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The Financial Secretary, Mr John C Tsang, in his Budget today (February 26) proposed a series of initiatives to strengthen Hong Kong's competitiveness as an international hub and premier gateway to markets in Mainland China.
"Competitiveness is the theme of this Budget," Mr Tsang said.
"I believe that the proposed measures will enhance our competitiveness, help keep Hong Kong's economy growing, improve our business environment, increase employment opportunities and maintain the health of public finances."
Mr Tsang proposed several initiatives to develop the financial services industry. He said Hong Kong had become one of the largest markets in the Asia Pacific region for exchange traded funds (ETFs) since 2010, when the Government extended the stamp duty concession to cover ETFs that track indices comprising not more than 40 per cent of Hong Kong stocks.
"I propose to waive the stamp duty for the trading of all ETFs, so that the trading cost of ETFs with a higher percentage of Hong Kong stocks in their portfolios can be reduced as well," the Financial Secretary said.
"This will help promote the development, management and trading of ETFs in Hong Kong."
He also proposed launching a new issue of inflation-linked retail bonds (iBond) of up to $10 billion with a maturity of three years.
Mr Tsang announced seven measures to strengthen support for small and medium-sized enterprises (SMEs) in terms of financing, market expansion, brand building and productivity enhancement. The measures include:
* extending the application period for the special concessionary measures under the SME Financing Guarantee Scheme for one year to the end of February 2015;
* continuing the implementation of the Small Business Policy scheme by the Hong Kong Export Credit Insurance Corporation to allow SMEs engaging in export trade more flexibility in taking out insurance cover;
* earmarking $50 million to support retailers on a matching fund basis for the use of IT and other technology solutions to increase productivity;
* promoting cloud computing applications among SMEs and providing training to help them adopt appropriate and affordable IT solutions;
* continuing with the Hong Kong Mortgage Corporation Limited's Microfinance Scheme, which has so far approved 106 applications with a total loan amount of over $28 million;
* continuing to make use of the dedicated fund and extend the network of the Hong Kong Trade Development Council Design Gallery to assist Hong Kong enterprises in developing brands, in upgrading and restructuring, as well as in exploring market opportunities in the Mainland; and
* continuing to identify suitable workspace for individuals and enterprises engaging in creative industries and help promote their work.
To enhance Hong Kong's capacity and appeal as a tourist destination, Mr Tsang said the Government planned to develop the Kai Tak Fantasy area of the Kai Tak Development into a spectacular world-class tourism, entertainment and leisure hub.
"We are identifying feasible ways for the gradual release of six sites facing Victoria Harbour within the 'hotel belt' adjacent to the Kai Tak Cruise Terminal to the market starting from the end of next year," he said.
In addition, new hotel projects at the Murray Building site in Admiralty, Ocean Park and Hong Kong Disneyland would provide over 1,500 rooms, the Financial Secretary said.
Mr Tsang earmarked a total of $95 million for the Hong Kong Tourism Board, including $45 million to promote conventions and exhibitions and $50 million to inject new elements into popular established events.
"One way to do so is to introduce 3D projection mapping technology to help showcase the magnificent night view of Victoria Harbour during mega events," Mr Tsang said.
To promote innovation and technology, Mr Tsang said the Government will introduce two new measures to enhance the application and commercialisation of research and development (R&D) results, including:
* setting up an Enterprise Support Programme to replace the Small Entrepreneur Research Assistance Programme and raise the funding support ceiling for R&D activities of private sector companies from $6 million to $10 million for each project. While the recipient company must bear at least half of the cost, it may retain all the intellectual property rights of the project; and
* extending the scope of funding to development work and system integration, industrial design, compliance testing and clinical trials.
"The ITF (Innovation and Technology Fund) will provide an annual funding of up to $24 million to the six designated universities to provide seed money for R&D projects that they recommend, encouraging their students and teachers to start downstream R&D businesses and commercialise their R&D results," Mr Tsang said.
The Financial Secretary proposed extending the exemption of electric vehicles from First Registration Tax by three years up to March 31, 2017, to encourage greater use of electric vehicles in Hong Kong as part of efforts to improve the environment.
"Our competitive edge cannot be taken for granted, nor is it self-sustaining," Mr Tsang said.
"It is essential that we seize every opportunity to improve, and aptly respond to possible crises along the way."
Ends/Wednesday, February 26, 2014
Issued at HKT 12:56
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