Three cases: how the budget affects small businesses, the elderly and middle-class families

Small and medium-sized enterprise operators Yeung Siu-lung, chairman of Chiba Garden in Yuen Long, which has 10 greenhouses, said he welcomed the government’s decision to waive business registration fees for the coming fiscal year to benefit 1.3 million business operators at a cost of HK$2.5 billion in revenue. The government presently charges HK$2,000 for a one-year certificate and HK$5,200 for a three-year certificate for business registration in Hong Kong. “It’s better than nothing. I think I will use the HK$2,000 to buy fertilisers,” he said. Yeung, who paid HK$280,000 for 16 stalls in the Lunar New Year fair in Victoria Park to sell orchids, said he managed to sell most of his flowers there. But he said he would have to wait until the end of the year to assess whether he would actually benefit from the government’s policy to cut profits tax by 75 per cent this fiscal year, capped at HK$20,000. “Reducing taxes helps everyone. But if I am in the red this year, I don’t have to pay [profits tax] after all,” he said. “We mostly rely on ourselves anyway.” Employing more than 10 people, 50-year-old Yeung spends an average of HK$200,000 per month to keep his flower business going. He said he would prefer the government to grant low-interest loans to farmers and provide them with affordable land to farm on. He said he was not aware of the SME Financing Guarantee Scheme mentioned by Financial Secretary John Tsang Chun-wah in his budget speech to help small and medium enterprises borrow money from banks. Under the scheme, which was launched in 2011, the Hong Kong Mortgage Corporation would partially guarantee approved loans taken out by eligible Hong Kong companies with a good loan repayment history. Elderly It was another disappointment for 69-year-old Law Ching-fung, as John Tsang Chun-wah’s budget speech came to a close with many of her financial and health-care needs unanswered. Law, unmarried with no children and living in a public rental housing flat in Kwun Tong district, was one of the many elderly people who closely followed the budget speech at the Hai Tan Street Office of Society for Community Organisation (SoCO). Law said that while there were some relief measures by the government for the elderly and underprivileged, they were not “enough”. For example, she would be receiving an extra allowance equivalent to one month of the Old Age Living Allowance, but Law said that the amount was barely enough to cope the increasing high cost of living in Hong Kong. “Some people might think we elderly are asking for a lot, but things are becoming a lot more expensive now,” she said. The extra allowance for social security recipients this year is a drop from last year’s, which was equivalent to two months. Another area Law gave a thumbs-down to was the removal of a waiver for public housing rent – a relief measure in place since 2008. Last year, the government paid one month’s rent for lower-income tenants living in the rental units of the Hong Kong Housing Authority (HKHA) and the Hong Kong Housing Society (HKHS), which involved an expenditure of $1.1 billion. “There is an increase in rent every two years. Actually the waiver last year only covered the rent increment,” she explained. On the Silver Bond, announced as an investment product with steady returns to be launched as pilot scheme later this year and next year, Law said was not interested as she doubted she would have the money to invest. She said she would worry that stocks would fall or she would have her Old Age Living Allowance taken away from her if she invested in the bond. Middle-class families Engineer Terence Kong Fu-keung, 48, who has two daughters aged 12 and 17, thinks the budget meets his expectations and is generally pleased with the relief measures, which he believes can help middle-class families like his own. “I’m actually surprised that the rates are waived for four quarters – I expected only three,” said Kong. “I can save HK$4,000 in rates this year, around HK$400 more than last year.” HK$4,000 is the maximum amount a family can save in waived rates as each quarter is subject to a ceiling of HK$1,000 for each rateable property. With a combined monthly income of around HK$60,000 and a rented flat of around 500 sq ft in Ma On Shan, Kong and his wife usually pay HK$1,400 in rates per quarter. Watch: What’s life like for a Hong Kong middle-class family with five girls? Kong was also pleased with the 75 per cent reduction in salaries tax and tax under personal assessment. He believes he can fully benefit from the HK$20,000 ceiling. With the family also having a total of three elderly aged above 65 to support, Kong was disappointed that the scope of the dependent parent allowance was not expanded to every child of the dependent parent. “My three siblings and I have to take turns applying for the dependent parent allowance every year,” he said. “Next year it shall be me.” He believed his parents, aged 78 and 70, are still happy with the extra month of old age allowance and old age living allowance, although it was two extra months last year. “This is like bonus money to them,” he said. “I give them a few thousand every month.” With above one-third of their monthly income spent on flat and car park rentals, and over HK$15,000 on their daughters’ education, Kong said it was difficult for his family to save extra money. “But I guess this is as good as it can get,” he said.