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Nikki Sun

Gary Cheung

Financial Secretary Paul Chan Mo-po will unveil a package of incentives to nurture education in Hong Kong and promote innovation and technology, as well as offer a salaries tax rebate when he delivers the government’s budget on Wednesday.
Watch: Why the Hong Kong government has so much money saved up

Chan, delivering his first budget as the city’s top finance official, will post an HK$80 billion budget surplus, far exceeding the forecast HK$11 billion, due to record land sales revenue mainly created by mainland capital, according to a person familiar with the city’s finances.
More money, tax concessions and bigger rebates: a wish list for Hong Kong’s budget
The budget may be Chan’s single shot at directing fiscal spending in the direction of his public finance philosophy and policy agenda, said the source. Chan’s tenure will expire on June 30 if he is not appointed by the incoming chief executive after an election for the city’s top job on March 26.

Chan’s spending priorities will be a departure from those of his predecessor, John Tsang Chun-wah, whose fiscal goodies in the last budget were derided by critics as being too conservative.
Hong Kong’s currency reserves have ballooned to HK$908.3 billion, even as the city’s economy struggles with a slump in tourism receipts.
Hong Kong residents will get a tax rebate on salaries in the 2017-18 financial year similar to last year’s package, to boost domestic consumption and cushion the downturn in tourism revenue, the source said.
Last year, the government cut salaries tax and tax under personal assessment by 75 per cent with a ceiling of HK$20,000, which benefited almost two million taxpayers including 200,000 people who completely slipped out of the tax net.
Education will be a major spending area, with plans to extend a programme to provide free kindergarten attendance for all children, the source said.
Last year, the government made 80 per cent of half-day kindergarten classes in the city free.
But residents should not expect another cash handout, any subsidies on electricity tariffs or exemptions from public housing rents, the source said. Tsang oversaw a one-time cash “sweetener” of HK$6,000 per resident handed out in the 2011-12 financial year.
Billy Mak Sui-choi, an associate professor at Baptist University, said the city should not rely on one-off relief measures to boost the economy, and government funds would be best used to help those badly in need.
“Only the middle class are qualified for substantial tax rebates, but those people won’t suddenly increase their spending because they receive extra sums of money” because they had established consumption patterns, Mak said.
Younger residents, typically a major force in spending, had not earned enough to be major beneficiaries of the rebates, he added.
The government’s approach to tourism will be more along traditional lines in the form of subsidies to the Tourism Board instead of funding for food trucks, which Tsang unveiled last year.
Land sales revenue soared to a record HK$71.88 billion in the first nine months of the current financial year due to a flood of mainland Chinese capital, leaving a cumulative surplus of HK$65.4 billion in the city’s coffers, the 12th consecutive year that government finances have been in surplus.
Writing in his weekly blog, Chan said a site at the former Kai Tak airport site had been sold at a price 87 per cent above the higher end of market expectations, contributing to the surplus.
Before throwing his hat into the ring to be Hong Kong’s next leader, Tsang unveiled a HK$38.8 billion package of fiscal goodies for the city’s residents, including a HK$2 billion innovation and technology fund to match investments by private-sector venture capital in local start-ups.
His political critics, however, said Tsang had been too conservative with his spending.
They have pointed to Hong Kong’s showing in surveys as one of the 10 most unequal economies in the world, even as the city remained the world’s freest economy for 23 years running, according to the right-wing Washington-based think tank the Heritage Foundation.
The uneven showing underscored the need to redistribute government spending towards the needy, Mak said.
“The stock market has been doing well,” he said. “The jobless rate has remained low and people are still seeing an increase in salaries. In general, the size of current relief measures is pretty reasonable.”


More money, tax concessions and bigger rebates: a wish list for Hong Kong’s budget

Hong Kong’s 12th fiscal surplus to fund education, innovation and a salaries tax rebate

Use the budget to make sure our city has a bright economic future

Hong Kong hits four-year low in quarterly economic growth

Hong Kong Budget 2016-2017

Children from Ng Sheung Nang Kindergarden perform a fitness dance routine. The government is set to extend a programme to make kindergarten education free for more children. Photo: Jonathan Wong

Financial Secretary Paul Chan Mo-po attends Chief Executive Leung Chun-ying policy address announcement at the Legco Chamber in Tamar. 18JAN17 SCMP / K. Y. Cheng

The community has high hopes of Financial Secretary Paul Chan, who delivers his maiden budget on Wednesday. Photo: Nora Tam

Yan Nga-chi and his daughter Wong Zi-Wei, 4 years old, in their apartment in Sham Shui Po. 25NOV16 SCMP / Dickson Lee

This image shows Law Mang-hing, director of Sun Fat Heung Food product factory, with tofu product, 390 Law Uk Tsuen, Wang Toi Shan, Kam Tin Road, Pat Heung, Hong Kong on September 14, 2016. 14SEP16 [MADE IN HONG KONG POST MAGAZINE] SCMP / Edward WONG

Middle class Bergman Li Chak-lam and his son Irvin in their home at Tsang Kwan O talk about the Budget. 17FEB17 SCMP / K. Y. Cheng

(L to R) Donald Ng Pat-hin, Hazel Lam Hei-tung, principal Jessie Cheung Chok-fong and Gordon Chong Wai-chak pose for a picture at Father Cucchiara Memorial School, Cheung Ching Estate in Tsing Yi. 25MAY16 SCMP/David Wong

Portrait of Shirley Yuen, CEO, Hong Kong General Chamber of Commerce (HKGCC), at HKGCC office in Admiralty. 17FEB15

Chan Sing-moon, 71 in The Hong Kong Association of Senior Citizens in Sham Shui Po. 20FEB17 SCMP / K. Y. Cheng [For budget story]

Hong Kong budget preview: financial relief for tourism, retail businesses affected by economic downturn and tens of billions in one-off sweeteners

No Caption Available.

Financial Secretary John Tsang Chun-wah will deliver his budget speech on February 24. Photo: David Wong

Hong Kong budget recap: salaries tax to be reduced by 75 per cent, capped at HK$20,000

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A woman uses her smartphone in front of an electronic board showing the Hong Kong index at a bank in Hong Kong, Friday, Feb. 12, 2016. Japan’s main stock index dived Friday, leading other Asian markets lower, after a sell-off in banking shares roiled investors in the U.S. and Europe. (AP Photo/Kin Cheung)

A General view of the construction site of West Kowloon Terminus of the Hong Kong section of the Express Rail Link. 01DEC15

The under construction Hong Kong-Zhuhai-Macau Bridge viewing from Lantau Island. 05NOV15

Pressure groups appeal to FS for budget relief measures at Legco Complex. 24FEB16 SCMP/Edward Wong

Photo for the story on Government are studying the fixed penalty for illegal parking. Photo taken in Wan Chai. 08MAY15

A rioter throws a piece of a paving stone as a fire burns in the Mong Kok area of Hong Kong, on Tuesday, Feb. 9, 2016. Rioters set fires and threw bricks at police in Hong Kong early Tuesday, injuring officers and shuttering one of the city's busiest subway stations in a clash over illegal food stalls during the three-day Chinese New Year holiday. Photographer: Billy H.C. Kwok/Bloomberg ORG XMIT: 604115421

John Tsang Chun-wah delivered his ninth budget speech. Photo: Sam Tsang

Hong Kong budget speech gains John Tsang political traction

John Tsang delivers the budget speech at the Legislative Council. Photo: AP

Hong Kong budget sweeteners help lift some of family's cash burden

Teresa and Matchy Choi with their two children, Josh and Elsa. Photo: Nora Tam

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Paul Chan expected to post HK$80 billion surplus when he delivers his first government budget this week in his new job as city’s top finance official


Exclusive | Hong Kong’s 12th fiscal surplus to fund education, innovation and a salaries tax rebate

Paul Chan expected to post HK$80 billion surplus when he delivers his first government budget this week in his new job as city’s top finance official