Budget reinforces Hong Kong's long-term economic development

     In his 2015-16 Budget today (February 25), the Financial Secretary, Mr John C Tsang, has pledged to explore new ideas and strive for diversity to help Hong Kong people realise their aspirations.

     "In particular, I shall make the best use of resources generated by the community's efforts, and continue to care for the disadvantaged and promote sustainable development, so that people from different sectors, as well as our next generations, can share the benefits of economic growth," the Financial Secretary said.

     Mr Tsang promised targeted support for the cultural and creative sector, with a view to inspiring creativity in the community, diversifying the economy and expanding market opportunities.

     Cultural and creative measures include:

* Injecting an additional $400 million into the CreateSmart Initiative to support different sectors and provide talented people with training programmes, as well as overseas exchanges and internships;

* Launching a $500 million, three-year pilot programme for Hong Kong's fashion industry. Making use of existing and new resources, the programme will promote fashion designers and brands, create an incubation programme for design start-ups and provide fashion design graduates with overseas internships and study opportunities;

* Initiating a $300 million Art Development Matching Grants Pilot Scheme, under which private donations and sponsorship secured by eligible local arts groups will be matched by government grants; and

* Adding $200 million to the Film Development Fund and introducing a subsidy scheme for film productions with a budget not exceeding $10 million, to boost the volume of local film production and nurture film talent. The production budget ceiling of the Scheme for Financing Film Production will be raised as well, from $15 million to $25 million. The Government will also relaunch the First Feature Film Initiative, with increased subsidies for production costs.

     Mr Tsang said he was encouraged by the number of start-ups in Hong Kong. He said that start-ups developed by the Hong Kong Science and Technology Parks Corporation (HKSTPC) and Cyberport had attracted hundreds of millions of dollars in investment.

     To further promote the financing of new enterprises, Mr Tsang said that the HKSTPC would earmark $50 million to set up a corporate venture fund on a matching basis with private funds. The money would be invested in start-ups that were either located in the Science Park or had participated in one of its incubation programmes.

     Mr Tsang also earmarked $150 million for a new phase of the Enhancing Self-Reliance Through District Partnership Programme, covering 2016-17 to 2019-20.

     He said the money would be used to encourage commercial sector participation in social enterprises and promote a greater variety of social enterprises.

     Human resources development was a central aspect of the Budget.

     "The Government has devoted substantial resources to improving the quality of manpower to further diversify the economy and steer our development towards high value-added activities," Mr Tsang said.  

      Mr Tsang unveiled a number of human resources' initiatives in his Budget. They include:

* $100 million for a three-year pilot scheme focused on insurance and asset and wealth-management services. In collaboration with industry, the programme will offer internships, particularly for students, to get a better understanding of career prospects in the two sectors;

* $960 million for a pilot programme allowing 1 000 students per cohort to pursue designated self-financing undergraduate programmes that reflect Hong Kong's manpower needs. In the 2015/16 academic year, the initiative will cover 13 programmes, ranging from health care to architecture and engineering, testing and certification, the creative industries, logistics, and tourism and hospitality;

* To expand, to 3 000, the short-term internship places provided by government departments for 2015-16. This is an increase of 30 per cent over the last financial year. The measure will cost $21 million;

* An additional $205 million over the next three years to allow more Hong Kong young people to take part in Mainland exchange and internship programmes;

* 250 internships for university students wishing to broaden their understanding of Association of Southeast Asian Nations countries, up from 90 internships in last year's inaugural round;

* $23 million over the next three years to promote Hong Kong as an intellectual property (IP) trading hub in the region. The money will be used for manpower training, IP consultation and other services to small and medium enterprises;  

* $130 million to strengthen child-care services. The funds will help more women join the workforce;

* $220 million to extend, for two years, the Integrated Employment Assistance Programme for Self-reliance. The programme encourages employable, able-bodied recipients of the Comprehensive Social Security Assistance Scheme to gain employment; and

* In addition, the Government will extend the coverage of the on-the-job training allowance under the Employment Programme for the Middle-aged to encourage the employment of older persons to take up part-time jobs, and the Employees Retraining Board will focus on providing training for older persons, among other target groups.

     Beyond creating employment opportunities for women and older people, Mr Tsang's Budget targeted health-care and retirement protection.

     He reiterated the Chief Executive's January Policy Address announcement that $50 billion would be set aside to provide better retirement protection for the elderly in need.

     Improving the environment was also high on the agenda. Environmental measures include:

* Phasing out 82 000 Euro III, or earlier, diesel commercial vehicles by the end of 2019, involving an ex-gratia payment of $11.4 billion. To date, 22 000 of the vehicles have been phased out;

* Extending, to the end of March 2018, the incentive scheme that halves the port facilities and light dues charged on ocean-going vessels using low-sulphur fuel while at berth in Hong Kong;

* An additional $150 million to extend the Cleaner Production Partnership Programme by five years. The programme helps Hong Kong-owned factories in both Hong Kong and Guangdong reduce emissions and conserve energy; and

* Starting work on the design of a desalination plant at Tseung Kwan O and the associated infrastructure. The plant is expected to begin operation in 2020, with its annual output accounting for between 5 per cent and 10 per cent of Hong Kong's fresh-water consumption.

     Mr Tsang offered a range of initiatives to develop Hong Kong's pillar industries: trading and logistics, tourism, business and professional services, and financial services.

     For the financial sector, Mr Tsang announced that he would launch an inflation-linked retail bond, or iBond, issue of up to $10 billion, with a maturity of three years. The issuance would target Hong Kong residents.

     The Financial Secretary said that Hong Kong was also exploring a closer economic partnership arrangement with Macau.

Ends/Wednesday, February 25, 2015
Issued at HKT 12:33