As Hong Kong returns to normalcy, the Government has rolled out multiple measures to boost economic growth. Despite some improvements, recovery is still below the pre-pandemic level.
Financial Secretary Paul Chan will deliver his Budget speech at the end of the month. A multi-pronged approach is needed to reinvigorate the economy and improve people’s livelihood. According to his earlier forecast, the consolidated fiscal deficit in 2023-24 is expected to be more than $100 billion, far exceeding the original estimated $57 billion at the beginning of last year.
Even though Hong Kong has returned to economic growth, as an externally oriented economy and amid ever-changing geopolitical complexities, there is still some way to go before reaching pre-pandemic levels, with exports of goods remaining subdued.
Meanwhile, the property and stock markets have been stagnant for some time, while revenue from land sales is substantially lower than expected. These have a direct impact on the Treasury.
Given tourism and private consumption are among the key drivers of economic growth, a number of initiatives have been launched, including “Night Vibes Hong Kong,” to revive the city’s after-dark economy. Nevertheless, people’s willingness to spend depends on their confidence in the economic outlook. As such, revitalizing the economy is the only way to get to the root of the problem.
I have repeatedly urged the Government to cut the stamp duty on stock trading, as well as withdraw or suspend the “harsh measures” for the property market to stimulate the stock and property markets.
Notwithstanding the responses set out in the Policy Address last October, trading activities have not shown any significant sign of improvement. In view of this, there are calls for authorities to take into careful consideration a further adjustment to relevant measures in the upcoming Budget.
However, public revenues cannot be increased simply by giving the night-time economy as well as the property and stock markets a boost. The key lies in creating strong impetus for growth and enhancing the city’s competitiveness. To this end, Hong Kong must hone its strengths in sectors such as finance, trade and logistics, strive to develop a headquarters economy and attract family offices.
In my opinion, a conducive environment is a prerequisite for attracting enterprises. For instance, more tax incentives should be offered to eligible enterprises setting up headquarters and family offices in Hong Kong. Measures to facilitate expatriates to apply for a working visa, accommodation, healthcare services and children’s education can also be introduced.
By enhancing our appeal as a great place to live and work, Hong Kong can attract more enterprises and talent to drive long-term social and economic development.