read more
The Government yesterday (February 22) exercised the power under the Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Cap. 599J) to make a “restriction-testing declaration” effective from 6pm yesterday, under which people (hereafter referred to as “persons subject to compulsory testing”) within the specified “restricted area” in Sha Tin (i.e. Chung Kwan House , Chung On Estate.) were required to stay in their premises and undergo compulsory testing. Persons subject to compulsory testing are required to stay in their premises until all such persons identified in the “restricted area” have undergone testing and the test results are mostly ascertained.
In addition, the Government had issued a compulsory testing notice yesterday to any person who had been present at the above building for more than two hours from February 9 to February 22, 2022, even if they were not present in the “restricted area” at the time when the declaration took effect, must undergo compulsory testing on or before February 24, 2022. As a mutant strain is involved, for prudence’s sake, vaccinated persons and persons who have recently been tested are also required to undergo testing.
The Government finished the compulsory testing exercise at around 12.45pm today (February 23) and is now carrying out enforcement actions in the “restricted area” to verify that all people in the “restricted area” have undergone compulsory testing. The Government will further announce the revocation time of the declaration.
Starting from around 12.45pm today, persons in the “restricted area” in Sha Tin who have undergone testing and are able to present SMS notifications with negative test results as proof of having undergone testing may leave the “restricted area” through the designated exit after providing personal information to a prescribed officer.
The Government set up temporary specimen collection stations in the “restricted area” yesterday and requested persons subject to compulsory testing to collect combined nasal and throat swab samples at the stations to undergo a COVID-19 virus test before 9.30pm yesterday. A total of about 2 000 persons had undergone testing. Amongst them, 95 preliminary positive cases were found and the Centre for Health Protection of the Department of Health will take follow-up action. Regarding cases tested preliminarily positive in the specified “restricted area”, the Government will provide health advice for persons tested preliminarily positive pending admission to hospitals or isolation facilities and disinfection products to these persons and their household members pending follow-up arrangement.
Moreover, the Government also assigned staff to visit about 730 households, among which 64 households did not answer the door. The Government will take measures to follow up.
The Government reiterates that enforcement actions will be taken seriously. Any person who fails to present an SMS notification with a test result as proof of having undergone testing breaches the compulsory testing notice and may be liable to a fine of $10,000. The person will also be issued with a compulsory testing order, requiring him/her to undergo testing within a specified time frame. Failure to comply with the compulsory testing order or the “restriction-testing declaration” is an offence and the offender may be liable to a fine of level 4 ($25,000) and imprisonment for six months. read more
Unveiling his 2022-23 Budget today (February 23), the Financial Secretary, Mr Paul Chan, reinforced the Government’s “all-out efforts” to overcome the COVID-19 pandemic, while maintaining sound finances and gearing up for recovery.
Mr Chan said he would adopt an “expansionary fiscal policy” to support the community to tide over the current challenges.
“At this critical time, we need to direct more resources to relieve people’s hardship and provide small and medium-sized enterprises (SMEs) with some breathing space so as to stabilise the economy and maintain public confidence,” the Financial Secretary said.
The Budget initiatives, he said, would focus on the following four main areas:
* Allocating adequate resources to support an all-out effort to win the fight against the epidemic;
* Relieving the hardship of Hong Kong’s people and its SMEs;
* Rendering support to the struggling economy and fostering a post-epidemic economic revival; and
* Investing for the future by planning ahead for the medium- and long-term development of Hong Kong’s economy.
Mr Chan said he expects Hong Kong’s economic performance to pick up in the second half of 2022 and achieve growth of 2 per cent to 3.5 per cent in real terms for the year as a whole.
The headline inflation rate and the underlying inflation rate are expected to be 2.1 per cent and 2 per cent respectively this year.
“All in all, I forecast a surplus of $18.9 billion for 2021‑22,” Mr Chan said.
Fiscal reserves are expected to be $946.7 billion by end-March 2022.
“It is estimated that the counter-cyclical measures (costing a total of over $170 billion) mentioned in the Budget, together with the spending in infrastructure projects and other items, will have a fiscal stimulus effect of boosting the economy by around three percentage points,” Mr Chan said.
Fighting the pandemic
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The Financial Secretary said that, so far, counter-cyclical measures as well as funding under the Anti-epidemic Fund (AEF), involved a total financial commitment of over $460 billion.
Given that the battle against the virus is “our overriding mission at present”, Mr Chan pledged to “deploy all available resources and take all necessary measures to fully support the anti-epidemic work”.
The Budget has set aside the following resources:
* additional funding of about $22 billion for the Food and Health Bureau to strengthen testing work, procure rapid antigen test kits and relevant services, and provide additional support for the Hospital Authority;
* additional funding of $6 billion for the Department of Health to procure more vaccines as booster doses for the general public;
* additional funding amounting to some $7 billion in total for relevant departments to procure anti‑epidemic items and services, implement anti‑epidemic measures, etc;
* total additional funding of $500 million to be allocated within two years for the Food and Environmental Hygiene Department to enhance environmental hygiene services; and
* a further injection of $12 billion into the AEF for the construction of various anti-epidemic related facilities.
Another $20 billion has been earmarked to meet other anti‑epidemic related needs if required, Mr Chan said.
New revenue streams
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Following a review of the rating system last year, the Financial Secretary unveiled proposals to introduce a progressive rating system for domestic properties to reflect the “affordable users pay” principle.
Changes under the revised system aim to grant rates concession in a more targeted manner, including:
* When a one-off rates concession is implemented in the future, allowing only those eligible owners who are natural persons to apply for rates concession for one domestic property under their name. Taking the rates concession ceiling of 2022‑23 as a reference, the new arrangement can save around $3.1 billion for the Government; and
* Introducing a progressive rating system for domestic properties. For domestic properties with a rateable value of $550,000 or below, it is proposed that rates be charged at the present level of 5 per cent of the rateable value. For domestic properties with a rateable value over $550,000, it is proposed that rates be charged at 5 per cent of the rateable value on the first $550,000 and at 8 per cent of the rateable value on the next $250,000, and then at 12 per cent on a rateable value exceeding $800,000.
“This can better reflect the ‘affordable users pay’ principle,” Mr Chan said, adding that about 42 000 domestic properties are expected to be affected, while government revenue would see an increase of about $760 million each year.
Revenue from profits tax, Mr Chan said, is likely to increase under new international tax reform proposals, known as BEPS 2.0, which have been drawn up by the Organisation for Economic Co‑operation and Development and may affect multinational enterprises (MNEs) in Hong Kong.
“The Government has been exchanging views with the affected MNEs on matters relating to the implementation of BEPS 2.0, and reaffirmed that we would preserve the advantages of Hong Kong’s tax regime in terms of its simplicity, certainty and transparency, maintain our territorial source principle of taxation as well as minimise the compliance burden on MNEs when implementing BEPS 2.0,” the Financial Secretary said.
“Taking into account these new revenue streams, we expect that the Government will start to achieve fiscal balance beginning from 2023‑24.”
Land and housing
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On the pressing issues of land and housing supply, the Financial Secretary estimated that the overall land supply in 2021‑22 can provide about 20 000 units, around 7 000 more than the supply target.
Looking ahead, the Government has identified some 350 hectares of land for the provision of about 330 000 public housing units to meet the demand for about 301 000 public housing units in the coming 10 years, Mr Chan said.
On private housing, it is estimated that the completion of private residential units will average over 19 000 units annually in the five years from 2022 onward, representing an increase of about 14 per cent over the annual average of the past five years.
Considering the factors and taking into account the catch-up growth after the epidemic, the Financial Secretary forecast that Hong Kong’s economy will grow by an average of 3 per cent per annum in real terms from 2023 to 2026, slightly higher than the trend growth of 2.8 per cent during the decade before the pandemic.
“This year marks the 25th anniversary of Hong Kong’s return to the motherland, a landmark occasion that can usher in the start of a new chapter in Hong Kong’s development,” Mr Chan said.
“The implementation of the National Security Law and improvements to the electoral system have brought Hong Kong back on a track focusing on development. We share the same dream with our country. Together and united, we can build a better home with courage, wisdom, confidence and action.”
　　For more details on the 2022-23 Budget, click here. read more