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Budget supports businesses, preserves jobs says FS

     The Financial Secretary, Mr John C Tsang, has today (February 1) rolled out a series of initiatives to support small and medium sized enterprises (SMEs) and preserve jobs in the face of an impending global economic slowdown.

     "Whether as individuals, as enterprises or as the community as a whole, we must strengthen our resilience to adversity and prepare ourselves for the challenges ahead," he said.

     Mr Tsang proposed to substantially enhance the existing SME Financing Guarantee Scheme by introducing a number of concessionary measures.

     These include increasing the maximum loan guarantee ratio to 80 per cent, for which the Government will provide a guarantee commitment of $100 billion.

     Accounting for the anticipated default rate, the estimated government expenditure for this initiative will be about $11 billion.

     "The increase in loan guarantee ratio under the SME Financing Guarantee Scheme will enhance lending institutions' confidence in offering loans to SMEs to meet their financing needs," Mr Tsang said.

     To further assist SMEs, the Hong Kong Export Credit Insurance Corporation (ECIC) will offer new policy terms, which will include special concessions:

* SME policyholders will be allowed to insure their exports only for places and buyers of their choice under specific circumstances;

* SME policyholders will be entitled to various premium discounts;

* ECIC will further extend the sales-by policy to contracts between Hong Kong exporters' overseas or Mainland subsidiaries, of which the Hong Kong policyholders have control, and their buyers.

     "I believe that these new initiatives will further help SMEs maintain their competitiveness, tap into emerging markets and ease their financial pressure," said Mr Tsang.

     To help reduce operating costs, enhance competitiveness and preserve jobs, the Financial Secretary proposed:

* Waiving the business registration fees for 2012-13 to benefit all business operators. This proposal will cost the Government $1.9 billion;

* Reducing profits tax for 2011-12 by 75 per cent, subject to a ceiling of $12,000.  This will benefit some 120 000 profits taxpayers and cost the Government $1.12 billion;

* Halving the charges for import and export declarations at an annual cost to the Government of $750 million;

* Abolishing capital duty levied on local companies to encourage investors to set up companies in Hong Kong to raise capital and expand their business. This proposal will cost the Government $90 million a year.

     Mr Tsang set aside $220 million to support the Construction Industry Council in enhancing manpower training. This will help to meet demand for the industry, with capital expenditure forecast to reach an all-time high of $62.3 billion in 2012-13.

     "The aim is to bring fresh blood into the industry to meet the demand of future infrastructure developments," Mr Tsang said.

     To encourage the use of more buildings and industrial lots for data centres, the Financial Secretary proposed to exempt waiver fees for using certain floors of eligible buildings, and to assess the premium for a high-tier data centre.

     The Financial Secretary said the Government will soon inject $100 million into the Enhancing Employment of People with Disabilities through Small Enterprises Project. This funding is granted to non-government organisations to set up small enterprises employing people with disabilities.

     To provide more job opportunities through skills upgrading, Mr Tsang said the Employees Retraining Board will offer 130 000 training places in 2012-13 and allocate additional resources for people seeking work.

     He added that the International Cuisine College to be set up by the Vocational Training Council is expected to admit its first cohort in the 2014-15 academic year.

     "Underpinned by the strategy of 'supporting enterprises to preserve employment and promoting economic development to protect people's livelihood', these measures will tide enterprises over difficult times, preserve employment and increase people's disposable cash at hand," Mr Tsang said.

     Full details of the 2012-13 Budget are available at:

Ends/Wednesday, February 1, 2012
Issued at HKT 13:45


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