In his Budget 2024-25 announcement last month, Financial Secretary Paul Chan revealed a series of measures aimed to spur economic recovery, providing a viable blueprint to revive Hong Kong’s sluggish economy.

The theme of the Budget, “Advance with Confidence. Seize opportunities. Strive for high quality development,” says it all. The Financial Secretary’s proposals reflect a very targeted, yet prudent, approach to spending. These measures will stimulate local businesses while having a positive effect on investor sentiment and international confidence in Hong Kong.

We are pleased that the Budget included a number of the Chamber’s suggestions, including removing with immediate effect all property cooling curbs as a short-term relief measures. Making the bold move to axe the Special Stamp Duty (SSD), Buyer’s Stamp Duty (BSD) and New Residential Stamp Duty (NRSD) lifts the burden from buyers and homeowners, while pushing up demand. Despite the HK$101.6 billion deficit forecast for 2023/24, Chan also announced a one-off rebate on profits tax, salaries tax and tax under personal assessment.

The blueprint also provides support for our SMEs, which are the bedrock of Hong Kong’s economy. We welcome the two-year extension and additional HK$10 billion injection for the SME Financing Guarantee Scheme. SMEs are also eligible for subsidies in sectors such as food & beverage and retail, allowing them to deploy digital solutions. Equally helpful is the establishment of a “digital identity of enterprises,” with the purpose of verifying enterprises’ authorized signatures online.  These measures will boost SMEs’ growth while reducing costs.

The Financial Secretary is also prioritizing technology-based and green initiatives and diversification from traditional sectors like trade and financial services, land and property. Spending on new sectors will sharpen Hong Kong’s competitive edge and stimulate high-quality growth in the longer term.

Significantly, many of the Budget proposals zoom in on burnishing Hong Kong’s international image and appeal. For instance, the tourism sector will receive HK$1.09 billion, allowing for the execution of world-class mega events and unique cultural experiences. Giving the travel industry a shot in the arm will no doubt translate to near-term economic growth, with high numbers of high-spending visitors benefiting other related industries as well as the night economy. Meanwhile, Economic and Trade Offices are planned for destinations around the world such as Saudi Arabia, Egypt and Turkey, while double taxation agreements with more countries will increase trade and help businesses expand overseas. 

The Government’s multi-pronged efforts to pursue solid development in the medium- and long-term will surely result in sustainable economic recovery. While 2024 is still fraught with uncertainties and challenges, I believe the outlook for Hong Kong is bright. Together, we must face the future with positivity and confidence while seizing every opportunity to enhance the momentum of growth.

Patrick Yeung

ceo@chamber.org.hk