The Hong Kong General Chamber of Commerce (HKGCC) welcomes the measures unveiled today by the Financial Secretary Paul MP Chan in his Budget Speech, which present a balance between the need to support the economy and citizens, while addressing Hong Kong’s record budget deficit.
“This budget addresses our three most pressing needs: supporting the people and businesses who have been worst affected by Covid; safeguarding our standing as a premier financial, business and tourism centre; and laying the foundations for new innovation-led growth,” said HKGCC Chairman Peter Wong. “The benefits of deploying the government’s resources to aid the recovery justify the increase in spending.”
As companies are facing severe liquidity constraints, the Chamber is pleased that the Financial Secretary has announced further financial relief measures for businesses. Reducing profits tax, together with waiving business registration fees, rates and utilities charges will bring some relief for businesses. We also welcome the extension for applications for the SME Financing Guarantee Scheme and raising the loan ceiling to help small businesses. Similarly, the Financial Secretary’s decision to raise the ceiling to HK$6 million per enterprise applying for the BUD Fund will help companies develop new markets.
The pandemic has necessitated a temporary increase in government spending. However, the Chamber firmly believes that issuing government debt is a practical way to indirectly help preserve our fiscal strength. We are pleased that the Government has accepted a number of proposals in our submission regarding debt issuance, such as issuing more green bonds, Silver Bonds and iBonds, etc. The issuance of government bonds and expansion of Bond Connect, together with increasing retail bonds, would have the added benefit of strengthening Hong Kong’s capital markets and standing as an international financial centre.
Moreover, the long-term benefits of developing new financial products, such as the Insurance-linked Securities Grant Scheme, tax concessions for some insurance business and private equity funds, providing subsidies for open-ended fund companies to set up in or re-domicile in Hong Kong, as well as other timely initiatives, will go a long way towards laying the path for future growth.
As the tourism industry, which is one of Hong Kong’s pillar industries, has been frozen for the past year, we are glad to see the Government will inject significant support to promote the city’s attractions and revive the sector. This should align with the opening up of the border and also the relaxation of quarantine requirements when safe to do so, which we believe should be the key focus of the Government. The move to issue consumption vouchers to stimulate local spending will also help support the struggling tourism and retail sectors.
We support the Financial Secretary’s decision to continue and enhance the Distance Business Programme to offer funding support for enterprises to adopt information technology solutions and cover the expenses for providing relevant training to their employees. The extension of the STEM education subsidy to primary schools should also help nurture our future talent pool for Hong Kong to become the innovation and technology hub for the GBA.
To meet Hong Kong’s carbon reduction commitments and improve the overall air quality, we welcome the Government’s plan to introduce Hong Kong’s first roadmap on the popularisation of electric vehicles, and updating our Clean Air Plan by mid-2021. Other green initiatives, including installing renewable energy systems, concessions for energy audits and injecting $1 billion into the Recycling Fund will all contribute to making Hong Kong a greener and more liveable city.
“Despite a very challenging year for Hong Kong, we are pleased to see that the Financial Secretary has responded to the immediate needs of businesses and citizens, while also keeping an eye on longer-term planning for Hong Kong,” said Wong. “We hope these Budget measures, combined with the gradual roll-out of the vaccination programme, will help position the territory for accelerated growth as the global recovery gains momentum.”