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FS targets competitiveness, livelihood issues in Budget

     The Financial Secretary, Mr John C Tsang, today (February 26) unveiled his Budget with wide-ranging measures to boost Hong Kong's economy and sharpen the city's competitive edge.

     Mr Tsang also unveiled a $20 billion package of relief measures for various sectors of the community and outlined the Government's financial planning strategy amid an ageing population and shrinking workforce.

     "We must work together to prepare ourselves for the future, to strengthen further our solid foundation for the well-being of this generation and the next," the Financial Secretary said.

     Mr Tsang forecast economic growth for Hong Kong of between 3 and 4 per cent in 2014, compared to 2.9 per cent GDP growth in 2013.

     "The initiatives introduced in last year's Budget, including a $33 billion package of one-off counter-cyclical measures, had a stimulus effect of boosting the GDP by 1.3 percentage points, thereby helping to stabilise the economy and preserve employment," Mr Tsang said.

     The Financial Secretary forecast a consolidated surplus of $12 billion for the current fiscal year, with the city's fiscal reserves expected to reach $745.9 billion by March 31.

     The Financial Secretary said that analysis by the Working Group on Long-Term Fiscal Planning set up last year found that the Government's fiscal position remains healthy in the short to medium term.

     "In the longer term, however, Government must seek to foster economic growth, and align the growth rates of government revenue and government expenditure," Mr Tsang said.

     To strengthen Hong Kong's competitiveness and efficiency, Mr Tsang said the city needed a comprehensive strategy, not only to improve flows of people, goods, capital and information, but also for enhancing Hong Kong's quality of life and position as an international hub.

     Capital expenditure for 2014-15 is forecast to be $86.2 billion, including $70.8 billion on capital works. Infrastructure projects under construction include new roads and railways, airport development, tourism facilities, hospitals, land development and environmental facilities.

     On land supply, Mr Tsang said 36 residential sites capable of providing about 14,000 private residential units were put up for sale in the current financial year, the highest number since 2000-01.

     Revenue from government land sales for the year is estimated at $84.1 billion, about $15.1 billion or 21.9 per cent higher than the original estimate.

     Mr Tsang proposed a range of measures to further develop Hong Kong's pillar industries of financial services, tourism, professional services and trade and logistics. Existing initiatives to support small and medium-sized enterprises will either be extended or enhanced.

     The Financial Secretary also unveiled a package of five relief measures to ease the financial burden on residents. They are:

* reducing salaries tax and tax under personal assessment for 2013-14 by 75 per cent, subject to a ceiling of $10,000. This proposal will benefit 1.74 million taxpayers and cost the Government about $9.2 billion;

* reducing profits tax for 2013-14 by 75 per cent, subject to a ceiling of $10,000 at a cost of about $1 billion;

* waiving rates for the first two quarters of 2014-15, subject to a ceiling of $1,500 per quarter for each rateable property at a cost of about $6.1 billion;

* paying one month's rent for public housing tenants, involving about $1 billion; and

* providing an extra one month's allowance to recipients of Comprehensive Social Security Assistance, Old Age Allowance, Old Age Living Allowance and Disability Allowance, involving additional expenditure of $2.7 billion.

     "Together with other measures in this Budget, the fiscal stimulus effect on GDP will be 0.7 percentage point," Mr Tsang said.

     He set aside $25 billion of additional expenditure to support measures announced by the Chief Executive in his Policy Address last month.

     "I shall ensure that financial resources are adequate to fully support the early launch of the relevant initiatives to meet the aspirations of the public," Mr Tsang said.

     Education continues to receive the single largest share of total government expenditure, with recurrent expenditure on education of $67.1 billion in 2014-15 - an increase of nearly 80 per cent over 1997-98.

     Mr Tsang said the Government would increase annual expenditure on elderly services with additional funding of more than $660 million starting from the next financial year. This covers:

* some $170 million for 1,500 additional places for the Enhanced Home and Community Care Services, and to strengthen support for frail elderly persons living at home;

* some $160 million to upgrade 51 social centres for the elderly to neighbourhood elderly centres, and increase manpower support;

* some $200 million to raise subsidies for places under the Enhanced Bought Place Scheme and the Nursing Home Place Purchase Scheme and to enhance continuum of care services; and

* $120 million for 950 more subsidised residential care places for the elderly.

Ends/Wednesday, February 26, 2014
Issued at HKT 12:50


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