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Hong Kong Budget 2015-2016
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This time, Hong Kong finance chief has done better with his budget

John Tsang Chun-wah has rightly delivered what Hong Kong needs in the wake of the Occupy protests - a budget to help the healing process.

John Tsang Chun-wah has rightly delivered what Hong Kong needs in the wake of the Occupy protests - a budget to help the healing process. Apart from instilling some feel-good sentiments with enhanced sweeteners for the middle class and poor, the finance chief also announced relief measures to help trades affected by the protests, injected funding to reinforce the city's economic strengths and even added billions to our fiscal reserves for a rainy day. Given that a government budget is as much about addressing people's needs as investing in the future, Tsang appears to be on the right track this year.

Unlike Singapore, which sought to tax the rich to help the poor, Tsang rolled out a HK$34 billion relief package without tax hikes. This owes much to better-than-expected revenues. The surplus this year has surged from the original estimate of HK$9.1 billion to HK$63.8 billion, pushing the fiscal reserves to a staggering HK$819.5 billion. Politically, Tsang could not ignore pressure for another giveaway budget. The higher salaries tax rebate, increased child allowance and bonus welfare payments are likely to win him more applause this year. His largesse, however, will again reinforce expectations for more handouts in future - a trend to be discouraged.

The financial secretary was criticised for lacking vision and foresight in the past. This year, he went beyond the usual short-term relief measures and has offered licence fee waivers for hotels, travel agents and restaurants hit by the 79-day Occupy protests last year. With President Xi Jinping keen to strengthen trade and economic ties with countries along the land and maritime Silk Road, Tsang believes Hong Kong can take the opportunity to work with mainland authorities and expand into new overseas markets. He also did not shy away from boosting the tourism industry, amid growing frustration over an influx of shoppers from the mainland. The injections into the creative industries, as well as manpower training and business start-up initiatives, are also positive steps to enhance our competitiveness in the long run.

Tsang has yet to demonstrate stronger commitment in taming runaway property prices, other than with the usual promises to increase supply and a new land premium loan scheme to speed up circulation of government-subsidised flats.

Our robust fiscal position has allowed Tsang to invest in a better future. The Future Fund he set aside in the wake of an ageing population can, hopefully, give Hong Kong a stronger footing to take on the challenges ahead.

This article appeared in the South China Morning Post print edition as: This time, Tsang has done better
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