Blog

Keep up the effort

The Appropriation Bill 2021 was passed by the Legislative Council (LegCo) last Wednesday. My thanks goes to the 40 LegCo members who supported the bill. I am also grateful for the valuable comments offered by all member during the vetting of the Bill. Though a fiscal deficit of more than HK$200 billion was recorded in the last fiscal year, I still decided to formulate a deficit budget of over HK$100 billion this year, in order to support people’s livelihood and our economy through countercyclical measures.

Hong Kong has undergone economic contraction for six consecutive quarters, which is the longest recession on record. During this period, Government consumption expenditure has increased by 6% to 10%, partially offsetting the contraction in private consumption expenditure thus providing a countercyclical support to the economy. With gradual improvement seen in export and investment, Hong Kong’s economic performance will record a notable growth in Q1 this year. Nonetheless, business operation in some sectors are still facing huge pressure due to the epidemic and social distancing measures, which leads to an uneven recovery across different sectors.

After the passage of the Budget by the LegCo, the various supporting measures will be taken forward at full speed to benefit the public and the enterprises as soon as possible, so as to alleviate some of the pressure amid the uneven economic recovery.

The “Lifestyle Shopping Fest” running at the HKCEC is the first physical exhibition organised by HKTDC since the epidemic outbreak early last year. I toured the exhibition last week to show my support to the merchants.

For instance, although the unemployment rate has slightly receded from the record high, the rate in some sectors still remains at a high level and the unemployed have been facing financial pressure. To provide them with a supplementary option, the 100% Personal Loan Guarantee Scheme (PLGS) was proposed in the Budget. The PLGS is opened for application since mid of last week and about 7000 loan applications were received in the first three days. The participating banks have received many enquiries and are proactively processing the applications, with preliminary approval cases from applicants in the logistics and transport, retail and catering sectors.

Other Budget measures will be gradually rolled out as well. For instance, to enhance students’ interests in information technology, the “Knowing More About IT” programme will provide funding up to HK$400,000 to each school with technical support by the OGCIO, with a view to enriching primary school students with more IT experience through extra-curricular activities.

We are also taking forward in full steam the much-attended electronic consumption voucher scheme. The four selected Stored Value Facility (SVF) operators are now assisting more merchants to install payment devices. The second round of the subsidy scheme for promotion of contactless payment in public markets under the Anti-epidemic Fund has also been launched. The scheme will extend its eligibility to cover not only stall tenants of the markets under the Food and Environmental Hygiene Department and the Housing Authority, but also licensed hawkers. Successful applicant will receive a one-off subsidy of HK$5,000. Application will be open until June 30. This Scheme will help to promote the use of e-payment among the small and medium merchants, which can in turn offers more convenient payment options for the public. I believe when the electronic consumption voucher scheme launch in the summer holiday and coupled with the merchants’ concession and promotion initiatives, it could energise the market and provide a positive sentiment.

Furthermore, we have been providing multidimensional support to our SMEs. For example, the Budget injected HK$1.5 billion to the BUD Fund to assist enterprises in exploring markets in 37 economies (including the Mainland) which have entered into Free Trade Agreements or Investment Promotion and Protection Agreements with Hong Kong. Taking into account the difficulties faced by SMEs in promoting overseas under the pandemic, the Trade and Industry Department has expanded the funding scope of SME Export Marketing Fund to cover exhibitions targeting the local market as well as online exhibitions. Together with the support of the Convention and Exhibition Industry Subsidy Scheme, enterprises could take part more actively in different local exhibitions to promote their business. The “Lifestyle Shopping Fest” running at the HKCEC is one of the activities that could be benefited from these schemes. This event is indeed the first physical exhibition organised by the Hong Kong Trade Development Council since the epidemic outbreak early last year. I toured the exhibition last week to show my support to the merchants selling various products, such as snacks, drinks, healthy food, household products and jewelleries. There are also booths by young people’s start-ups, showing well designed cultural products and potted plants. The event organiser also set up a dedicated platform for the suppliers or their sponsored KOL to promote their products online.

Supporting people’s livelihood and stabilising the economy are the short term goals set in my Budget. As for supporting enterprises, apart from reducing profits tax, providing rates concession for non‑domestic properties, and waiving business registration fees, the Budget also proposed to enhance the Special 100% Guarantee Product under the SME Financing Guarantee Scheme. The enhancements have already been fully implemented to address the financing needs of enterprises.

As for supporting individuals, apart from the PLGS, the Budget also proposed to reduce salaries tax and tax under personal assessment, provide rates concession, grant each residential electricity account a subsidy of $1,000, and provide an extra one-half-of-a-month allowance to eligible social security recipients. The electronic consumption voucher scheme could benefit both individuals and the enterprises. As for the well-received i-Bond, it will be launched later this month.

To promote a full economic recovery, the key is to contain the epidemic as soon as possible. Only by winning the battle against the virus, we can resume people’s daily activities to the largest extent, including the safe and free travel with the Mainland and other international cities, so that economic recovery could be achieved. Although the local epidemic is largely under control at this moment, the recent virus variant cases reported in the community have raised concerns about the risk of resurgence of epidemic in Hong Kong. The epidemic development in some overseas countries is also worrying, and therefore our efforts in preventing imported cases has become ever more important. I appeal you all to get vaccinated, which is the only way to help yourself to build up your immune system against the COVID-19 virus and to safeguard your own and your families’ health. This is also crucial for the society to return to normal.

May 2, 2021