Dr Jonathan CHOI Koon-shum (Chairman of the 51st terms of office) March 2020
The HKSAR government’s decisive implementation of large-scale relief measures will help mitigate the challenges brought by the external environment. In the long run, it is imperative to maintain a balance between income and expenditure and adopt a prudent financial approach.
In view of the impact of the spread of Covid-19 on Hong Kong’s economy, the HKSAR government has announced a large number of relief measures in the new Budget. We hope the government will simplify the related application and approval procedures so that the measures can be speedily implemented and that businesses and members of the public can benefit from them as soon as possible. Meanwhile, various sectors should actively coordinate efforts to support the diversified development of industries and open up growth opportunities for the economy.
Timely measures to relieve burden
The ongoing epidemic has dealt a further blow to various sectors and the economy, which already showed signs of recession in the second half of 2019 under the impact of Sino-US trade conflicts and social incidents. An increasing number of companies have shortened their business hours or suspended operation altogether, with some asking their employees to take unpaid leave. Persistence of the situation can lead to waves of pay cuts, layoffs and business closures, and even hamper the global supply chain, as many Hong Kong businesses with factories in the Mainland have not been able to return to full production.
The Budget has earmarked HKD18.3 billion for support measures targeting businesses. Together with the relief measures launched earlier and the injection of HKD30 billion into the “Anti-epidemic Fund”, the new measures would be useful for hard-hit industries and businesses to ride out the storm. In particular, the arrangements catering for SMEs will greatly ease the pressure arising from cash flow and loans in the current harsh business climate.
We also welcome the HKD10,000 cash payout to Hong Kong permanent residents and the reduction of salaries tax and tax under personal assessment, among other measures. The authorities may also consider the distribution of consumption vouchers to the public as an effective means to stimulate domestic spending.
Strengthening epidemic prevention and healthcare services
Besides measures to stimulate the economy in the short term, the Budget has allocated significant resources to step up epidemic prevention efforts. In recent months, businesses and various sectors have also been actively sourcing surgical masks and other protective supplies. CGCC, for instance, has purchased 100,000 masks and other protective items and handed them out to senior citizens, grassroots families and other vulnerable and underprivileged members of the community. Meanwhile, CGCC has donated money to the Mainland through the Liaison Office of the Central People’s Government in the HKSAR. All in all, donation amount from various office bearers and members is over HKD20 million.
We also support the series of recommendations in the Budget aimed at enhancing healthcare services. We hope the authorities will invest resources to nurture more medical talents and study the feasibility of hiring overseas medical professionals to cope with the manpower shortage in Hong Kong.
Consolidating existing advantages and investing in the future
In addition to the short-term relief measures, we support the direction outlined in the Budget to prepare for the future, with new or optimized policies to pave the path for the diversified development of industries and to strengthen those industries that enjoy competitive advantages.
The Budget also sheds light on financial services and innovation and technology developments in the Guangdong-Hong Kong-Macao Greater Bay Area, such as the expansion of the channels for two-way RMB fund flows and the establishment of the Hong Kong-Shenzhen Innovation and Technology Park. It is hoped that the HKSAR government will actively work with Hong Kong businesses and the Mainland to facilitate the free flow of people, commodities and capital. It should also further promote Hong Kong’s vital role in investment and financing in projects under the “Belt & Road Initiative”, so as to help businesses tap into new opportunities.
To conclude, the HKSAR government’s decisive implementation of large-scale relief measures will help mitigate the challenges brought by the external environment. In the long run, it is imperative to maintain a balance between income and expenditure and adopt a prudent financial approach, while striving for public finance sustainability through innovative thinking, to ensure the stable development of the Hong Kong economy.