The Budget will be released at the end of the month with "supporting enterprises, preserving employment and stabilising the economy" as the major policy directions. In meetings with Financial Secretary Paul Chan in recent months, I have urged him to strengthen support for traditional industries, review anachronistic regulations, and enhance the tax system in order to maintain the sustainability of development in Hong Kong.
I hope the Government will address the city's problems while considering the needs of its citizens, making good use of the surplus to plan for future development and improve the business environment. We should not take society down the road to populism by simply currying favour with the public.
It is noteworthy that the Government recently suggested each property owner can only enjoy rates rebate on one property. If the new plan is implemented, it is estimated that it will cost $200 million to $300 million for the first two years and will take 18 to 20 months. In my opinion, the principle of rates concession is that both property owners and tenants who pay rates can enjoy the concessions. As rates rebate is not a long-term measure, the Government's present proposal is complicating simple matters.
On the other hand, since the Government issued its proposal of imposing a vacancy tax on first-hand private residential units last year, some Chamber members in the sector have told me they are worried that Hong Kong's free market advantage will be affected. As such, the business sector and I have reservations about this new policy.
There are overseas examples of a vacancy tax, but they have not been very effective. In addition, the vacancy rate in Hong Kong is not high. The principles of a free market economy and the simple tax system Hong Kong takes pride in should not be violated just because there are some empty flats in the city.
In fact, the business sector is willing to share the city's social responsibility. But if businesses are subject to constraints in all aspects, how can they have confidence to invest in the future of Hong Kong, create employment opportunities, and ensure tax revenue in the long term? I hope the Government will consider a more reasonable plan, for instance, extending the 12-month period of tax relief.
Amid a challenging external environment, Hong Kong's economic outlook cannot be seen as rosy. The SAR Government must implement long-term and forward-looking policies to attract foreign investors to set up bases in Hong Kong to enhance the overall competitiveness. Meanwhile, we must ensure the political participation of all sectors of Hong Kong, particularly the business community, to reduce the risk of the rise of populism.