Following is the full text of the Speech on the 2016-17 Budget delivered by the Financial Secretary, Mr John C Tsang, in the Legislative Council today (February 24):
I move that the Appropriation Bill 2016 be read a second time.
2. This is my ninth year as Financial Secretary. Over the past years, the people of Hong Kong and I together have witnessed the incessant ups and downs in the global economy. I feel blessed that Hong Kong has managed to ride out the storms. We have secured decent economic growth. We have maintained low unemployment and we have managed healthy public finances. I am deeply indebted to the previous generations for the solid foundations that they have built. I am profoundly impressed too by the tenacity of the Hong Kong people.
3. Openness, diversity, freedom and the rule of law, which have all along been the core values of the people of Hong Kong, have guided our way. Even though the development path of Hong Kong has not been an easy one, our direction is clear and, step by step, we have been charting our course, a course that we call our own. I think we, the Hong Kong people, are proud of our ability to persevere through these turbulent years.
4. It is only two months since the start of 2016, but the occurrence of incidents in Hong Kong has given rise to grave concerns.
5. Two weeks ago, in the early hours of the second day of the Lunar New Year, a serious unlawful incident broke out in Mong Kok. A handful of people lost their rationality and attacked the police officers and reporters that were present, provoking a large-scale riot and causing dozens of injuries.
6. I believe many people share my feelings towards the incident. Distressed and angry, I was perplexed as to why violence had flared in Hong Kong. I was shocked that our city could have turned overnight into such a strange and alien place that I hardly recognised. I was troubled why the core values that we long cherished had been devoured by violence and hatred.
7. Acute social conflicts will add uncertainties to the already adverse economic environment. 2016 is an election year. Apart from the Legislative Council (LegCo) By-election to be held four days from today, a LegCo General Election is scheduled to be held in six months' time. We anticipate that political disputes will only intensify over the coming months.
8. Politics and economics are closely intertwined. Political volatility will unavoidably impact on our economy.
9. It is the duty of Government to take on challenges in our society. As Financial Secretary, it is my duty to mobilise resources effectively to maintain Hong Kong's economic development and fiscal health; to support local enterprises, in particular the small and medium enterprises (SMEs), to cope with economic volatilities; and to safeguard the jobs of workers.
10. Government should also continue to fortify the economic foundation of Hong Kong, promote diversity, and channel public resources towards improving people's livelihood and supporting the disadvantaged. All sectors should have a fair chance in sharing the fruits of our economic success, and everyone in Hong Kong, regardless of age, gender and race, should be able to unleash their potential and lead a better life through hard work.
Economic Performance in 2015
11. Export performance of the Asian region was hit by the global economic setback and highly volatile financial markets in 2015. Our exports of goods recorded the first annual decline since 2009, down by 1.7 per cent in real terms. Exports of services dropped by 0.6 per cent, the first annual decrease since 1998. Inbound tourism was weak and visitor arrivals dropped by eight per cent in the fourth quarter, down by 2.5 per cent for the whole year. Retail sales slackened, recording the first annual decrease since 2009.
12. Domestic demand was the key driving force of economic growth last year. Although the investment atmosphere turned more cautious, local consumption as well as expenditures on infrastructure and private construction projects remained resilient. These, together with the stimulus effect of the relief measures introduced in last year's Budget, led to an overall economic growth of 2.4 per cent. This is the fourth consecutive year that our economic growth was lower than the annual average of 3.4 per cent over the past ten years. The economy saw significant downward pressure in the latter half of the year, further slowing down to a 1.9 per cent growth in the fourth quarter.
13. The unemployment rate averaged at a low level of 3.3 per cent for the year as a whole. Wages and income improved generally. Employment earnings for the lowest three income decile groups of full-time employees rose by five to six per cent as compared with the year before. But the recent decline in labour demand in the sectors related to inbound tourism is giving us cause for concern.
14. Given the slowdown of the local economy and the mild imported inflation, inflation has dropped for four consecutive years. The headline inflation rate in 2015 was three per cent. Netting out the effects of Government's one-off measures, the underlying inflation rate, at 2.5 per cent, was down by one percentage point from 2014.
(To be continued.)
Ends/Wednesday, February 24, 2016
Issued at HKT 11:10