By The SUN
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| Finance chief Paul Chan delivering his budget speech in Legco |
Permanent residents and new arrivals aged 18 and above should not expect another cash windfall this year, as the government has opted to give them $5,000 worth of electronic spending vouchers instead.
This was among the few sweeteners announced by Financial Secretary Paul Chan, as he unveiled his latest budget blueprint today, Feb 24. The scanty financial aid was expected, given Hong Kong’s record budget deficit of $258 billion.
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Speaking at a press conference after his budget speech, Chan said the vouchers will be given in five installments of $1,000 each throughout the year, and people would be required to spend each installment within a specific period of time.
The vouchers can be used for online shopping, but not for buying goods from abroad.
Chan said that overseas examples have shown that electronic vouchers with an expiry date are most effective in boosting domestic consumption.
The consumption vouchers giveaway is expected to cost about $36 billion and benefit around 7.2 million people.
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Other measures that will be introduced to help residents ride out the continuing economic hardship wrought by the pandemic include:
- Salaries tax will be
waived for the coming year, capped at $10,000, down from $20,000 the
previous year. This will benefit 1.87 million taxpayers;
- $1,000 subsidy for residential
electric bills, to benefit over 2.7 million households;
- For property owners, rates
concessions worth up to $5,000 for the year
- An extra half a month’s worth of welfare, old-age and disability allowances, instead of just a full month’s benefit as before. This involves an additional expenditure of $2.382 million.
To support enterprises, measures involving a total of about $9.5 billion will be given out, broken down as follows:
- Profits tax will be
waived, capped at $10,000. This is expected to benefit 128,000 businesses;
- Rates concession for
non-domestic properties, with a ceiling of $5,000 in the first two
quarters and $2,000 in each of the remaining two.
- Waiver of business
registration fees, to benefit 1.5 million enterprises, and reduce
government revenue by $3 billion;
- Waiver of 75% of water and
sewage charges for non-domestic households for eight months, starting in
April, with a monthly ceiling of $20,000 and $12,500 respectively per business.
This will benefit 250,000 businesses.
- A grant of 75% rental or fee concession to tenants of government properties for six months starting from April 2021.
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| The elderly are among a few who will get more cash aid this year |
Last year, Hong Kong’s economy fell by 6.1%, with the latest jobless rate rising to 7%. The government spent nearly $300 billion on measures to stabilize the economy and ease people’s burden, lifting the fiscal deficit to a record high.
He said his spending plan this year and the sharp drop in revenue from exports, services and tax collections would lead to a deficit of $257.6 billion for the current fiscal year.
To revive the economy and create jobs for Hong Kong people, Chan said the government will boost tourism, which had been frozen by the pandemic.
“Apart from the financial support of nearly $2.6 billion that has already been provided for the tourism industry, I will further earmark a total of $934 million to enhance tourism resources, of which $169 million will be used to continue to take forward local cultural, heritage and creative tourism projects,” he said.
A tourism rebound could help lift workers in the entertainment and hospitality sectors, including thousands of musicians who had been left jobless for the most part of last year because of the pandemic.
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