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SCMP Reporters

Hong Kong’s economy is set to bounce back from the devastation wrought by the Covid-19 pandemic to register growth of up to 5.5 per cent in 2021, a boost that will allow the finance chief to dish out coupons worth HK$5,000 (US$645) to each permanent resident. 
Financial Secretary Paul Chan Mo-po delivered an optimistic outlook for the city’s economic recovery during his budget address on Wednesday morning, assuming the successful roll-out of the city’s Covid-19 vaccination drive, which launched this week.
He forecast economic growth of 3.5 per cent to 5.5 per cent for the calendar year. But the gross domestic product forecast would take the economy back to 2017 levels.
To revive the economy, he has offered HK$5,000 in consumption coupons, to be handed out electronically in instalments, to each Hong Kong permanent resident. The coupons will be subject to restrictions, including the requirement that eligible residents must be living in Hong Kong. 
Our live blog below captures the latest announcements.
Reporting by Denise Tsang, Tony Cheung, Jeffie Lam, Joyce Ng, Kanis Leung, Elizabeth Cheung and Ng Kang-chung.
 



Hong Kong budget 2021-22: HK$5,000 vouchers, fewer sweeteners and a five-year deficit, but still an upbeat 5.5 per cent growth forecast 

Paul Chan gives his budget address on Wednesday.

Hong Kong budget: more than 250,000 jobless workers to be offered 1 per cent interest loans in unprecedented measure

Hong Kong finance minister banking on green shoots of economic recovery lying in environment, sustainable development, says source

News

Hong Kong

Hong Kong economy

Borrowers will get the interest they paid back if the loan is repaid on time. Photo: Shutterstock

Interview with Financial Secretary Paul Chan Mo-po at the Central Government Offices in Tamar. 11JUN20 SCMP / Nora Tam

Pedestrians in face masks are seen crossing the road in Central. 29JUN20 SCMP / Winson Wong

Proceeds raised from Hong Kong’s green bonds will be used to finance public works projects. Photo: Reuters

Commuters wearing facemasks walk in an MTR underground metro station amid the Covid-19 coronavirus pandemic in Hong Kong on November 25, 2020. (Photo by Anthony WALLACE / AFP)

Quietness is observed around Central Government Offices (CGO) in Tamar as civil servants are allowed to work from home starting from today under tightened social-distancing restrictions to battle the fourth wave of Covid-19 pandemic.02DEC20 SCMP / Nora Tam

Financial Secretary Paul Chan’s green theme extends to the colour of the cover on his budget this year. Photo: Handout


Gross domestic product forecast to rise between 3.5 per cent and 5.5 per cent, and sweeteners in the form of HK$5,000 coupons to be given to residents and new immigrants. 
Paul Chan's 2021-22 budget delivered on Wednesday amid shrinking economy, record deficit and rising unemployment brought about by health crisis



Gross domestic product forecast to rise between 3.5 per cent and 5.5 per cent, and sweeteners in the form of HK$5,000 coupons to be given to residents. 


Hong Kong budget 2021-2022

Live

The centrepiece of last year's budget was a HK$10,000 cash handout for every Hong Kong permanent resident aged 18 and over. But Chan earlier tempered expectations of a repeat this time around given the constraints on public finances brought about high levels of spending on pandemic relief.
The city’s record budget deficit has been estimated at HK$300 billion for the 2020-21 financial year, while the economy shrank 6.1 per cent in 2020.


Sweetener expectations lowered

Financial Secretary Paul Chan Mo-po posted a photo on Facebook on Wednesday morning, showing him fixing his green tie.
“Getting ready, prepared for a busy day,” he wrote.
He adds that he will be delivering his budget speech at 11am, followed by a press conference at 3pm, and a televised forum at 7.30pm.



Chan prepares for a ‘busy day’

Members of the League of Social Democrats and the pro-government Federation of Trade Unions protest outside the Legislative Council complex, urging the administration to hand out emergency funds to the unemployed. The league, part of the more radical segment of the opposition bloc, also demanded that the government give HK$10,000 in cash handouts to residents.




Protests at Legco, calls for HK$10,000

Paul Chan’s speech will cover measures to support enterprises and employment, ease residents’ burdens, as well as revive and stimulate the economy for a liveable city.


A preview of the speech

Chan opens his budget speech by mentioning the pandemic, saying that he will introduce counter-cyclical measures costing more than HK$120 billion to boost the economy.
“This year has [been etched into] our collective memory, and we realised that … no place can overcome the pandemic on its own,” he says.
Chan says Hong Kong is recording a 6.1 per cent economic contraction, and an unemployment rate of 7 per cent. The government has used HK$300 billion in anti-epidemic efforts.
“When the pandemic is still ongoing, our priority is to push the vaccination programme … I will allocate financial resources for this.”


Sombre start referencing Covid-19 pandemic

Hong Kong has gone through a series of tribulations over the past two years, Chan says.
“International political tensions have dampened local exports and market sentiments; violent clashes have endangered the stability and safety of our society; and the epidemic has exerted additional pressure on the whole community and economy.
“This year’s budget focuses on stabilising the economy and relieving people’s burden.
“It aims to alleviate the hardship and pressure caused by the economic downturn and the epidemic ... and seeks to create a leverage effect to benefit our people, workers as well as enterprises.”


‘Political tensions, violent clashes’

Chan says the world is focused on the foreign and economic policy directions of the new US administration.
“Their implications on US-China relations and the economies are of particular significance. The global community hopes that US-China economic and trade relations can gradually go back to normal, thereby supporting further revival of global trade and business activities.”
“However, as seen from developments in the past few years, there remain many deep-seated conflicts between the two nations. Looking ahead, ties will continue to be fraught with tensions and ongoing competition, but without a total breakdown.”
The secretary says changes in US-China relations will affect global trade, as well as the finance and political landscape, and external factors such as geopolitical situations and possible financial risks stemming from surging global public debt also warrant attention.


Spotlight on US-China ties

Hong Kong’s economic recovery depends on the extent to which the pandemic can be kept under control, Chan says.
But it will rebound in the second half of this year, growing anywhere between 3.5 per cent and 5.5 per cent this year, the minister adds.


Economy to grow by up to 5.5 per cent in 2021

In a brochure obtained by the Post, it is revealed that the scale of sweeteners rolled out by the government has dropped this year. There will only be an extra half-month allowance of standard Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance - down from an extra one month last year.



Not as sweet

In a bid to help businesses hit hard by the pandemic, Chan also announces plan to waive business registration fees for 2021-22 and 75 per cent of water and sewage charges payable by non-domestic households for eight months from April, subject to a monthly ceiling of HK$20,000 and $12,500 respectively per household.


Business fees and domestic bills cut

Hong Kong is to play an active role in the development of the Greater Bay Area economic zone and the national policy of stimulating internal consumption, according to Chan.
Between 2022 and 2025, the city’s economy will grow at an average 3.3 per cent annually.


City’s active role in China’s internal economy

Chan says there will be concessions on rates for non‑domestic properties for four quarters of 2021‑22, subject to a ceiling of HK$5,000 per quarter in the first two quarters and a ceiling of HK$2,000 per quarter in the remaining two quarters for each rateable property. This proposal is estimated to involve 420,000 non‑domestic properties and reduce government revenue by HK$3.4 billion, the secretary adds.


Concessions on rates for non‑domestic properties

To boost employment, the government will spend HK$6.6 billion creating 30,000 time-limited jobs for a period 12 months. This follows last year’s creation of 31,000 similar jobs in the private and public sectors.


HK$6.6 billion on 30,000 jobs

Enterprises will benefit from a package of measures worth about HK$9.5 billion in total, Chan reveals.
That includes reducing profits tax for the year of assessment in 2020-21 by 100 per cent, subject to a ceiling of HK$10,000, benefitting 128,000 businesses and reducing government revenue by H$1,050 million.   


HK$9.5 billion package for enterprises

Unemployed Hongkongers will be offered virtually interest-free loans – capped at a level of six times of an applicant’s previous average salary, or HK$80,000, whichever lower.
HK$15 billion would be set aside for the loans under the one-off scheme fully guaranteed by the government. Individuals who can prove to a bank they have been unemployed for months can apply for a loan at an annual interest rate of 1 per cent. Eligible freelancers can also benefit. 
Applicants can just repay their interest rate rather than the principal amount in the first year. Those who repay the money on time within the next five years will get the interest back at the end.


Virtually interest-free loans on offer

Chan says there will be a ramping up of surveillance and testing efforts, which can currently test about 100,000 people per day. 
The government will also seek this month funding of HK$1 billion for a vaccination indemnity fund from the Legislative Council’s Finance Committee.


Fighting the Covid-19 crisis

The finance minister reveals a five-pronged strategy for easing the hardships facing Hongkongers.
There will be a reduction of salaries tax and tax under personal assessment for the year 2020/21 by 100 per cent, subject to a ceiling of HK$10,000.
This will benefit 1.87 million taxpayers and reduce government revenue by HK$11.4 billion, he says.   


Tax cut as Chan targets hardship relief

Every Hong Kong permanent resident aged 18 or above “and new arrivals”, will receive HK$5,000 in consumption coupons in instalments. This will be disbursed electronically. The move will benefit 7.2 million people and cost HK$36 billion, Chan says, confirming a Post report. It is believed that the term “new arrivals” refers to new immigrants. 


Residents to get HK$5,000 in consumption coupons

There will also be a rates concession for domestic properties over the four quarters of 2021-22, under the five-pronged plan. 
That is subject to a ceiling of HK$1,500 per quarter in the first two quarters, falling to HK$1,000 per quarter in the remaining two quarters for each rateable property. 
The proposal is estimated to involve 2.95 million domestic properties and reduce government revenue by HK$11.6 billion, he adds.
Each residential electricity account will be granted a subsidy of HK$1,000.
Costing the public purse about HK$2.8 billion, it is designed to benefit over 2.7 million eligible residential households, Chan says.
The rating system will be reviewed for the introduction of a “progressive element”, and for consideration on rates concession for owner-occupied properties on a regular basis.
The government will consider shifting the primary liability for rates payment from the occupier to the owner of a property to reflect that the ultimate responsibility for a property should rest with its owner. There will be a consultation with lawmakers on how to carry the review forward.


Rates concession for homes

Under the five-pronged plan, an allowance will be offered to eligible social security recipients.
It will be the cash equivalent of half a month of the standard rates for Comprehensive Social Security Assistance (CSSA), Old Age Allowance, Old Age Living Allowance or Disability Allowance, and involves spending an extra HK$2.4 billion.
Similar arrangements will apply to recipients of the Working Family Allowance and Individual-based Work Incentive Transport Subsidy, with additional expenditure of HK$121 million, he says.
Finally, the government will pay the examination fees for school candidates sitting for the 2022 Hong Kong Diploma of Secondary Education Examination. This will cost HK$150 million, he adds.


Allowance for social security recipients

To improve the living environment in old buildings, HK$1 billion will be set aside to subsidise property owners of old buildings to carry out drainage pipe repair works.


HK$1 billion for old buildings

To develop sustainable financial services, Chan says Hong Kong will leverage on the city’s status as a global financial centre to become a green finance trade hub. The city will expand the issuing of green bonds to HK$200 billion, from HK$100 billion.


City to double green bonds to HK$200 billion

There will be enhancements in the system of government-guaranteed loans for small- and medium-sized enterprises, Chan says.
The application period initially ending in April will be extended to the end of this year. 
Under the programme, the borrowing limit for businesses would be raised from HK$5 million to HK$6 million, and the maximum repayment period increased from five to eight years. 
Chan says he will waive business registration fees for 2021-2022, covering 1.5 million business operators, which will reduce government revenue by HK$3 billion. 
Tenants in government properties would receive a 75 per cent rent reduction for six months from April.
Those tenants forced to close at the request of the government would receive a full rental waiver for the duration of the closure.


Extension for government-backed loans

The finance chief says Hong Kong will actively pursue joining the Regional Comprehensive Economic Partnership, a trade alliance of 15 Asia-Pacific nations.


Hong Kong to bid for Asia trade alliance membership

More than HK$900 million will be allocated to the hard-hit tourism industry, of which HK$169 million will be used on cultural, heritage and creative tourism projects. Facilities on hiking trails will be improved. 
HK$765 million will also be earmarked for the Hong Kong Tourism Board to revive the sector. 
The government will consider relaxing restrictions on group gatherings to allow local tours to operate again.


Lifeline for tourism, group tours

To give travel a fillip, the government will discuss and work out arrangements for air travel bubbles with “places that have close economic and trade relations with Hong Kong and where the epidemic situation is relatively stable”, Chan says. Hong Kong is reported to be currently in talks with Singapore about opening one such travel bubble but Chan’s announcement suggests more cities could be considered for similar arrangements.


Travel bubble plans in the pipeline

“Over the past two years, Hong Kong has been affected by the deterioration of the China-US relations, and experienced the blow from the social incidents and the ravages of the pandemic,” Chan says.
“However, we should not let these challenges weaken our confidence in the future.
“Instead, we should learn from the experience and make correct assessment of the major development trends.”


Hong Kong must learn from ‘social incidents, pandemic ravages’

Another HK$1.5 billion will be pumped into at dedicated fund that supports businesses with branding, upgrading and domestic sales.
The scheme will help companies develop their markets in 37 economies, up from 20, as it expands its coverage to include investment promotion and protection agreements.
The funding ceiling for each enterprise will be increased from HK$4 million to HK$6 million.


Help for firms selling abroad

The Greater Bay Area project, the national scheme to integrate Hong Kong, Macau and nine Guangdong cities into an economic powerhouse, is the best entry point for Hong Kong to participate in the domestic mainland Chinese market, Chan says.
“Be it for the mutual market access for financial services and products, cooperation and collaboration in respect of innovation and technology, or people staying and living across the boundary, continued innovation in institutional and policy arrangements is needed so as to ensure a smoother two-way flow of funds, people and factors of production.”


Greater Bay Area is main route to mainland market: Chan

Hong Kong and mainland authorities will seek to allow this year the transborder trading of bonds.
Meanwhile, to further develop the city’s market, the government will issue HK$24 billion silver bonds catered to elderly investors. The eligible age for subscribing to silver bonds will be lowered from 65 to 60.
The government will also issue least HK$15 billion inflation-linked iBonds.


Authorities seek transborder bond trading this year

To boost digital infrastructure, the government will press ahead with fifth-generation (5G) telecommunications by supporting the development of networks and applications, releasing more 5G spectrums in different frequency bands and facilitating the setup of radio base stations. The government will relocate satellite stations in Tai Po and provide land at Chung Hom Kok Teleport for the development of infrastructure for external telecommunications facilities.


Digital boost with 5G focus

The first 20 laboratories, formed under the InnoHK Research Clusters for health technologies and artificial intelligence, located at the Hong Kong Science Park in Sha Tin, will begin operations in the first quarter of this year, Chan announces. 
He also says HK$4.8 billion will be injected to the Innovation and Technology Fund annually in the coming two years to support the 17 schemes it backs and the work of over 50 research and development laboratories.
InnoCell, a smart living and co-creation space next to the Science Park, was completed last year and could provide around 500 residential spaces for research personnel at the park. Leasing activities would commence and a trial run held in the first half of this year, Chan adds.   


20 tech and AI laboratories to launch

Chan says it is projected that there will be an increasingly keen regional demand for air cargo services.  
“Last year, Hong Kong International Airport handled 4.5 million tonnes of cargo and air mail, down by only 7 per cent from pre-epidemic level,” he notes.
“With the expansion of the existing express air cargo terminal, and the commissioning of a new premium logistics centre as well as the Three Runway System, HKIA’s annual cargo handling capacity is expected to increase from 7.4 million tonnes to some 9 million tonnes in 2024.”


Air cargo handling set to hit 9 million tonnes

Low-income families gather at the Society for Community Organisation’s Sham Shui Po office to watch the budget address. Photo: K. Y. Cheng




All eyes on budget address

An additional HK$1 billion will be pumped into the CreateSmart Initiative to drive the development of creative industries. 
About HK$900 million will be earmarked to upgrade some cultural facilities in the city, including Tsuen Wan Public Library, Tai Po Civic Centre as well as Sai Wan Ho Civic Centre. The government will seek funding approval in this legislative session and some 210 jobs are expected to be created.


HK$1 billion to be pumped into creative sector

Chan says the health crisis has accelerated the digital transformation of the Hong Kong financial market.  
“On top of many Fintech start-ups, there are eight virtual banks, four virtual insurers, and a virtual asset trading platform having been authorised to operate in Hong Kong,” he adds.
“With a view to fostering the development of more novel financial products, the [Hong Kong Science and Technology Parks Corporation] and Cyberport will collaborate with the [Hong Kong Monetary Authority] to attract more financial, technology or research institutes to set up laboratories in Hong Kong.”


Pandemic speeds up financial digitalisation

To generate economic growth, city spending on annual capital works will amount to HK$100 billion over the coming years.
Total annual construction output will jump to about HK$300 billion, with the creation of about 300,000 jobs.


300,000 jobs created from construction boost

The land sales programme this year will cover 15 residential sites, yielding a total of 6,000 flats. This is 1,500 flats fewer than last year. Along with redevelopment projects and sites along railway lines, the potential supply of private housing land has a yield of 16,500 homes.
Only three commercial sites will be made available for sale, yielding 480,000 square metres in total, down from six sites last year.
To help overcome the shortage of housing land, Chan says five commercial lots in Kowloon East will be rezoned to supply 5,800 private homes.


Land sales down, but five Kowloon East lots to be rezoned

To relieve the city’s traffic congestion, Chan suggests raising the rate for the first registration tax for private cars by 15 per cent, and increasing the vehicle licence fee by 30 per cent. The adjustments will take place on Wednesday. But other types of vehicles will not be affected. 
The maximum concession for the first registration tax for electric private cars under the “one-for-one replacement” scheme will be increased to HK$287,500. 
The Transport Department will continue studies on “congestion charging” and the electronic road pricing pilot scheme in Central.


Measures to tackle traffic congestion

The city’s climate action plan will be updated in the middle of this year as part of the effort to achieve carbon neutrality by 2050.
The Environment Bureau will also lay out next month a plan to widen the use of electronic vehicles.
Some of the key measures include ending the new registration of fuel-operated private cars from 2035 or earlier.


Climate strategy to be updated

Chan warns that Hong Kong will suffer an annual budget deficit in each of the next few years due to rising recurring expenses and one-off anti-pandemic measures.
The deficit will hit HK$140 billion in the next financial year, and range from HK$22.4 billion to HK$40.7 billion in the following four years.
“Hong Kong will record a deficit for a number of years after achieving a surplus for 15 years,” Chan says.
Based on the revenue, expenditure and financial position of the government, the city’s gross domestic product is expected to grow 3.3 per cent annually between 2022-23 and 2025-26.
The growth forecast is even more optimistic than the average 3 per cent the previous administration made for the years before 2017.


Hong Kong to record deficits ‘for a number of years’

The Hospital Authority will review the design of individual hospitals under two existing 10-year redevelopment plans after taking into account the experiences of combating Covid-19.
Two or three general wards at each specific hospital will be reserved for conversion into isolation wards where necessary.
Additional recurrent funding of about HK$147 million will be earmarked for psychiatric services at public hospitals. 
Meanwhile, the district health centres in Sham Shui Po and Wong Tai Sin, part of the effort to push for primary healthcare development in the city, will begin operations within the next two years.
District health express stations, which provide such services on a smaller scale, will also commence operation in the other 11 districts this year.


Hospital design review to learn from Covid-19 crisis

To raise revenues, the government will increase the stamp duty levied on stock trading to 0.13 per cent from the existing 0.10 per cent. 
Each buyer and seller of a stock will be subject to the levy.
The government forecasts the measure will bring in HK$12 billion in revenue during its first year of operation.


Stamp duty increased for stock trading

An extra 1,500 subsidised places for the elderly to receive care services in their own homes will be provided this year. Sixty-six new projects, providing about 8,800 residential and 2,800 day care places, will be taken forward in the coming few years. 
The number of places for on-site rehabilitation services for pre-schoolers will also be increased from 8,000 in the current school year to 10,000 in 2022-23.


More care support for the elderly

The deficit for 2020-21 has been revised to HK$257.6 billion, about 15 per cent lower than Chan’s previous estimate of HK$300 billion. The latest figure is still a record. 
The fiscal reserves are expected to drift lower to HK$902.7 billion by the end of March, from about HK$1 trillion a year ago.
In light of this, the government will seek fresh revenue while maintaining regular spending on the medical, education and social welfare sectors, at HK$302.3 billion - 58 per cent of total expenditure. Chan says the accumulative increase in spending of the three areas was 53 per cent over the past five years.
Maintaining those levels of spending will shrink fiscal reserves to HK$775.8 billion by the end of March 2026, equivalent to 22 per cent of GDP, or a year of government spending. This is compared with the latest estimate of 13 months of the government expenditure in 2020-2021.   


Deficit revised to HK$257.6 billion from HK$300 billion

There will be zero growth in the number of Hong Kong civil servants in 2021-22, Chan says.
All bureaus and departments will be required to reduce expenditure without affecting livelihood-related spending.
The target is to trim recurrent spending by 1 per cent in 2022-23, with the savings estimated at about HK$3.9 billion. 
While 1 per cent may seem not too difficult, Chan says, he notes there is limited scope for curbing expenses relating to salaries and other personal emoluments, which account for 60 per cent of government departments’ day-to-day spending.
“We can only achieve the target mainly through savings from the remaining 40 per cent of recurrent expenditure, including major items such as general expenses and subventions,” he says.


Government bureaus to cut spending 

The estimate for government revenue on the back of its 2020-21 financial performance is revised to HK$543.5 billion, with expenditure at HK$820.4 billion. 
The revenue figure is substantially lower than the original estimate due to a deferment of the sale of a high-value commercial site. This is despite higher salaries tax and stamp duty revenue.
Expenditure was higher than previously thought because of the billions spent on Covid-19 relief measures, even with reduced public works spending.


Revenue revised to HK$543.5 billion, much lower than previous estimate

In an emotional closing to his two-hour speech, Chan says Hong Kong has suffered successive setbacks in the past two years. 
“Life has not been easy for us all ... I know how difficult it is to earn a living during the economic downturn.
“I feel their pain. This is why, despite a record-high fiscal deficit in 2020-21, I once again propose a budget involving a deficit of over HK$100 billion,” he says.
“In spite of the pressure we now face, looking back, we have walked all the way through thick and thin. However harsh life may have been, Hong Kong remains the home that we treasure.”
Concluding his final remarks, Chan says: “Home is not where we find perfection. It is where we stay together as a family, sharing mutual care, acceptance and support.
“This unprecedented pandemic reminds us that we are all in the same boat.
“Deep-seated conflicts cannot be resolved instantly, nor can wounds be healed overnight. Given time, even the tightest knot can be untied,” he adds.
Chan also says that while the economy may move in a cycle, there is always a way to prosperity.
“We have overcome many challenges and always come out stronger. Let us be steadfast and ride out the storm. Together we will build a better Hong Kong,” he concludes.


‘Let us be steadfast and ride out the storm’

The Federation of Public Housing Estates says the budget fails to continue the relief measures launched last year.
The organisation says it is “extremely disappointed” with the cancellation of the one-month rental waiver for public housing tenants. 
But it welcomes the 75 per cent reduction of business rents for tenants in government properties, the HK$5,000 spending coupons for permanent residents and new immigrants, and the move to consider rezoning five commercial lots in Kowloon East.   


Public housing federation ‘extremely disappointed’

In the budget address appendix, which was not read by Paul Chan, it is stated that HK$8 billion will be allocated to the protection of national security.
The appendix states the amount will be a “non-recurrent appropriation to a special fund to meet the expenditure for safeguarding national security”.
It also specifies that the national security law, imposed by Beijing last June, stipulates that the financial secretary shall appropriate such a fund for national security protection. Under the law, the secretary is also responsible for approving relevant posts for this purpose.


HK$8 billion for protection of national security

Chief Secretary Matthew Cheung Kin-chung says the budget offers relief to residents during “a very difficult and challenging time”.
“With the HK$5,000 consumption vouchers that benefit each of the Hong Kong residents, we hope to energise the local market,” the No 2 official says.


Coupons to ‘energise local market’

Executive Council convenor Bernard Chan backs the budget on behalf of the de facto cabinet’s non-official members, saying it addresses the needs of different groups in society. 
He agrees it is the right time to discuss the feasibility of broadening the tax base amid the ballooning deficit.
“Though I know it’s a sensitive issue as we still have a long path to economic recovery, society needs to kickstart a discussion to prevent from running a deficit in the long run,” he says.


‘Right time’ to launch tax reform discussion

Regina Ip Lau Suk-yee, chairwoman of the pro-establishment New People’s Party, says her party is disappointed at the reduction in sweeteners for the city’s middle class.
She welcomes the introduction of vouchers but calls for them to benefit smaller scale businesses rather than large enterprises.
“Service sectors should also be allowed to accept the digital vouchers, as they are among the hardest hit during the epidemic,” the party’s lawmaker Eunice Yung Hoi-yan says.


Vouchers should benefit smaller businesses, party says

Liberal Party chairman Tommy Cheung Yu-yan says he welcomes the government adopting the pro-business group’s suggestion to give out digital vouchers.
“It’s now the best timing to launch it as it will also encourage wet markets and small businesses to ditch cash and switch to digital payment, so as to minimise physical contact during Covid-19,” he says.
But the party is disappointed that Chan did not offer a third round of its Employment Support Scheme, which when previously introduced aimed to save jobs by subsidising the wage bills of employers. 


‘Where’s the third round of wage subsidies?’ 

Giving a press conference at the government’s headquarters, Chan says the HK$8 billion allocated for protecting national security will be spent over the next few years.
“Such allocation of funding is stated in the national security law. As for further details, we will brief Legco,” the finance chief adds.
The law Beijing imposed on the city last June bans acts of subversion, secession, terrorism and collusion with foreign forces. 
Chan says the chief executive was involved and approved the funding for the legislation. He does not go into details but reiterates that the government will report to Legco every year on the use of the fund.

Photo: Sam Tsang


Paul Chan speaks to the media

A reporter asks Chan if his stamp duty increase on stock transfers is worth the impact it could have on Hong Kong’s international reputation. 
Chan says transaction cost is only one consideration when assessing whether a stock market is attractive.
Connectivity with other bourses is also a factor, and the Hong Kong stock exchange has boosted its links with mainland ones in recent years, he adds.


Finance chief quizzed on stamp duty increase

A reporter asks Chan if Hongkongers overseas can benefit from the electronic voucher, referring to the HK$5,000 in spending coupons to be given to permanent residents.
Chan says: “The vouchers are for local consumption, we can allow them to be used for online shopping. But not for online shopping abroad.”
Answering further questions on the matter, Chan says the government will discuss the plan with relevant operators, and aim to roll out the scheme by summer. He adds that it will be most effective if the vouchers are issued in instalments and used within a set time frame.  
As for small shops or retailers which do not have electronic payment mechanisms, Chan says the government will identify suitable stored-value service providers to roll out the scheme.  


‘Not for online shopping abroad’

At the press conference, Permanent Secretary for Financial Services and the Treasury Alice Lau says the government’s expenditure reduction programme, aimed to cut recurrent spending by 1 per cent in 2022-23, will not affect public services.


Programme to cut spending ‘won’t affect public services’

A Post reporter asks Chan why the government did not set up an emergency fund to distribute cash to the unemployed.
The minister says the government decided instead to offer those out of work personal loans worth up to six times their previous monthly salary, or a maximum of HK$80,000.
The loans under the “Special 100% Loan Guarantee for Individuals Scheme” are also available to freelancers, he adds.


Support for the unemployed

A reporter asks Chan why the government opted for electronic vouchers, and not cash handouts. Chan says previous handout schemes were aimed at quick implementation, but the electronic voucher is targeted at boosting local consumption. 


Live | Hong Kong budget 2021-22: HK$5,000 vouchers, fewer sweeteners and a five-year deficit, but still an upbeat 5.5 per cent growth forecast