Rainbow amidst gloom: Relief measures come in waves
1 March 2020
Hong Kong has been buffeted by multiple headwinds with economic and social development among the hardest hit since last year. Weaker global economic growth, coupled with the lingering US-China trade conflict and the social incidents involving violence which has spanned over six months, has dealt heavy blows to the development of our society, economy and people's livelihood. Then came the novel coronavirus outbreak which has further exacerbated the situation.
The local economy recorded a meagre growth of 0.6% in the first half of last year (2019) and took a nose dive in the second half, contracting by 1.2% for the year as a whole. This is the first annual decline in a decade (since 2009), a stark contrast to the solid growth in the past two years.
|
|
The Budget this year (2020-21) is a breakthrough against the backdrop of the epidemic. Under such exceptional circumstances, the Government has taken bold and pragmatic steps by making use of the long-accumulated fiscal reserves to implement counter-cyclical measures. Amounting to a generous $120 billion, these measures aimed at “supporting enterprises, safeguarding jobs, stimulating the economy and relieving people’s burden”. In line with public expectations, one of the measures is to provide a cash payout of $10,000 to Hong Kong permanent residents aged 18 or above, with a view to encouraging and boosting local consumption while relieving people’s financial burden. This will involve an expenditure of about $71 billion and is expected to benefit about seven million people. We aim to start the disbursement this summer. The Budget, with endeavours to sustain the momentum of economic growth, stabilise the economy and support the employment market, is a clear demonstration of the determination and commitment of our political team to tide Hong Kong over the hardship.
Other benefitting initiatives of the Budget include reducing salaries tax and tax under personal assessment for the year of assessment 2019/20 by 100%, subject to a ceiling of $20,000; and waiving rates in respect of residential properties for four quarters of 2020-21, subject to a ceiling of $1,500 per quarter for each rateable property. The two measures will benefit 1.95 million taxpayers and 2.93 million domestic properties respectively.
On poverty alleviation and support for the disadvantaged, the Government will provide an extra allowance equal to one month of the standard rate Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance. Similar arrangements will apply to recipients of the Work Incentive Transport Subsidy. This will involve an expenditure of about $4.225 billion. Besides, the Government will pay one month’s rent for lower income tenants living in public rental units, involving an expenditure of about $1.829 billion. It will also pay the examination fees for school candidates sitting for the 2021 Hong Kong Diploma of Secondary Education Examination, involving an expenditure of about $150 million.
Education, healthcare and social welfare, which are the areas closely related to people’s livelihood, have remained the Government’s top priorities. Amounting to over $280 billion, these three areas account for nearly 60% of our total recurrent expenditure, representing a 50% increase over the past five years.
To provide assistance for sectors, including those affected by the coronavirus outbreak (such as restaurants, hotels, travel agents, retail outlets, cinemas and transport operators), to help them tide over this difficult time, a concessionary low-interest loan with 100% guarantee by the Government will be introduced under the SME Financing Guarantee Scheme. The maximum amount of loan for eligible enterprises is based on their salary and rental expenditures for six months, subject to a ceiling of $2 million. The repayment period is up to three years and, on an opt-in basis, a principal moratorium is available for the first six months during which only interest payments have to be made. The Government will provide guarantee of up to $20 billion under this concessionary loan scheme.
While catering for social development and livelihood needs during economic recession, the Budget also makes forward planning for Hong Kong to tackle challenges in the long run. Relevant measures include devoting resources to enhance healthcare facilities and manpower, strengthening the industries with competitive edges and developing emerging industries to broaden the foundation of our economy.
Since last August, the Government has rolled out four successive rounds of measures totalling over $30 billion to relieve people’s burden, support enterprises and safeguard jobs. In October, the Policy Address further announced over 220 new measures, involving an operating expenditure of $48.7 billion and capital expenditure of $24.8 billion. The host of livelihood initiatives provide various strata of society, especially the disadvantaged, with more comprehensive and targeted support that will better meet their needs. In mid-January this year, the Chief Executive announced another ten livelihood measures, involving an annual recurrent expenditure of over $10 billion and benefitting more than a million grassroots.
To vigorously combat the epidemic, the Government secured approval from the Finance Committee of the Legislative Council on 21 February for the injection of $30 billion into the Anti-epidemic Fund, under which 24 anti-epidemic measures will be implemented to enhance the capability of the Government and other relevant parties to combat the epidemic, and provide assistance or relief to enterprises and members of the public hard hit by the epidemic or affected by anti-epidemic measures.
Last Wednesday (26 February), I chaired the first meeting of the Anti-epidemic Fund Steering Committee to review in detail the progress, implementation approach and timetable of various measures, and to approve the funding commitment required.
Relevant bureaux and departments will implement all measures under the Anti-epidemic Fund as soon as possible, and will report to the Steering Committee on the implementation details, progress and expenditure of measures under their purview to facilitate effective monitoring of the Fund’s operation by the Steering Committee and to ensure optimal use of financial resources.
The Government has introduced waves of measures to benefit members of the public. We will keep a watchful eye on the impacts of various factors on the local economy and people’s livelihood, and assess the actual situation in a timely manner so as to introduce new measures as appropriate. Meanwhile, we will exercise fiscal prudence to ensure effective and sustainable use of public financial resources in support of policy implementation. I look forward to the early passage of the Budget’s Appropriation Bill at the Legislative Council so that relevant measures can be implemented as soon as possible to benefit the community.
