 |
Financial Secretary Announces Budget for 2013-14 |
|
| |
|
|
| |
 In February 2013, Hong Kong Financial Secretary Mr John Tsang delivered his first Budget address of the new Chief Executive’s term of Government.
The main themes of the Budget – “developing the economy, optimising human resources, investing in infrastructure and caring for people's livelihood" – echoes the directions of the Hong Kong Government as outlined by the Chief Executive Mr C Y Leung in his Policy Address earlier in the year.
Fiscal outlook
The Financial Secretary forecast a Budget surplus of about HK$64.9 billion in 2012-13 mainly due to higher-than-expected revenue from earnings and profits tax. By the end of March 2013, the fiscal reserves are expected to be HK$734 billion, equivalent to 36% of GDP or 23 months of government expenditure.
Hong Kong's simple and low tax regime, with a corporate profit tax of 16.5% and a maximum of 15% (for personal tax) remain unchanged.
The healthy budgetary situation allowed the Financial Secretary to announce a range of tax concessions and other measures to ease the burden for families.
In 2013-14, social welfare, education and medical services continue to be the Government's major expenditure areas. About HK$170 billion is budgeted for these three areas, about 60% of recurrent government expenditure. Education is the single largest spending area with estimated recurrent expenditure for 2013-14 of HK$63 billion, accounting for more than one-fifth of total recurrent government expenditure. For 2013-14, the Financial Secretary forecasts a HK$4.9 billion deficit. The fiscal reserves are estimated to stand at HK$729.1 billion by the end of March 2014, representing approximately 34% of GDP or equivalent to 20 months of government expenditure.
Investing in Infrastructure
Capital works expenditure for 2012-14 will reach HK$70 billion, which is expected to create about 75,000 job opportunities. Major infrastructure projects being undertaken or planned include a new metro line (i.e. Shatin to Central railway link); road projects (e.g. Central-Wan Chai Bypass, Tuen Mun-Chek Lap Kok Link); expansion and redevelopment of several public hospitals; construction of an indoor stadium; and development of organic waste treatment facilities in Lantau Island. |
|
| |
|
|
| |
Developing the economy
The two main areas of work highlighted in the Budget were: (1) fostering economic integration with Mainland China; and (2) strengthening Hong Kong's pillar industries (i.e. Trading and Logistics, Tourism, Financial Services, and Business and Professional Services) as well as supporting new industries. The key measures unveiled included:
|
|
| |
|
|
| |
Trading and logistics industry |
|
| |
 |
Designation of 12 hectares of land at Tuen Mun West and Tsing Yi for developing new logistics facilities |
|
|
| |
|
|
| |
Tourism |
|
| |
|
Offering a HK$2.3 billion loan to the Ocean Park Theme Park (winner of the 2012 Applause Award, making it the world`s best theme park) to build an all-weather water world |
|
|
| |
|
|
| |
Financial services industry |
|
| |
|
Expanding the size of the Government Bond Programme from HK$100 billion to HK$200 billion |
|
Issuing inflation-linked bonds (iBond) worth up to HK$10 billion |
|
Allowing private equity funds to enjoy the same tax exemption as offshore funds |
|
Reducing profits tax on the offshore insurance business of captive insurance companies to attract them to establish in Hong Kong |
|
|
| |
|
|
| |
Emerging industries |
|
| |
|
Providing Hong Kong’s six universities with a subvention of up to HK$12 million each for a period of 3 years to support technology transfers |
|
Allocating HK$50 million to acquire local visual artists’ outstanding artworks |
|
|
| |
|
|
| |
Small and medium enterprises |
|
| |
|
Waiving business registration fees for 2013-14 |
|
Reducing profits tax for 2012-13 by 75%, subject to a ceiling of HK$10,000 |
|
Increasing the cumulative amount of the grant under the SME Export Marketing Fund from HK$150,000 to HK$200,000 |
|
|
| |
|
|
| |
Optimising human resources
Substantial investment will be made in education and training, with key measures including: |
|
| |
|
Injecting HK$5 billion into the Language Fund to support projects aimed at promoting bi-literacy and tri-lingualism among students |
|
Injecting HK$480 million to the Government Scholarship Fund to set up scholarships for outstanding local students to pursue studies in prestigious overseas universities |
|
Injecting HK$40 million to establish scholarships to give recognition to outstanding tertiary students with special education needs |
|
Allocating HK$12 million to the Vocational Training Council to support students with special education needs |
|
Establishing a HK$100 million training fund for maritime and aviation transport to attract young people to enrol in related skills training |
|
|
| |
|
|
| |
Caring for people's livelihood
To ease the pressure on the middle class, grassroots and SMEs, the Financial Secretary announced a range of counter-cyclical relief measures worth HK$33 billion. They include one-off measures such as tax concessions, electricity subsidies, extra welfare allowances, and waiving two months' rent for public housing tenants. The Financial Secretary also proposed injecting an additional HK$15 billion into the Community Care Fund to support the work of poverty alleviation. |
|
| |
|
|
| |
The full text of the 2013-14 Budget is available at http://www.budget.gov.hk/2013/index.html
|
|
| |
|
|
