LegCo Secretariat releases Research Brief on "The 2016-2017 Budget"

The following is issued on behalf of the Legislative Council Secretariat:

     The Legislative Council Secretariat (the Secretariat) today (March 30) released a Research Brief on "The 2016-2017 Budget".

     The Financial Secretary delivered his 2016-17 budget speech on February 24. The Budget continues the trend seen in the previous budgets with the reliance of government revenue on profits and salaries taxes, land premium as well as stamp duties.  Revenue from these sources varies with the state of the economy.

     Over the years, increased economic integration between Hong Kong and the Mainland has rendered the "China factor" as a major determinant of the contributions of various major revenue items to the Government's coffers.  Looking ahead, the deepening economic integration between Hong Kong and the Mainland and the Mainland's Belt and Road Initiative should reinforce the importance of the "China factor" to the Government's coffers.

     Apart from the "China factor", economic development is also another important contributory factor to the Government's coffers.  The 2016-17 Budget focuses on fostering new growth areas and exploring new markets for the pillar industries while setting out targeted relief measures for the tourism industry.  While the weakening tourism industry should benefit from the short-term relief measures, the competitiveness of Hong Kong's tourist attractions remains an area of concern.  Hong Kong has seen very few well-received new tourist spots coming on stream after the opening of the Hong Kong Disneyland in 2005.  On the contrary, there is a recent rush of theme park construction across Asia.  New theme parks are scheduled to open from China, Japan and South Korea to Singapore and Malaysia over the coming years, targeting at Asia's rapidly growing middle class.

     The 2016-17 Budget also features various policy initiatives to diversify the economy and promote new engines of growth.  Among the various spending initiatives announced by the Financial Secretary, the innovation and technology (I&T) industry receives the most financial commitment from the Government which amounts to an estimated HK$18.3 billion.

     However, Hong Kong is a late starter in the I&T industry and has a lot of ground to catch up with other research and development (R&D) intensive economies such as Singapore and South Korea.  These two economies provide specific financial incentive schemes to promote the industry, and set out medium-term strategic plans to support R&D activities over the next five years.  In contrast, Hong Kong offers limited financial incentives and lacks a medium-term plan for the I&T industry.

     The Legislative Council will resume the Second Reading debate on the Appropriation Bill 2016 at its meeting of April 13 and Members will speak on the Bill.

     This is the third issue of the Research Brief for 2015-2016 prepared by the Secretariat's Research Office of the Information Services Division with a view to enhancing information support for Members. It is a concise summary aiming at explaining a subject matter which may be of interest to Members and the general public.

     The Research Brief is now available on the Legislative Council Website at www.legco.gov.hk/research-publications/english/1516rb03-the-2016-2017-budget-20160330-e.pdf .

Ends/Wednesday, March 30, 2016
Issued at HKT 17:13