Budget relief measures to ease Hong Kong's financial woes
The aims of this year's budget are "supporting enterprises, safeguarding jobs, stimulating the economy and relieving people’s burden", Financial Secretary, Paul Chan Mo-po said in his fourth budget speech in the Legislative Council this morning.
Despite an expected decline in government revenue next year, a cash payout of $10,000 will be distributed to about seven million local permanent residents aged 18 and above. That will cost about $71 billion in taxpayers' money.
"The government has to increase public expenditure amid an economic downturn to stimulate the economy and ride out the difficult times with members of the public." Financial Secretary, Paul Chan told legislators.
The aim of the payout is to "encourage and boost local consumption and relieve people’s financial burden," he said.
The $10,000 is expected to be distributed in the Summer, Mr Chan explained in the press conference after the budget speech.
Salary tax and profit tax will also be reduced by up to 100% with the ceiling of $20,000.This measure will cost the government $18.9 billion, benefiting about 2.05 million taxpayers.
The government will also be waiving rates in respect of residential properties for four quarters of 2020-21, with a ceiling of $1,500 per quarter for each rateable property, remaining the same as last year.
The proposed tax reduction is not applicable to property tax. However, individuals with rental income can enjoy tax reduction under personal assessment,
Businesses can secure low-interest loans of up to $2 million under the SME Financing Guarantee Scheme to help them overcome the economic downturn. That will cost the Treasury up to $20 billion.
Enterprises will also benefit from waiving of rates for non-domestic properties, business registration fees and registration fees for all annual returns in the coming year.
The Financial Secretary also pointed out that even though the expected fiscal deficit will reach an all-time high of $139.1 billion next year, the long-term financial commitments will not be incurred as most of the deficit is related to the one-off relief measures.
The estimated total expenditure of the government will reach $731.1 billion, and the estimated total revenue is $572.5 billion in the coming financial year.
As for the allowances, the government will provide an extra allowance to eligible social security recipients, including citizens who receive Comprehensive Social Security Assistance payments, the disabled and the elderly.
For students, the government will pay for the examination fee for candidates of the 2021 Hong Kong Diploma of Secondary Education Examination, at a cost of $150 million.
In order to provide more resources to the elderly services, the government will provide a number of 3000 additional home care quotas to frail elderly, while an additional 1000 community care service vouchers will be given to the elderly with moderate or severe impairment in the coming year.
Elderly service units will be subsidised for an additional $75 million in the coming year. The subsidy will be used for providing soft meals to elderly with swallowing problems.
Even though the budget is aimed to help the general public, some citizens believe that their needs are being overlooked by the government.
"Middle-class citizens have been affected the most, the government allocates more subsidies to the elderly instead of giving them, I think the elderly have enough subsidies," Ms Ku Shui Kam, 54, a businesswoman, said.
She also pointed out that the government does not have a comprehensive plan for different classes. Some have already got sufficient subsidies but the government still allocates more for them, which she thinks it's not fair.
《The Young Reporter》
The Young Reporter (TYR) started as a newspaper in 1969. Today, it is published across multiple media platforms and updated constantly to bring the latest news and analyses to its readers.
Lessons from SARS: what Hong Kong learned in fighting the coronavirus
Challenges that local businesses are facing