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Hong Kong Budget 2015-2016
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Lau Kin-wai, a food critic, owns Kin's Kitchen restaurant. His business benefits from a waiver on licence fees.

The people's verdict on Hong Kong's budget

As the ink dries on Hong Kong's giveaway budget chock-a-block with sweeteners aimed at defusing political strife, people are weighing up what they are getting - or not getting.

As the ink dries on Financial Secretary John Tsang Chun-wah's giveaway budget chock-a-block with sweeteners aimed at defusing political strife, people are weighing up what they are getting - or not getting.

He had plenty to give away. For the eighth time, he underestimated the surplus, now set to hit HK$63.8 billion when the financial year ends on March 31, more than six times his estimated HK$9.1 billion.

In the main, the budget benefits the middle class, the elderly and disabled. Measures include a 75 per cent reduction in profits and salaries taxes, subject to a HK$20,000 ceiling; an increase in child tax allowance; a two-month waiver on property rates; one month rent-free for public-housing tenants; and a two-month bonus for people on Comprehensive Social Security Assistance and the old-age and disability allowances.

The budget ignored calls to introduce a universal pension. It was also silent on property-cooling measures, although yesterday the government announced moves to tighten lending on properties valued at less than HK$7 million and on second homes.

Tsang did pay heed to the so-called silver tsunami - the problems associated with Hong Kong's ageing population - which he called a "formidable challenge". The government's census department projects that a third of the population will be aged 65 or above by 2041. That means the government has to spend more on elderly and health care, but fewer people will be working and therefore paying taxes.

We asked six Hongkongers from a range of backgrounds how the budget affects them.

 

THE ELDERLY RETIREE

I think the budget this year is pretty good. I watched the entire announcement on television. After all, it's not like I have that much else to do.

The budget takes care of elderly residents who live in public housing, people like me. The government will pay my rent for a month, and I receive extra benefits. I get two months' worth of my old-age living allowance.

We got benefits from previous years too, but I don't think I've ever had two different relief measures apply to me. It's not just public housing, but all elderly residents in Hong Kong.

I've been living here in public rental housing for more than 40 years. I've been retired for a long time, around 20 years. I used to make leather goods and bags. I live with my children and grandchildren and they're all satisfied with the budget too. But of course, a government cannot take care of everyone. Some people won't be as pleased; the middle class, for example.

But it's pretty decent for everyone else.

This budget is better than I expected. The government is always telling us how they don't have a lot of money, and give us these pessimistic forecasts, but it turns out they have billions of extra dollars. That's a lot of money.

Next year, of course I hope there will be fewer clashes and that the society can live in harmony. It would be great if everyone could just work together for the benefit of Hong Kong. Some people in the Legislative Council aren't thinking about the issues; they're thinking about who they like or dislike.

They're just picking on each other, engaging in partisan conflicts. I wish they could tolerate their counterparts; that would make society better overall.

 

THE ARTISTIC DIRECTOR

This new grant scheme gives me hope that the government is serious about supporting local arts groups, particularly the smaller ones run by younger people. But how will this scheme be different to the current Arts Capacity Development Funding Scheme?

One major problem we have at the Hong Kong New Music Ensemble is how to obtain private sponsorship [to get the matching grant]. We know corporate sponsors and private donors exist but very often we don't know where to find them. We also rarely have the manpower to explore leads, most of which end in failure, in order to investigate partnerships.

Can this new scheme also be a facilitator and match-maker between arts organisations and donors? I hope so. My fear is this kind of scheme could make the biggest, most powerful arts groups in Hong Kong even richer, and the smaller ones just remain the same. The smaller arts organisations are actually the ones in greatest need of this kind of grant, even though they may offer less corporate branding potential.

[His ensemble won a project grant in 2013 from the Home Affairs Bureau for organising The Modern Academy course to train young artists.] This new grant, if we get it, would let us achieve even larger artistic goals - particularly in terms of our education and outreach activities - working in partnership with the corporate community.

Part of our longer-term strategy is to continue The Modern Academy and launch a significant commission scheme for composers. With the new funding, we hope to launch more projects for my group of 17 musicians specialising in Western and Chinese instruments.

 

THE MOTHER AND SON

They gave us a bigger tax allowance. That helps a little bit, but not much.

I used to make tens of thousands of dollars a month, but we didn't want to get a helper to look after my grandson, so I quit work. [Her son explains that he and his wife have to work full-time to pay the mortgage on their flat.]

I used to work at a bank. I stopped working since the baby was born in 2014. I spend my days taking care of my grandson. Every year, we follow the budget to see if anything affects us.

The budget hasn't really changed much in the past few years; they've been doing the same things over and over.

Now more and more people are having children, at least where I live in Southern District, and the government wants to encourage people to have children. But there's a serious lack of childcare. We make a decent amount of money, but sending a child to a playgroup is really expensive, HK$300 or HK$400 per hour.

Kindergartens are expensive too, the better ones cost as much as HK$10,000 a month. So if you have a child, just tuition and transport will cost you over HK$10,000. That's more than we can take, even as a middle-class family.

The government really needs to do something about the housing market; it's scary. I have another son: he and his wife make HK$100,000 a month in total and they can't afford to buy a flat. All they can get is something that's 200 or 300 sq ft. It's insane.

The government should think of long-term plans, rather than just giving us short-term relief measures. It's like when you're thirsty and they give you a drop of water to quench your thirst. What about a long-term water supply?

 

THE RESTAURANT BOSS

This year's surprise is the financial secretary's suggestion to bring food trucks to Hong Kong. Most officials would rather minimise mistakes instead of making new suggestions, so this is quite refreshing.

The idea of food trucks is interesting. It is quite developed overseas but new in Hong Kong.

Small-scale food establishments have their appeal. The night market on Kweilin Street [in Sham Shui Po, where hawkers gathered during previous Lunar New Year holidays] was exciting. But some Democratic Alliance for the Betterment and Progress of Hong Kong members and the Food and Environmental Hygiene Department had to crack down on it this year.

On the one hand, you talk about food trucks and yet, on the other hand, you don't even allow hawkers to operate for three days a year. It is contradictory. Given this context, the idea of food trucks appears ad hoc in the budget.

Promoting Hong Kong food culture is a topic the government should study systematically. For example, it may allow night markets like Kweilin, while ensuring hygiene standards and minimising nuisance to the neighbourhood. Encouraging private kitchens would also be interesting.

As a relief measure, the government will waive six months of licence fees for restaurants. That may amount to several thousand dollars, and is minimal compared to the hundred thousand a restaurant spends every month.

In the long run, the labour shortage is still the biggest problem faced by a restaurant. We pay way more than the minimum wage, but we still can't hire enough staff. We can't hire dishwashers even with a monthly salary of HK$14,000. The government must consider allowing us to import labour.

 

THE BUSINESSMAN AND FATHER

On one hand, [the government] says that the population is not growing, no one is having children. On the other, they're not doing anything in the long run to help us.

Forget child allowance, if they really want to help people in need, go to the kindergartens, which are not controlled by the Education Department. For my kid, we have to pay HK$4,000 or HK$5,000 for kindergarten, a month … The kindergarten industry is probably the most profitable. You have a group of kindergartens that charge through the roof, and another group who get [government] vouchers. If they are so sincere about it, why not regulate it all?

What they really need to do is close the gap in housing. We all need to live somewhere, and if you spend 40 or 50 per cent of your income on housing, that doesn't leave much to do anything else. [Rent takes up] maybe 35 per cent [of income]. It's not going down.

Let's say you can buy a decent priced house, and you spend less on rent. Then we can plan our retirement. Right now, we're not doing anything. We basically hope for the best.

Our income is going into rent; the Mandatory Provident Fund means nothing because there's only a minimum for retirement. So what happens when we get old? For sure we have to rely on the government, right?

The first thing [the financial secretary] has to do is to get the budget right. He never gets his figures right. It's not even a joke any more, it's like you're in school and in maths class and you are given a formula, and you get it wrong by like, a couple of hundred per cent? That's not even a joke, that's something to be ashamed of. You have a proper budget forecast, then you can plan.

 

THE FASHION INDUSTRY INSIDER

The government has shown goodwill in launching the programme. But it should find out what the industry needs.

Instead of offering mentorship, it would be more effective to help start-ups to showcase their collections in European fashion shows. The ultimate goal of many designers is to do that. It is the cost that is stopping them.

To join a European show, you must hire a public relations firm and pay for a showroom. If the government wants to help, it can cooperate with showrooms in Paris or Milan to feature works by local designers. It is also difficult for a start-up to join the Hong Kong Fashion Week. It always features the same brands and is by invitation only. It is run by a small circle of designers.

If the government wants to boost the industry, it should have an effective screening mechanism, selecting start-ups which have built a reasonable collection before helping them to promote.

Previous attempts such as PMQ [the former Police Married Quarters on Hollywood Road, which was turned into a creative hub] were not helpful, because many occupants can only survive due to heavy rent subsidies. Some local designers do not reach international standard, and once the rental support is removed they cannot survive in the outside world.

One problem is government-backed programmes usually benefit those who are good at writing proposals.

Going back to the basics, funding is what start-ups need most. The most attractive offer would be a low-interest loan.

 

This article appeared in the South China Morning Post print edition as: The people's verdict
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