Budget Measures to Spur Recovery and Long-term Economic Growth

The Hong Kong General Chamber of Commerce (HKGCC) welcomes the measures announced by the Financial Secretary Paul MP Chan in his Budget Speech today,

which aim to stimulate economic recovery, support the population and businesses, as well as invest in Hong Kong’s future development.

The Chamber welcomes the emphasis the Financial Secretary has given to short-term relief measures, many of which the Chamber proposed in its Budget submission. His multi-pronged approach to support citizens and SMEs to get through these last few months of recovery, while also keeping an eye on the long-term needs and paths of development, are to be lauded at this difficult time.

The decision to implement another round of consumption vouchers in two tranches totalling $5,000, which the Chamber had recommended to stimulate market demand and fast-track recovery, is also good news. These, together with reductions in salaries tax, rate concessions, electricity subsidies and extending the Public Transport Fare Subsidy, will put more money in people’s pockets to stimulate consumption and the planned “Happy Hong Kong” campaign targeted at the general public.

Reducing profits tax and providing rates concessions for non-domestic properties, together with 50% rental or fee concessions for tenants of government premises will help SMEs. The Chamber also welcomes the extension for applications for the SME Financing Guarantee Scheme.

The wide-reaching proposals to attract tourists and boost Hong Kong’s image globally through attracting mega events to the city will inject some badly needed vitality into the tourism, convention and exhibition, and entertainment sectors, which were very badly hit by the pandemic. The $250 million to be spent on mega events, and an additional HK$300 million reserved for more international meetings, travel incentives, conventions and exhibitions, as well as HK$50 million for promotions, will have the added benefit of showing the world what a vibrant and dynamic city we are, and also promote Hong Kong to international businesses and talent thinking of coming here.

Ensuring Hong Kong has the talent to realize these plans is of course crucial. We are pleased to see the Financial Secretary put a lot of attention into home-grown talent development across a wide range of sectors in the form of a Fintech internship scheme, as well as measures to address talent shortages in the aviation, maritime, I&T and construction sectors. The introduction of a new Capital Investment Entrant Scheme is also a welcome development. The doubling of tax deductions from 100% to 200% for MPF voluntary contributions made by the employers for employees over 65 will help retain experienced workers in the economy.

Looking further ahead, Hong Kong’s economy is undergoing a restructuring and technology, innovation, and digitization is at the forefront of those changes. As Hong Kong will need more support services and expertise to attract higher quality development, we support the emphasis that the Financial Secretary has given to the digital economy, backed by enhancements to intellectual property and dispute resolution regimes. Encouraging service providers to upgrade and invest in the infrastructure and support services, while providing HK$500 million to support SMEs’ digital transformation and HK$400 million to help start-ups are positive steps forward. We look forward to working with the Government and relevant organizations to bring these objectives to fruition.

With decarbonisation and sustainability being crucial areas for the world going forward, we are also pleased to see that further investments in greening our city with green transportation. In particular, we welcome the decision to set up a Green Technology and Finance Development Committee to promote the development of Hong Kong into an international green technology and green finance centre.

We understand that the Financial Secretary had a very challenging time drafting this Budget due to the forecast deficit of HK$54.4 billion for 2023-24, but the Chamber believes this is acceptable as there are no signs of a structural deficit. In addition, given that the Government’s economic forecast of returning to a HK$9.5 billion surplus by 2024-25 seems reasonable, we believe this is a well-rounded budget that should set Hong Kong onto the road to a sustainable recovery.