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Hong Kong economy

Finance minister Paul Chan hints at 2019-20 budget relief measures for Hongkongers hit by US-China trade war

  • Chan says he hopes to relieve the impact of economic instability on residents’ daily lives
PUBLISHED : Sunday, 09 December, 2018, 2:24pm
UPDATED : Sunday, 09 December, 2018, 11:29pm

Finance minister Paul Chan Mo-po on Sunday said he would consider including relief measures in his next budget to help Hongkongers under pressure from internal and external economic instability.

Chan’s assurances follow warnings of an economic slowdown in Hong Kong amid the US-China trade war.

The financial secretary revealed in his blog what he expected to be the broad direction of the February budget – “supporting enterprises, securing employment and stabilising the economy”.

“Judging from the overall environment, I expect Hong Kong’s economy will face many uncertainties and challenges in the next year. I have to carefully consider the risks of the internal and external macroeconomic situations,” he wrote.

“I hope to relieve the impact on residents’ daily lives.”

He urged Hongkongers to share their ideas for the budget in a public consultation exercise that began this week.

The minister announced last month that Hong Kong’s economic growth had slowed in the third quarter of 2018. The figure of 2.9 per cent was lower than expected, under the weight of weakened property and stock markets. It was the slowest quarterly growth in two years.

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The government has warned of “increasing downside risks” in the event of a protracted US-China trade war.

Last week political parties began submitting their proposals to Chan for February’s budget.

The New People’s Party called for a tax deduction for Hongkongers renting housing on the private market, with a maximum of HK$100,000 (US$12,790) of income exempted from tax.

Party chairwoman Regina Ip Lau Suk-yee, a member of the Executive Council that advises the city’s leader on policy, also proposed a tax cut for middle-class households employing a domestic helper.

For poorer families, the party suggested a waiver on public housing rents, and another month’s worth of social welfare subsidies.

Chan in his blog urged lawmakers to give the green light to a proposal from this year’s budget to increase the maximum contribution a worker can make tax-free to the Mandatory Provident Fund from HK$36,000 to HK$60,000. The fund is the city’s compulsory retirement savings plan.

Lawmakers must approve the measure before it takes effect, and Chan hopes to have it in force by April 1 next year.