Budget Speech by the Financial Secretary (2)

Gearing Up for Speedy Recovery on the Path to Normalcy

25. I believe that Hong Kong's economy will visibly recover this year, and I remain positive. However, economic recovery is still in its initial stage, and there is a need for our people and businesses to regain vigour for being hit by the epidemic over the past three years. Having regard to the financial affordability of the Government, I will introduce the following targeted measures to support people and enterprises and boost the momentum of our economic revival.

Post-epidemic Recovery

Strive to Attract Tourists and Enliven Hong Kong's Image

26. Hong Kong has long been a world-renowned events capital. Organisation of mega events, international conferences and exhibitions is especially crucial to drawing high value-added visitors. It is also a segment of the tourism industry in which countries around the world are striving to establish a foothold. We must spare no effort in staging and supporting more international mega events and activities to further augment our image and enhance our competitiveness as an events capital.

International Events

27. To enhance Hong Kong's international image, the Government will earmark $100 million for attracting more mega events with significant visitor appeal and tourism promotional effect to be staged in Hong Kong. Besides, the Hong Kong Tourism Board (HKTB) will spend over $250 million to sustain its efforts in organising or helping promote major tourism events , including the Hong Kong Pop Culture Festival to be held for the first time, the Hong Kong Wine and Dine Festival to be held in physical mode again for the first time since the epidemic, the Hong Kong International Dragon Boat Races, Hong Kong Cyclothon, Hong Kong Sevens and Arts Basel in Hong Kong, etc.

Major Conventions and Exhibitions

28. The Hong Kong Trade Development Council (HKTDC) will hold more than 10 major conferences and exhibitions in the coming months. It is anticipated that these events will attract over 500 000 participants. Moreover, as this year marks the 10th anniversary of the Belt and Road (B&R) Initiative, the Government will continue to co-organise the annual B&R Summit with the HKTDC to actively promote Hong Kong as a functional platform and a key link for the B&R Initiative.

29. The Government will allocate additional funding of about $200 million to the HKTB for stepping up its efforts in securing the staging of more international meetings, incentive travels, conventions and exhibitions (MICE) of various scales and types in respect of finance, innovation and technology (I&T), medicine, etc. in Hong Kong, to attract high value-added visitors and consolidate Hong Kong's position as the premier MICE destination in the region.

30. The Hong Kong Monetary Authority (HKMA) plans to jointly organise international conference on banking supervision in Hong Kong with the Basel Committee on Banking Supervision next month, and is discussing with the Bank for International Settlements the holding of the Central Bank Governors Meeting in Hong Kong in the latter half of the year. As regards the Global Financial Leaders' Investment Summit organised for the first time in November last year, it will be held again this year to showcase Hong Kong's unique edges and investment environment.

Promote Hong Kong

31. On promoting Hong Kong, we should invite visitors to come here, and, at the same time, raise our city's profile around the world. The Task Force on Promoting and Branding Hong Kong, led by myself, comprises distinguished personalities from various sectors of society, with the aim of exploring novel ways to promote Hong Kong to the world. Government departments and related units will make concerted efforts to promote Hong Kong's new advantages under the direction of the task force. I will provide a grant of $50 million for supporting the relevant work.

"Hello Hong Kong"

32. To bolster Hong Kong's economic and business advantages, the Government launched a large-scale global promotional campaign themed "Hello Hong Kong" in early February. The campaign aims to showcase and promote the city's new bright economic prospects, new cultural vision and new travel experience in a holistic manner, with a view to attracting as early as possible more business travellers and tourists from the Mainland and all over the world to visit Hong Kong.

33. The Airport Authority Hong Kong (AA) has announced that it would give away free air tickets while the HKTB is handing out gift packs to inbound visitors. Notwithstanding our status as a culinary capital and a shopping paradise, we also need to enhance promotion efforts while tourism is on the road to recovery. In this connection, the HKTB will distribute "Hong Kong Goodies" to one million inbound visitors, offering them shopping and dining privileges. In addition, the HKTB will provide greater incentive to attract visits of international cruises, with a view to facilitating the revival of the cruise industry and consolidating Hong Kong's position as a major cruise port in the region.

"Happy Hong Kong"

34. We will soon launch the "Happy Hong Kong" Campaign for the general public, providing them opportunities to share happy and enjoyable moments together, thereby bringing more joy to the community. The campaign will focus on activities related to gourmet experiences, fun amusements and exciting ambience. Apart from providing members of the public with more diverse choices of fun and interesting activities in Hong Kong, it will also help stimulate local consumption and boost our economy.

35. One of the major themes for this series of events is the launch of a "Gourmet Marketplace", under which large-scale food fairs will be organised in various locations across the territory in the coming months, bringing together Mainland, Hong Kong and overseas gourmet food, with a view to enabling the public and visitors enjoy the good food in the city. The Home and Youth Affairs Bureau will assist in co-ordinating the relevant events, details of which will be announced later. Another highlight is the organisation of a large-scale sea-land carnival by the HKTB in summer, with Victoria Harbour as the stage. Apart from a wide range of dancing, music and street performances presented by performing groups from around the world, a brand new lighting show will also be staged to offer a new experience to the public and visitors while they are enjoying the spectacular view of the harbour.

36. Additionally, in support of the Happy Hong Kong Campaign, organisations like the West Kowloon Cultural District Authority, Hong  Kong Disneyland, Ocean Park Hong Kong, Hong Kong Cyberport Management Company Limited (Cyberport) and Hong Kong Science and Technology Parks Corporation (HKSTPC) will each hold themed fairs, carnivals or other activities this year.

Issuing Consumption Vouchers

37. The Government implemented two rounds of consumption voucher scheme in the past two years, under which electronic consumption vouchers of $5,000 and $10,000 were disbursed respectively to over six million eligible residents. The initiatives were well received by the community.

38. Having regard to the current economic situation, people's livelihood and the Government's financial position, I will issue electronic consumption vouchers again this year with a total value of $5,000 to each eligible Hong Kong permanent resident and new arrival aged 18 or above in two instalments.

39. To facilitate early disbursement of consumption vouchers, the Government will first disburse consumption vouchers valued at $3,000 in April this year using the registration data of last year's scheme. The remaining vouchers will be disbursed together with the vouchers for the new eligible persons in the middle of the year. In line with the arrangement for last year's scheme, eligible persons who have come to live in Hong Kong through different admission schemes or to study in Hong Kong will receive vouchers in half value, i.e. $2,500 in total. We will announce the details as soon as possible.

Supporting Enterprises

40. For easing the operating pressure of businesses, I propose:

(a) reducing profits tax for the year of assessment 2022/23 by 100 per cent, subject to a ceiling of $6,000. The reduction will be reflected in the final tax payable for the year of assessment 2022/23. This measure will benefit 134 000 businesses and reduce government revenue by $720 million;

(b) providing rates concession for non-domestic properties for the first two quarters of 2023-24, subject to a ceiling of $1,000 per quarter for each rateable property. This measure is estimated to involve 430 000 non-domestic properties and reduce government revenue by $740 million; and

(c) starting from July 2023, granting 50 per cent rental or fee concession to eligible tenants of government premises and eligible short-term tenancies and waivers under the Lands Department for six months until end-2023. This measure will reduce government revenue by approximately $1 billion.

41. The Government has been enhancing the SME Financing Guarantee Scheme (SFGS) continuously over the years to meet the financing needs of small and medium enterprises (SMEs) during economic downturns. As at end-2022, loans amounting to more than $230 billion have been approved under the SFGS, benefiting over 53 000 enterprises. As the Hong Kong economy is picking up steadily this year, it is expected that commercial financing will gradually return to be adjusted by the market. That said, it takes time for SMEs to consolidate their strengths on the way to recovery. I have, therefore, decided to extend the application period of all guarantee products under the SFGS from end-June 2023 to end-March 2024, thus giving SMEs more room to adjust and secure a firm footing.

42. To support cross-boundary passenger transport and the tourism industry, the Government will, drawing on the experience in implementing the above SFGS, launch new schemes to offer fully guaranteed loans for eligible passenger transport operators and licensed travel agents. It is estimated that the above schemes will involve a total loan guarantee amount of about $2.7 billion. Details of the schemes, which is expected to be launched within April this year, will be announced in due course. The Government will also extend the Travel Agents Incentive Scheme, which is due to expire by end-March 2023, for three months, with a view to facilitating the speedy recovery of the industry. In addition, the Government will inject $30 million into the Information Technology Development Matching Fund Scheme for Travel Agents, with the aim of encouraging the industry to undergo upgrade and transformation by making use of technology.

Supporting the General Public

43. I will introduce the following one-off relief measures to alleviate the economic pressure on the public:

(a) reducing salaries tax and tax under personal assessment for the year of assessment 2022/23 by 100 per cent, subject to a ceiling of $6,000. The reduction will be reflected in the final tax payable for the year of assessment 2022/23. This measure will benefit 1.9 million taxpayers and reduce government revenue by $8.5 billion;

(b) providing rates concession for domestic properties for the first two quarters of 2023-24, subject to a ceiling of $1,000 per quarter for each rateable property. This measure is estimated to involve 3.03 million domestic properties and reduce government revenue by $5.2 billion;

(c) providing an allowance to eligible social security recipients, equal to one half of a month of the standard rate Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance. This measure will involve an additional expenditure of about $2,721 million. Similar arrangements will apply to recipients of the Working Family Allowance, involving an additional expenditure of about $116 million;

(d) extending the temporary special measures under the Public Transport Fare Subsidy Scheme for a period of six months till October 2023 to provide commuters with a subsidy amounting to one-third of their actual monthly public transport expenses in excess of $200, subject to a maximum of $500 per month. This measure will involve an additional expenditure of about $1.08 billion. It is estimated that the scheme will benefit about 3.5 million commuters per month;

(e) paying the examination fees for school candidates sitting for the 2024 Hong Kong Diploma of Secondary Education Examination, incurring an expenditure of $151 million; and

(f) granting each eligible residential electricity account a subsidy of $1,000. This measure will involve an expenditure of about $2.9 billion. The current arrangement of distributing electricity charges relief of $50 a month to each eligible residential electricity account will be extended to the end of 2025. This measure will involve an expenditure of about $3.5 billion and benefit around 2.9 million residential households.

44. Besides, I propose to increase the basic child allowance and the additional child allowance for each child born during the year of assessment from the current $120,000 to $130,000 starting from the year of assessment 2023/24. This measure is estimated to benefit 324 000 taxpayers and reduce tax revenue by $610 million a year.

(To be continued.)

Ends/Wednesday, February 22, 2023
Issued at HKT 11:27