The business community applauded aspects of the ''back to basics'' thrust of the Policy Address but said the Government's economic relief measures would have no immediate impact. Mr Tung announced a plan to provide $5 billion in rates rebates, a $1.9 billion fund for small and medium-sized enterprises, and an increased cap for salary tax deductions on mortgage interest payments from $100,000 to $150,000 a year. Accountants and economists said the rates rebates - a maximum of $2,000 per property - and increased mortgage interest deductions would not be felt for 12 to 14 months. Ernst and Young chairman of tax services Stephen Lau said increasing loans available to individual small and medium-sized firms from $1 million to $2 million was fine under the $1.9 billion package but such firms found the loans difficult to apply for. Mr Lau said Mr Tung's $600 billion earmarked for infrastructure projects was to be spread over 15 years, which would have little impact on employment and the economy. ''The topics are right but there was not enough meat on the bones,' Mr Lau said. ''The $5 billion [in rates rebates] may seem like a lot of money to the Government in terms of the deficit but to the man in the street it's a drop in the ocean.'' JP Morgan economist Joan Zheng said some of the short-term measures announced would cushion the impact of the downturn but would not offset the drag on the economy from the deteriorating global economy. ''The important thing is how the market and the public react, because if people don't feel confident they're not going to spend any additional money,'' Ms Zheng said. National Australia Bank economist Kevin Lai was unimpressed by the ''back to basics'' Policy Address. ''I'm very disappointed in the relief measures because they won't be felt until next year when we have the problem right now,'' Mr Lai said. Deloitte Touche Tohmatsu senior tax partner Yvonne Law said the $150,000 mortgage interest cap was a small measure that would amount to only $7,500 per property a year to a person paying salaries tax at 15 per cent. ''We see no measures to help the retail business or stimulate domestic demand,'' Ms Law said. Hong Kong General Chamber of Commerce chairman Christopher Cheng welcomed the plan to create 30,000 short-term jobs, some of which would be involved in cleaning and greening the city. Mr Cheng said three-year multiple-entry China visas for Hong Kong residents who were foreign nationals and the unlimited quota for mainland tourists were both good moves. Victor Lo Chung-wing, chairman of the Hong Kong Federation of Industries, welcomed ''all the projects related to improving links with the Pearl River Delta'', such as the proposed high-speed railway linking Hong Kong, Shenzhen and Guangzhou and the establishment of a Hong Kong Government representative office in Guangdong. Christopher Hammerbeck, executive director of the British Chamber of Commerce, welcomed the building of a $2 billion exhibition and convention centre at Chek Lap Kok and the continued push to develop Hong Kong as a logistics hub and service centre. However, he was disappointed no timetables for the proposals were given. Trade Development Council chairman Peter Woo Kwong-ching said Mr Tung had struck a right balance between providing relief, such as rate reductions, while remaining true to a philosophy of small government.
