Budget Speech by the Financial Secretary (5)

Relief Measures

48. Fully aware of the impact of inflation and rising prices on people's livelihood, I propose a series of measures to help ease pressure on them.  For one-off measures, I propose:

(1) Granting each residential electricity account a subsidy of $1,800.  This will cost the Government about $4.7 billion;

(2) Waiving rates for 2011-12, subject to a ceiling of $1,500 per quarter for each rateable property.  It is estimated that about 82 per cent of properties will be subject to no rates in the year.  This proposal will cost the Government approximately $9.9 billion;

(3) Paying two months' rent for public housing tenants.  The Government will pay two months' base rent for tenants who are required to pay extra rent to the Hong Kong Housing Authority.  For non-elderly tenants of the HKHS's Group B estates, the Government will pay two-thirds of their rent for two months.  This measure will involve expenditure of approximately $1.9 billion; and

(4) Providing an extra allowance to Comprehensive Social Security Assistance (CSSA) recipients, equal to one month of the standard rate CSSA payments; and an extra allowance to Old Age Allowance and Disability Allowance recipients, equal to one month of the allowances.  This proposal will involve an additional expenditure of about $1.9 billion.

49. The above measures aim to alleviate the burden of electricity charges, rates and public housing rents on the public.  As in the past, CSSA recipients who do not have to bear rates or public housing rents will not obtain any pecuniary advantage from the rates waiver and the government payment of public housing rents.  They will, however, receive an extra allowance, along with other CSSA recipients, to ease the pressure of inflation.

50. In addition, the short-term food assistance services funded by the Government, which have achieved satisfactory results since implementation, provide immediate support to people in need.  The operating organisations have the discretion to provide assistance beyond the specified period in exceptional circumstances.  Given the stable utilisation of the services, the funding already allocated should be sufficient for financing the operation of the services until 2013.  The Social Welfare Department (SWD) will closely monitor the demand for the services and the related arrangements.  I have also reserved an additional $100 million for the continuation of the services as and when needed.

51. In addition to the above one-off measures, to alleviate the burdens of people in supporting their parents and raising their children, I also propose:

(1) Increasing the allowance for maintaining dependent parents/grandparents by 20 per cent.  The allowance for maintaining a dependent parent/grandparent aged 60 or above will increase from the present $30,000 to $36,000.  At the same time, the additional allowance for a taxpayer residing with his/her parent/grandparent will increase from $30,000 to $36,000.  The allowance for maintaining a dependent parent/grandparent aged between 55 and 59 will increase from the current $15,000 to $18,000.  The same increase applies to the additional allowance for taxpayers residing with these parents/grandparents.  For taxpayers whose parents/grandparents are admitted to a residential care home, the deduction ceiling for elderly residential care expenses will be raised from the current $60,000 to $72,000.  This measure will benefit about 510 000 taxpayers and cost the Government $570 million a year; and

(2) Raising both the child allowance and the additional
one-off child allowance in the year of birth by 20 per cent from $50,000 to $60,000 for each child.  I estimate that this measure will benefit about 300 000 taxpayers, costing the Government $650 million a year.

52. The relief proposals include one-off measures as well as recurrent measures such as raising the tax allowances.  I have placed much emphasis on helping our citizens in need to cope with inflationary pressure while avoiding any excessive stimulating effect on overall consumption.  I understand that not all the measures will be of benefit to every member of the public as needs vary depending on individual circumstances.  But I would like to point out that the government expenditure for 2011-12 is estimated at $371.1 billion, an increase of 22 per cent over this year.  Recurrent expenditure will reach $242 billion, registering a year-on-year growth of about 8 per cent.  Such allocations will be used to improve services and facilities of all kinds, benefiting a wide spectrum of the community.

(To be continued)

Ends/Wednesday, February 23, 2011
Issued at HKT 11:38