In its latest Budget, the Government announced the complete withdrawal of “spicy measures” in the property market in response to appeals from various stakeholders. The move will not only put the brakes on the downward spiral and stabilize the market, but also serve to reassure people about the outlook for Hong Kong. As such, the business community should keep up with the pace of economic recovery by making proactive investments in the city.

The “spicy measures” were introduced more than a decade ago to manage demand. In recent years property transactions have been bleak – to the point that they were dampening investors’ as well as public confidence in the economic outlook. 

I repeatedly urged the Government to scrap all cooling measures, and the call was finally answered with Financial Secretary Paul Chan announcing the removal of all the curbs – Buyer’s Stamp Duty (BSD), Special Stamp Duty (SSD) and the New Residential Stamp Duty (NRSD) for second-time purchasers – with immediate effect. Even though growth may not be significant in the short term, the relaxation will help stimulate property transactions, stabilize the market and boost confidence, thus driving economic development and employment.

The business community is facing enormous challenges on the path towards economic recovery. I have conveyed to the Government that banks should refrain from demanding repayment of loans during this difficult time. In his Budget, Chan has instructed the Hong Kong Monetary Authority to maintain close communication with financial institutions and the commercial sectors, and to adopt an accommodating manner to help enterprises tide over their liquidity needs.

The Budget has also responded to requests for enhancing various support measures for SMEs. These include the two-year extension and additional HK$10 billion injected into the SME Financing Guarantee Scheme, raising the cumulative funding ceiling of the BUD Fund to help SMEs strengthen competitiveness and expand overseas as well as the Mainland, and a rebate on profits tax. Helping SMEs to overcome difficulties is conducive to revitalizing Hong Kong’s economy, thereby increasing tax and other revenues.

As one of the main drivers of development, Hong Kong’s commercial and industrial sector has always participated in the efforts to overcome challenges. In this critical period of economic rejuvenation, the authorities are working to boost growth by stabilizing the business environment and polishing Hong Kong’s image, as well as exploring potential markets both in the Mainland and around the world. The commercial and industrial sector should jump on the bandwagon and help to increase investment by taking action to reinvigorate the economy and, ultimately, propel Hong Kong’s development.

Jeffrey Lam

jeffrey@jeffreylam.hk