The Hong Kong General Chamber of Commerce (HKGCC) urges the Financial Secretary to roll out initiatives to avoid company closures while at the same time investing to increase Hong Kong’s future competitiveness in his upcoming Budget.
In its Budget Submission to the Government, HKGCC said funding support for companies to implement digital technologies should be extended. The Government should also continue to help companies automate their operations where possible. HKGCC believes that it should also make it easier to recruit overseas (including Mainland) workers, especially for sectors suffering from acute manpower shortages.
The outlook for Hong Kong’s economy has taken a turn for the worse with the fifth wave of the pandemic. In its policy recommendations to the Financial Secretary’s 2022-23 Budget, HKGCC called for a number of immediate relief measures, including:
(1) enhancing government financial support programmes to adversely affected sectors and their employees;
(2) fresh rounds of consumption vouchers of at least HK$4,000 in total;
(3) a one-time 100% tax reduction for profits tax, salaries tax and tax under personal assessment for the year of assessment 2021/22, subject to a ceiling of HK$20,000; as well as
(4) an introduction of loss carry-back to help businesses, especially SMEs, to regain a solid footing after the losses incurred due to Covid.
The submission also lays out proposals over the medium- and long-term to sustain Hong Kong’s competitiveness.
“The international landscape is evolving rapidly with a number of unprecedented factors at play. As an international financial and business centre, it is critical that Hong Kong continues to hone its comparative advantages while acquiring new capabilities. These measures will go a long way in persuading international investors and the local population that Hong Kong remains a dynamic and open city,” said HKGCC Chairman Peter Wong.
In light of the worsening pandemic, HKGCC revised its 2022 economic forecast, which predicts real GDP will grow by 1.2%, down from its December forecast of 2.8%.
|HKGCC 2022 Economic Forecasts||Latest Forecast||December Forecast|
|Real GDP Growth||1.2%||2.8%|
|Unemployment Rate (year-end)||4.8%||3.7%|
|Retail Sales Growth||-2%||5%|
|Merchandise Exports Growth||6%||7%|
“Omicron will inevitably delay the reopening of the border and further postpone businesses’ hopes of a return to normality. Although some companies are managing to survive with remote working, not all businesses lend themselves to working from home. This is the case with contact-intensive sectors, which will be especially affected if there are prolonged stringent social-distancing rules. We hope the Government can urgently look into how these can be addressed,” concluded Wong.
Full details of HKGCC’s Budget Proposals for 2022-2023 can be found here.