No doubt our Financial Secretary Paul MP Chan had his work cut out in drafting his latest budget, which he revealed on 22 February. Crafting a plan to continue supporting businesses and citizens, as well as relaunching Hong Kong to the world, while keeping an eye of the growing deficit was no easy task.
As there are no signs that Hong Kong has a structural deficit, the forecast deficit of HK$54.4 billion for 2023-24 is acceptable given the pressures that the pandemic put on our coffers. In addition, he forecasts returning to a HK$9.5 billion surplus by 2024-25. In our budget submission to the Government on 19 January, we stressed the importance of providing short-term relief measures – many of which the Financial Secretary took up – to help citizens and SMEs survive the start of the year until the economy regains steam.
The decision to implement another round of consumption vouchers in two tranches totalling $5,000, which the Chamber had recommended to stimulate market demand and fast-track recovery, is also good news. These, together with reductions in salaries tax and rates concessions, electricity subsidies and extending the Public Transport Fare Subsidy, will put more money in people’s pockets to stimulate consumption and the planned “Happy Hong Kong” campaign targeted at the general public.
There have been some grumbles that tax and rates concessions were trimmed compared to the last budget. As these will mostly affect businesses and people when the economy has hopefully rebounded, I believe this was to allow the Government to target the immediate needs of the community. Reducing profits tax and providing rates concessions for non-domestic properties, together with 50% rental or fee concessions for tenants of government premises, will help SMEs, along with the extension for applications for the SME Financing Guarantee Scheme.
Significant attention and funds were given to encourage tourists to return and boost Hong Kong’s image globally through mega events. Not only will this plan inject some badly needed vitality into the tourism, convention and exhibition, and entertainment sectors, which were very badly hit by the pandemic, it will also benefit other sectors. Hong Kong’s image among the international community has taken a beating in the past few years. We can showcase Hong Kong to encourage people to come here and see for themselves that we are a vibrant, open and dynamic business and travel destination.
While some people would have liked to have seen more resources being put into addressing our talent shortage, the Financial Secretary did announce plans to foster the development of our home-grown talent across a wide range of sectors, including fintech, aviation, maritime, I&T and construction. The doubling of tax deductions from 100% to 200% for MPF voluntary contributions made by employers for employees over 65 will hopefully help to retain experienced workers in the workforce.
While the budget also aligned with the Government’s long-term policy objectives of creating a greener city, and other sectoral developments, the key emphasis remains to jumpstart Hong Kong, in particular supporting the domestic economy while getting businesses and tourists back to this unbeatable city. We really hope Hong Kong will fully recover its former vitality in 2023.