The Chamber welcomes the Budget delivered by Financial Secretary Paul Chan on 27 February, which we believe has invested wisely in Hong Kong’s future amid uncertain times. In his speech, the Financial Secretary said it was difficult to predict with confidence the outlook for Hong Kong’s economy given the volatile global business climate.
This uncertainty has also highlighted the fact that Hong Kong’s economic well-being is joined at the hip to the external business environment. To ensure we are prepared for the disruption caused by changing global markets, the Financial Secretary unveiled a number of measures to diversify our economy, with a particular focus on the innovation and technology (I&T) sectors.
This plan dovetails well with the Chamber’s call for policies to address the challenges facing the business community and for targeted measures to fast-track I&T development. The announcement of funding support – such as the $5.5 billion allocated for the development of Cyberport 5 – will encourage more companies to set up in Hong Kong, and provide career opportunities for young people.
A thriving I&T sector will also reinforce our standing as one of the world’s leading centres for finance and business, which should attract more corporates to set up their regional headquarters (RHQ) here. The Chamber hopes to see more initiatives being rolled out, such as tax concessions, to increase our attractiveness to RHQs.
The focus on I&T does not mean that our pillar industries were forgotten. In financial services, for example, the Financial Secretary discussed new measures such as tax concessions for marine insurance, as well as ongoing initiatives in the areas of green finance and improving the quality of listed companies.
Proposals such as the additional $1 billion injection into the BUD Fund are also very welcome to help SMEs, who are the backbone of our economy, weather the current uncertainty.
HKGCC has previously suggested enhancing the role of the Tax Policy Unit (TPU) and we are therefore pleased to see its “promotion.” It will now come directly under the Financial Secretary’s Office and will hopefully be in a position to bring about improvements to the tax system more quickly.
There are two areas, however, where we feel the Budget has fallen short. Firstly, there doesn’t seem to be much effort to introduce regulatory impact assessments (RIA) into the policymaking process. We would like to see more urgent action on this.
Secondly, while we welcome the increase in funding for universities and researchers to develop talent that the I&T industry will need, they do not address the acute skills and manpower shortages that businesses across many sectors are already facing. We remain hopeful that more concrete policies in these two key areas will soon emerge.