In his Budget delivered yesterday, Hong Kong's Financial Secretary John Tsang pledged to explore new ideas and strive for diversity to help Hong Kong people realise their aspirations.
"In
particular, I shall make the best use of resources generated by the
community's efforts, and continue to care for the disadvantaged and
promote sustainable development, so that people from different sectors,
as well as our next generations, can share the benefits of economic
growth," the Financial Secretary said.
Measures targeting the cultural and creative sector include:
*
Injecting an additional HK$400 million into the CreateSmart Initiative to
support different sectors and provide talented people with training
programmes, as well as overseas exchanges and internships. "Efforts will be made to assist them to participate in and organise
exhibitions and fairs, provide talented people with training programmes
and subsidised overseas exchanges and internships so as to afford them
opportunities to realise their potential," Tsang explained.
*
Launching a HK$500 million, three-year pilot programme for Hong Kong's
fashion industry. Making use of existing and new resources, the
programme will promote fashion designers and brands, create an
incubation programme for design startups and provide fashion design
graduates with overseas internships and study opportunities;
*
Initiating a HK$300 million Art Development Matching Grants Pilot Scheme,
under which private donations and sponsorship secured by eligible local
arts groups will be matched by government grants; and
* Adding HK$200 million to the Film Development Fund and introducing a subsidy
scheme for film productions with a budget not exceeding HK$10 million, to
boost the volume of local film production and nurture film talent. The
production budget ceiling of the Scheme for Financing Film Production
will be raised as well, from HK$15 million to HK$25 million. The Government
will also relaunch the First Feature Film Initiative, with increased
subsidies for production costs.
Tsang said that
startups developed by the Hong Kong Science and Technology Parks
Corporation (HKSTPC) and Cyberport had attracted hundreds of millions of
dollars in investment.
To further promote the financing of
new enterprises, Mr Tsang said that the HKSTPC would earmark HK$50 million
to set up a corporate venture fund on a matching basis with private
funds. The money would be invested in startups that were either located
in the Science Park or had participated in one of its incubation
programmes.
Tsang also earmarked HK$150 million for a new
phase of the Enhancing Self-Reliance Through District Partnership
Programme, covering 2016-17 to 2019-20.
He said the money
would be used to encourage commercial sector participation in social
enterprises and promote a greater variety of social enterprises. "Social enterprises are gaining recognition in Hong Kong. With business
models that balance economic and other social values, they mark the
maturing of our society. Research showed that each dollar of public
funding contributed four to seven dollars of workfare to those
disadvantaged employees, reflecting the significant benefits brought
about by social enterprises," he noted in his Budget speech.
"Since the launch of the Enhancing Self-Reliance Through District
Partnership Programme (ESR Programme) in 2006, the Home Affairs
Department has so far allocated a total of HK$180 million for the
establishment of 161 social enterprises, which created 2,600 job
opportunities. Eighty percent of these social enterprises have become
self-sustaining after the funding period."
Human resources development was a central aspect of the Budget. "Manpower mismatch is becoming more and more evident in Hong Kong in
recent years. This, coupled with the imminent challenge of an ageing
population, has directly hindered the sustainable economic development
of our city. We must strive to overcome the constraints on our
development potential and rise to the challenges together. Otherwise,
our next generations will have to bear the price of our
short-sightedness.," Tsang warned in his Budget speech.
Human resources initiatives in the Budget include:
* HK$100 million for a three-year pilot scheme focused on insurance and
asset and wealth-management services. In collaboration with industry,
the programme will offer internships, particularly for students, to get a
better understanding of career prospects in the two sectors. Government and industry will also enhance the content of
continuing professional development programmes, and provide financial
support to encourage practitioners to enrol in these programmes.
"Last year, I requested the Financial Services and the Treasury Bureau
(FSTB) to consult the industry on manpower training needs. There was
broad consensus that manpower shortage was particularly acute in the
insurance and the asset and wealth management sectors. They also
suggested that government could help promote the industry, enhance the
professional competence of practitioners and, in particular, train up
more talent for middle and back offices," explained Tsang in his Budget speech.
* HK$960 million for a pilot programme allowing 1,000 students per cohort to
pursue designated self-financing undergraduate programmes that reflect
Hong Kong's manpower needs. In the 2015/16 academic year, the initiative
will cover 13 programmes, ranging from healthcare to architecture and
engineering, testing and certification, the creative industries,
logistics, and tourism and hospitality;
* To expand, to 3,000,
the short-term internship places provided by government departments for
2015-16. This is an increase of 30% over the last financial
year.
* An additional $205
million over the next three years to allow more Hong Kong young people
to take part in Mainland exchange and internship programmes;
*
250 internships for university students wishing to broaden their
understanding of Association of Southeast Asian Nations (ASEAN) countries, up
from 90 internships in last year's inaugural round;
* HK$23 million
over the next three years to promote Hong Kong as an intellectual
property (IP) trading hub in the region. The money will be used for
manpower training, IP consultation and other services to small and
medium enterprises;
* HK$130 million to strengthen childcare services, to help more women join the workforce;
* In addition, the
Government will extend the coverage of the on-the-job training allowance
under the Employment Programme for the Middle-aged to encourage the
employment of older persons to take up part-time jobs, and the Employees
Retraining Board will focus on providing training for older persons,
among other target groups.
Improving the environment was also high on the agenda. Environmental measures include:
*
Phasing out 82,000 Euro III, or earlier, diesel commercial vehicles by
the end of 2019. To
date, 22,000 of these vehicles have been phased out;
* Extending,
to the end of March 2018, the incentive scheme that halves the port
facilities and light dues charged on ocean-going vessels using
low-sulphur fuel while at berth in Hong Kong;
* An additional
$150 million to extend the Cleaner Production Partnership Programme by
five years. The programme helps Hong Kong-owned factories in both Hong
Kong and Guangdong reduce emissions and conserve energy.
Tsang also underlined the value of small and medium enterprises (SMEs) to Hong Kong's economy.
"Our external trade performance will be affected by a host of
uncertainties this year. It can hardly drive our economic growth. As
such, we shall need to rely on domestic demand for maintaining economic vibrancy and preserving employment. There are 320,000 small and medium
enterprises (SMEs) in Hong Kong, accounting for 98% of the total
local enterprises and employing 50% of the private sector
workforce. This underscores SMEs' role as the mainstay of our economy," he said in his Budget speech.
The government will inject HK$1.5 billion into the SME Export Marketing and
Development Funds and increase the maximum amount of funding support for
each project under the SME Development Fund from HK$2 million to HK$5
million.
The scope of the SME Export Marketing Fund will also be expanded, Tsang said. He announced HK$180 million in targeted, short-term measures to help sectors adversely affected by the occupy movement:
* Waiving license fees of 1,800 travel agents for six months;
* Waiving licence fees of 2,000 hotels and guesthouses for six months;
*
Waiving licence fees of restaurants and hawkers, and the fees for
restricted food permits, for six months to benefit 26,000 restaurants
and operators; and
* Waiving vehicle examination fees for the
renewal of licences once within one year for taxis, light buses,
franchised and non-franchised buses, goods vehicles, trailers and
special-purpose vehicles.
The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) continues to make progress. "Up till now we have issued 3,000 Certificates of Hong Kong Service Supplier and thousands of Hong Kong residents have set up individually-owned stores in the Mainland in accordance with the preferential treatment under CEPA," Tsang noted.
"At the end of last year, I signed a new agreement with the Ministry of Commerce to promote liberalisation of trade in services between Hong Kong and Guangdong. After the agreement comes into effect, Guangdong will open up 153 services trade sub-sectors to Hong Kong service suppliers, accounting for 95.6% of all trade sub-sectors under the WTO's classification system. I hope the Mainland will further deepen the liberalisation measures on this basis and extend them nationwide, thereby achieving basic liberalisation of trade in services between the entire Mainland and Hong Kong by the end of this year."
Hong Kong is also focused on intellectual property trading, with HK$23 million in the coming three years earmarked by the government for offering IP consultation, manpower training and other services to SMEs. "As regards tax deduction for capital expenditure incurred on the purchase of IP rights, I shall consider extending the scope to cover more types of IP rights as appropriate," he said.
Proposed tax measures included a 75% reduction of profits tax and salaries tax for the year of
assessment 2014-15, subject to a ceiling of HK$20,000 per case.
"I think we need to inject some funding to help improve the business
sentiment as well as the perception people have overseas about Hong
Kong, because we are an externally oriented economy and what concerns
international investors, what concerns overseas tourists, are big
concerns to us and I think we need to remedy the situation," Tsang shared in a press conference on the Budget.
CY Leung, Chief Executive of Hong Kong cautioned that some people may have underestimated the importance of economic growth. Commenting on the Budget in a statement he said, "This calls for vigilance. Faced with an economic slowdown in the
Mainland and uncertainties in economies worldwide, we should remain
careful."
Leung also asked employers to "improve the pay conditions of their employees whenever possible to share the prosperity."
