As you are no doubt aware, the Financial Secretary announced the Budget for 2016-17 last Wednesday, and the Chamber’s Economic Policy Committee welcomed representatives from the Financial Services and Treasury Bureau to brief our members on the Government’s vision. Below is a brief summary of things that caught our attention.
1) Government’s economic outlook a. Export outlook remains uncertain due to uneven economic development across the globe b. Economic growth will continue to be driven by domestic demand
2) Counter-cyclical relief measures a. Waive business registration fees for 2016/17 b. Waive licence fee for travel agents, hotels and guesthouses, restaurants, hawkers and operators with restricted food permits for one year c. Waive 75% profits tax for 2015/16, subject to $20,000 ceiling d. Waive 75% salaries tax and tax under personal assessment for 2015/16, subject to $20,000 ceiling e. Waive rates for four quarters, subject to $1,000 ceiling for each quarter f. One additional month of Comprehensive Social Security Assistance payment, Old Age Allowance, Old Age Living Allowance and Disability Allowance g. Launch a $500 million Pilot Technology Voucher Programme to support SMEs to use technological services and solutions
3) Support for technology, innovation, and industries a. [Manufacturing] Set aside $8.2 billion to promote smart production and research, and establish connections for advanced manufacturing industries b. [Universities] Use $2 billion to launch a Midstream Research Programme for Universities c. [SMEs/technology] Set up a $2 billion Innovation and Technology Venture Fund to invest in local technology start-ups, on a matching basis, in collaboration with private venture capital funds d. [SMEs/technology] Boost the R&D Cash Rebate Scheme to 40% e. [Startups/technology] Expand the Science Park to provide additional floor space (70,000 square metres) with an estimated cost of $4.4 billion f. [Startups/technology] Cyberport to earmark $200 million to invest in its start-ups g. [SMEs/technology] Inject $400 million to CreateSmart Initiative, with priority given to supporting start-ups and nurturing talent h. [Fashion] Allocate $500 million to support the development of fashion industry i. [Film] Inject additional $20 million into the Film Development Fund to promote locally-produced Cantonese films, funding for each film to double from $250,000 to $500,000 j. [SMEs/technology] Expand the scope of tax deduction for capital expenditure incurred for the purchase of IP rights from five to eight categories k. [Insurance/asset and wealth management] Allocate $100 million to take forward a three-year pilot programme to nurture talent
4) Others a. Establish the Housing Reserve that has $74 billion, with injection of $45 billion from 2015 and allocation, plus return, from 2014 b. Implement the ten year hospital development plan ($200 billion) c. Bond market development through the issuance of the third sukuk, the sixth issuance of iBond, as well as green bonds and silver bonds d. Implement a three-year measure (from 2015-16) to contain expenditure targeted at reducing expenditure by 2% in three financial year, with saved resources re-allocated to policy bureau for new services e. Strengthen cost control of public works by having comprehensive review of the guidelines on public works, and to reduce unnecessary design and contractual requirements f. Inject one-third of actual surplus of 2015-16 into the Future Fund and make long-term investments g. Establish an office in HKMA to facilitate infrastructure projects financing h. Establish a “single window” for documentation issues related to trade, with the first phase to be launched in 2018
5) Chamber’s voice a. Press release i.http://www.chamber.org.hk/en/media/press-releases_detail.aspx?ID=3560 b. CEO’s Op-ed i.http://www.scmp.com/news/hong-kong/article/1916514/firms-will-ride-out-storm-hong-kong-must-stick-free-market-principles
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