Later this month, the Financial Secretary will deliver his Budget amid a deeply challenging business environment. Our economy has been under unprecedented pressure following months of external and domestic turmoil.
The latest economic figures make for grim reading. Retail sales in November were down 23.6% compared with the same month last year, while tourism arrivals fell 56% for the same period. Shops, hotels and restaurants have been worst hit by the unrest, but the ripples from the economic downturn will affect many other businesses in Hong Kong and their employees, as the unemployment rate, which now stands at 3.3%, continues to rise.
Therefore, our first priority in the Chamber’s submission to the Financial Secretary is for immediate, short-term measures to ease cashflow issues for businesses, such as paying employers’ MPF contributions and waiving business registration fees. These will throw a lifeline to companies that are suffering the most, particularly SMEs.
At the same time, we must also look to the longer term, so our submission contains a number of proposals to strengthen our foundations as we rebuild our city and reputation.
The first is a better regulatory process to ensure businesses are not hobbled by out-of-date or unnecessary rules. This would also help build bridges between the Government and the people by increasing the transparency of the policymaking process.
We also need to step up efforts to make our city greener, as this is an area where we are slipping behind many other global cities. Our suggestions include government incentives for energy-saving technologies, and more funds to support recycling and electrifying transport.
Underpinning Hong Kong’s success has long been our competitive tax regime. To stay relevant in this area, we suggest measures including incentives to encourage the establishment of Regional Headquarters in the city, and enhanced tax concessions for R&D activities.
Looking beyond the Budget, as we recover from months of violence, we also need to communicate Hong Kong’s unique attractions. For example, we are in a prime position as the Greater Bay Area develops. The results of the Chamber’s latest GBA survey reflects the business community’s optimism about this initiative, and the popularity of our missions to GBA cities shows that our members are actively exploring these opportunities.
Twenty-twenty may be a tough year for many companies in Hong Kong, but as we move into the new decade, we are optimistic that we can retain our crown as the best place in Asia to do business.