John Tsang likely to trim size of budget handouts

Financial chief will keep more cash in reserve  to help people on low incomes, source says

PUBLISHED : Wednesday, 27 February, 2013, 12:00am
UPDATED : Monday, 03 October, 2016, 5:52pm

Taxpayers and property owners will be granted another package of relief measures by Financial Secretary John Tsang Chun-wah today, as the government is expected to pocket a fiscal surplus of more than HK$60 billion in the current 2012-13 financial year.

But the size of the sweeteners to be doled out in this year's budget - including a waiver of property rates and a salaries tax rebate - will be smaller than last year's, as the government hopes to reserve more resources to help low-income people.

A government source said the waiver of property rates would be offered for all four quarters in the next financial year - 2013-14 - but the ceiling would be lower than HK$2,000 for each property for each quarter, compared with that of HK$2,500 per quarter granted in last year's budget.

The source said owners of most small and medium-sized flats would not be affected by the reduction.

The waiver of rates in last year's budget cost the government HK$11.7 billion.

The tax rebate granted in today's budget is likely to be cut back to about HK$10,000, compared with HK$12,000 offered in last year's budget.

"The loss of revenue for government coffers will be smaller, while not so many taxpayers will be affected if the tax rebate, and the ceiling of the rates waiver, is adjusted a bit downwards. By doing so, the government can earmark more to help low-income families," the source said.

The fiscal surplus for the current financial year is expected to be slightly lower than the surplus of HK$66.7 billion in 2011-12 - in contrast to the deficit of HK$3.4 billion estimated by the financial secretary in last year's budget.

The budget surplus is much larger than expected, thanks to the significant increase in stamp duty from stock transactions

"The budget surplus is much larger than expected, thanks to the significant increase in stamp duty from stock transactions - particularly in the second half of the current financial year - and profits tax," the source said.

Tsang is expected to deliver a balanced budget for the next financial year.

Tsang granted a salaries tax rebate of up to HK$12,000 last year, an increase from HK$108,000 to HK$120,000 in the basic salaries tax allowance, and a HK$1,800 electricity subsidy for 2.5 million households.

The finance chief will continue to offer an electricity charge subsidy and increase the child allowance in the forthcoming budget. But the basic allowance and dependent parent allowance will remain unchanged.

Tsang's sixth budget will take less time to deliver than last year, when he spoke for two and a quarter hours, the source said.

The financial chief will also announce the issuing of the third batch of inflation-linked bonds, worth more than HK$10 billion, to help ease the impact of inflation.