Measures to support pillar industries Budget praised as it strives to enhance HK’s competitiveness
The government on Wednesday delivered the 2017-18 Budget, which strives to enhance the competitiveness of pillar industries as well as to promote diversified economic development in Hong Kong.
Financial Secretary Paul Chan Mo-po, in announcing the last budget of the currentterm government, proposed a slew of measures to consolidate pillar industries.
The measures included setting up a committee on innovation, pushing technology development and reindustrialization, as well as forming a tax policy unit to better respond to the world’s everchanging economic environment and competition.
“I very much agree with the objectives and approach of public finances raised by the financial secretary in the 2017-18 Budget — to mobilize resources effectively, develop the economy and improve livelihoods to build a fair, just, caring and inclusive society,” Chief Executive Leung Chunying said in a statement.
The government predicted the economy could grow 2 to 3 percent in 2017, as risk factors in the external environment will threaten export trade in Asia and Hong Kong.
An uncertain external environment and interest rate trends might also trigger abrupt shifts in capital flows. This could heighten volatility in local asset prices and dampen consumption and investment sentiment.
According to the 2017-18 Budget, the economy expanded modestly by 1.9 percent last year, the slowest annual growth rate since 2013.
The government will record a surplus of HK$16.3 billion in the consolidated account in 2017-18. Fiscal reserves will rise to reach HK$952 billion by endMarch 2018. This is equivalent to 37 percent of GDP.
In 2016-17, the government recorded a surplus of HK$92.8 billion against the original estimate of HK$11 billion made last February.
“Pressure on government expenditure is considerably high amid an aging population, a shrinking workforce, economic volatility and the government’s long-term com- mitment,” Chan said.
“We ought to be prudent and vigilant about the sustainability of long-term development,” he cautioned.
First and foremost, the government will put up 28 residential sites for sale in 201718. Coupled with railway property development projects, Urban Renewal Authority projects, as well as private redevelopment and development projects, a potential residential housing supply of 32,000 units will be available in 2017-18.
The administration will continue to boost traditional pillar industries such as financial services, trade and logistics, inbound tourism as well as professional services. This is in order to strengthen the city’s major hub status.
To diversify the economy, the government will establish a new committee on innovation, technology development and reindustrialization to coordinate industry development.
It will also set up a tax policy unit in the Financial Services and the Treasury Bureau. This is to comprehensively examine tax issues from a macro perspective. It will take into account the need to align international standards and to broaden the tax base.
The Association of Chartered Certified Accountants said: “We believe this will help maintain the global competitiveness of Hong Kong’s tax system and ultimately advance the city’s development.”
The CPA Australia said the tax policy unit is an important step toward enhancing Hong Kong’s economic competitiveness while maintaining its mid-term fiscal stability.
I very much agree with the objectives and approach of public finances raised by the financial secretary in the 2017-18 Budget.” Leung Chun-ying, Chief Executive