Hong Kong Budget 2013
Financial Secretary John Tsang Chun-wah delivered his sixth budget speech on February 27, 2013, in which he unveiled HK$33 billion worth of relief measures and forecasted a surplus of about HK$64.9 billion for the 2012-13 financial year. Economic growth was expected to come in 1.5 to 3.5 per cent in 2013.
Tsang's tax relief won't go very far for middle class, critics say
The middle class will benefit from a "one-off" basket of relief measures, with more than 1.5 million taxpayers receiving a salaries tax rebate of up to HK$10,000.
Other measures proposed by Financial Secretary John Tsang Chun-wah include waivers of property rates, tax reductions and increased allowances. Many are repeats of sweeteners offered in previous years, some of them at lower levels than in last year's budget.
Tsang said the measures were intended to help middle-class families, but critics said they would have little impact.
"It's as expected - all the measures are to appease everyone, while failing to really address the big problems," said Lawrence Leung Kwan, sole breadwinner for his family of four, who earns about HK$50,000 a month as a management consultant. Leung said it fell short of what was needed to solve problems caused by rising living costs.
Salaries taxes and taxes under personal assessment will be subject to a 75 per cent rebate, with a maximum rebate of HK$10,000, lower than the HK$12,000 offered last year. The government expects 1.53 million taxpayers to benefit and says the move will cost HK$8.4 billion. The ceiling for tax deductions on personal education expenses will rise from HK$60,000 to HK$80,000.
"Why middle class benefits little from budget relief", Video by Hedy Bok
Tax on profits will also be subject to a 75 per cent rebate, also capped at HK$10,000.
Tsang announced a property-rates waiver of up to HK$1,500 per home, meaning 75 per cent of properties will not be subject to a rates bill. The measure will cost the government HK$11.6 billion but is less generous than the HK$2,500 per home last year.
Business registration fees will also be waived.
Up to 300,000 taxpayers will benefit from a one-off increase in the basic and additional child tax allowance from HK$63,000 to HK$70,000. The electricity subsidy remains at HK$1,800 per household.
Leung had hoped the government would do more to free up land and build housing to reduce rents. He also wants more spending on language and information technology learning in schools.
"While tax rebates and increased [child] allowances will benefit us, these things don't really change the situation, nor do they really make an impact for us," Leung said.