For Immediate Release
The Hong Kong General Chamber of Commerce welcomes the Financial Secretary’s 2014-15 Budget Speech as a measured and prudent response to difficult economic times and the challenging future needs of society.
Chamber Chairman C K Chow said, “Hong Kong must adopt a prudent and balanced approach to our public finances, to ensure our long-term sustainability. The Financial Secretary’s Budget is a good step in that direction.” The Chamber strongly endorses the view that recurrent expenditure growth must be held to the level of overall economic expansion if we are to avoid structural problems in the coming decades.
The Government’s commitment to promoting environmental sustainability is welcomed by the entire community, and we are encouraged to see that the Government has earmarked $30 billion for waste recycling and treatment facilities. Other measures, including setting up a Recycling Fund,will help to improve our environment.
The Financial Secretary’s competitiveness theme is a long-cherished Chamber position. Measures to assist SMEs in upgrading their IT capabilities and cloud computing, which was the thrust of the Chamber’s Digital 21 Strategy Submission, financing exports and the development of new products will ensure that the backbone of our economy remains strong. The $130 million allocated for implementation of task force recommendations for enhancing retail skills is another welcome measure. The Chamber is also pleased to see that more R&D funding is being allocated to a wider scope of businesses, and universities, which is in line with our calls to sharpen Hong Kong’s competitiveness.
However, the Chamber believes more could have been done to help SMEs. “Cash flow is the life blood of small businesses, and we are disappointed that the Budget does not recognize this and provide for reduced profits tax rates on the first $2 million of taxable profits,” said Chamber CEO Shirley Yuen.
An additional concern raised by Chamber members is the dire need for morelabour. While efforts to enhance the productivity and skill sets of our own people are most welcome, we need more people, too. Plans to create 160,000 new jobs through the development of New Territories communities and infrastructure projects, not to mention new hotels, as well as expanding care facilities for the elderly,will boost the economy, but where will these people to fill these jobs come from?
“Planning for our future land requirements, including creating a land reserve, is prudent. We need to do the same in ourlabourmarket, so we hope the Government can seriously address this shortage,” said Mr Chow. “We welcome the Government’s detailed land usage proposals; now, let’s make sure we have the people to really make it happen,” he added.
The Chamber believes support for the third runway, as well as additional hotel sites in Kai Tak and MICE facilities, are crucial for Hong Kong’s future well-being, as the tourism and logistics sectors are two of our pillar economies.
“The third runway is crucial for Hong Kong, as we are one of the world’s top aviation hubs and the busiest air cargo centre,” Mr Chow said. “Similarly, we are glad to see the Financial Secretary has listened to our calls to facilitate the port and logistics operations in the Kwai Chung and Tsing Yi Container Terminals by studying the consolidation of the existing backup sites. Again, this will enhance Hong Kong’s long-term future competitiveness.
Adequate studies have been conducted in a number of areas, such as future demand for MICE (meetings, incentive travel, conventions and exhibitions) facilities. As such, it is time to get on with taking the steps necessary to maintain our competitive edge in such areas.
Despite the $12 billion budget surplus, and expectations for a further $63 billion in surpluses over the next five years, companies may expect to pay an additional $60 million in fees and charges, regardless of profitability or changing business conditions. While the one-off reduction in salaries and profits taxes are welcome, such an approach does not provide sufficient certainty to enable companies to plan for future expansion.
Measures such as the extension of stamp duty concessions and waiving the stamp duty on exchange traded funds (ETFs) are precisely the kinds of measures that will help grow our financial industry. “The financial stamp duty measures and plans to review taxation of corporate treasury activities are important to building our financial industry,” said Mr Chow. “These are real, long-term and reliable measures that will encourage investment and expansion of one of our pillar industries,” he added.
The HKGCC shares the Financial Secretary’s concern for Hong Kong’s long-term fiscal health, and whole-heartedly agrees there is little room for major tax hikes. Broadening revenues sources, preserving existing income and ensuring the long-term health of our people, our economy, our competitiveness and our finances are core principles shared throughout society.
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