Staying competitive is priority, executives tell KPMG poll on Hong Kong budget expectations
Poll respondents urge Financial Secretary John Tsang to maintain competitiveness in his upcoming budget by offering tax incentives to working mothers and newlyweds and increasing transport subsidies.
Financial Secretary John Tsang Chun-wah has been urged to maintain Hong Kong’s competitiveness in his upcoming budget by offering tax incentives to working mothers and newlyweds and increasing transport subsidies for low income earners to attract more to join the workforce.
Accounting firm KPMG polled nearly 400 business executives recently on their expectations for the budget. It found that more than 40 per cent of respondents thought that the government’s priority should be the city’s competitiveness, followed by livelihood and housing issues.
More than half of the respondents said the government should focus on stimulating economic growth to increase tax revenues in a bid to overcome a possible structural deficit. Government fiscal advisers warned last year that the city could face a HK$1.54 trillion deficit by 2041.
KPMG is predicting the government would record a budget surplus of HK$65.5 billion for the fiscal year last year/15, significantly higher than the administration’s initial estimate of HK9.1 billion.
Ayesha Macpherson Lau, KPMG’s partner in charge of the Hong Kong market, explained the increase was mainly because of higher than expected revenues from stamp duty and profit tax.
She proposed that the government should introduce a HK$70,000 new working mother allowance and a HK$20,000 caregiver allowance to encourage women to rejoin or stay in the workforce.
“If somebody at home, for example their parents, could take care of their children, they would be worry-free to rejoin the workforce” Lau said.
She also proposed raising the transport subsidy for low income workers by HK$100 to HK$700 to encourage more people to work.
Tsang will deliver his budget speech on February 25.
