Budget 2020/21

Business

Budget Address 2021: tax concession reduced by half

Hong Kong’s Financial Secretary Paul Chan Mo-po on Wednesday announced salaries tax breaks of up to HK$10,000 while raising stamp duties on stock transfers from 0.1% to 0.13%.  With 1.87 million Hongkongers benefiting from the tax break, government revenue will be reduced by HK$11.4 billion due to the waivers, said Mr Chan.  Last year’s tax waiver was capped at HK$20,000.  Meanwhile, the stamp duty increase will be applied to both buyers and sellers. This is the first increase since 1993, provoking complaints from the securities industry.  After the announcement, Hong Kong Exchanges and Clearing’s share price recorded a 9% drop The Hang Seng Index faced its biggest drop of nearly 3% since May last year.  Cheung Tsz Wai, a 33 year old Uber driver, said he is disappointed in the budget. “It is no help to citizens like me,” Mr Cheung said.  “During the pandemic, everyone faced a financial crisis,” Mr Cheung said. “Not only the government did not distribute welfare this year, but they even reduced all kinds of allowance and subsidies.” Agnes Cheung, director and head of Tax of BDO Limited, said the budget was “as expected” and “shortsighted”. Ms Cheung said BDO had wanted a tax deduction for rental expenses, but the budget did not address the item this year.  “There are only “sweeteners” for the property owner from Home Loan Interest Deduction, but nothing for the rental paying group,” said Ms Cheung. “It just focuses on the current year measures, saving expenses, but didn’t take a broader approach to target Hong Kong long term economy growth.” Webster Ng, president of the Taxation Institute of Hong Kong, said the measures were normal. “Additional revenue from stamp duty will make room for tax relief,” he said.  “In this year, everybody including the government is suffering, we are all …

Society

Budget Address 2021: No cash handout amid recession; $5,000 e-vouchers for eligible residents

Financial Secretary Paul Chan Mo-po announced in his budget speech Wednesday there will be no cash handout for this financial year. But electronic vouchers of HK$5,000 will be issued in instalments to each Hong Kong permanent resident and new arrival aged 18 or above to encourage local consumption. The measure, which involves about HK$36 billion, is expected to benefit more than 7.2 million people, Mr Chan said.  The government has not said yet where the vouchers can be spent or how they will be given out. “The HK$5,000 e-voucher cannot tackle the current situation and provides limited support to citizens who have been struggling throughout the pandemic,” said Owan Li, Tai Kok Tsui North district councilor.  The numbers have been grim. Under the global sweep of the coronavirus, Hong Kong’s economy has shrunk by 6.1% for two consecutive years, hitting the highest annual decline on record.  The unemployment rate surged to 7% in the fourth quarter of 2020, reaching a 17-year high.  Tourism-related sectors are hard hit as they reached the highest jobless rate since SARS in 2003.  Retail, accommodation and food services sectors have suffered a surge in the unemployment rate to 11.3%. Tourism sectors have frozen with extensive global travel restrictions, and the export travel service plummeted by 90.5% “I actually agree with the government decision to not launch another cash handout since it has not been effective,” said Angus Chan, an employee dismissed from the InterContinental Hotel during the pandemic and now works in the Rosewood Hotel.  He has one to two no-pay leave days per week at the new job, and some of his shifts are cut, he said.  As the world continues to restrict travel, the hospitality industry is uncertain about when it will recuperate from the pandemic. Small and medium enterprises are hoping the …

Business

Hong Kong budget plan subsidizes employment programmes under weak economy

  • The Young Reporter
  • By: BellaHuang、Cynthia Lin、ShukmanSo、Sunny SunEdited by: Mark Chen、AlecLastimosa
  • 2020-02-27

The Hong Kong government will provide additional annual funding of $30 million for employment programmes of the Labour Department to relieve job loss and financial pressure on individuals and companies, said Financial Secretary Paul Chan Mo-po in the Feb 26 budget plan. The economy in Hong Kong has been hit hard by the outbreak of the coronavirus and months of anti-government protests, which makes the labour market subject to huge pressure. According to the Census and Statistics Department, the seasonally adjusted unemployment rate in Hong Kong has risen to 3.4% from November 2019 to January 2020.  Over the same period, the employed population has decreased by over 10,000 to 3.80 million, and the number of people available for work has dropped by around 16,300 to 3.93 million. "The labour market eased further as economic conditions continued to worsen," said Law Chi-kwong, Secretary for Labour and Welfare. "The year-on-year decline in total employment widened further," he added. Dr Law said that the dramatic fall in employment rate signified that some people may have chosen to leave the labour force after losing their jobs. In light of the worsened employment situation, Paul Chan encourages employers to hire the elderly, the disabled and young school leavers by raising the ceiling of on-the-job training allowance under different employment programmes. The Youth Employment and Training Programme is a pre-training programme for all young school leavers aged 15 to 24. Participants of the programme can apply for one-month internships provided by the government, welfare agencies and private enterprises, as well as an internship allowance of $45,800. "I came to Hong Kong last year and worked as a handyman. But our industry has been affected by anti-government protests since last September," said Wong Tsz-Hong, 23, who has been working after graduating from high school in Foshan, Guangdong. …

Business

Health sector calls for wise spending on $75 billion fund for Hospital Authority

  • The Young Reporter
  • By: Tomiris Urstembayeva、Han Xu、Leone Xue、RonaldFanEdited by: Tomiris Urstembayeva、Han Xu、Leone Xue、RonaldFan
  • 2020-02-26

Financial Secretary, Paul Chan, has made the fight against COVID-19 a priority in this year's budget. In his speech in Legco on Wednesday, he promised $75 billion will be granted to the Hospital Authority, however, some professionals worried that the budget is not going to be spent wisely.  "They are not managing their money effectively. The government should be monitoring how the HA uses the money effectively and properly," said Cyrus Lau Hoi Man, a registered nurse and an officer of Hong Kong Allied Health Professionals and Nurses Association. Out of the $75 billion, $30 billion will be spent on setting up Anti-epidemic Fund to facilitate the provision of prevention supplies by sourcing them worldwide, while supporting local production to satisfy soaring demand.  "Making good use of fiscal reserves to support enterprises and relieve people's hardship is certainly in line with our people's expectations towards the government under the current difficult environment," said Financial Secretary, Paul Chan Mo-po. The Hospital Authority will get $600 million to increase manpower and improve the quality of. Services. Another $650 million will go toward supporting the District Health Centre in Kwai Tsing and to set up six more centres around Hong Kong in the coming two years.  "(We) will continue to allocate resources to promote district-based primary healthcare services, with a view to enhancing the public's capability in self-health management and providing community support for chronically ill patients," said Mr Chan.  Rehiring retired doctors and nurses is one of the ways the government is planning to solve the doctor shortage. But according to Mr Lau, this solution is only "a bottle of water to put out a big fire" as retired doctors are not as "energetic" as the younger ones. He also thinks that it's necessary to propose "punishment" to avoid any unfairness in …

Challenges that local businesses are facing

  • 2020-02-26
  • The Young Reporter
  • By: SamuelMo、Carol Mang、Moon LamEdited by: SamuelMo、Carol Mang、Moon Lam
  • 2020-02-26

Government is pumping money for businesses amid the outbreak of the coronavirus. The Financial Secretary has released measures, including reducing profit tax, waiving the rates, and subsidizing the electricity bills, to offer relief to businesses amid the coronavirus outbreak