Hong Kong Budget 2017-18: Winners All AroundBy and
Beneficiaries include construction sector, seniors, workers
Gross domestic product forecast to grow 2 to 3 percent in 2017
In a bid to boost growth amid sluggish retail sales, soaring property prices and the potential for further interest rate increases, Hong Kong’s Financial Secretary Paul Chan announced measures to support infrastructure, senior citizens and salaried workers.
The 2017-18 budget comes ahead of a vote next month on who will become the city’s next Chief Executive. The range of measures aim to help spur economic activity after gross domestic product growth slowed to 1.9 percent last year. The government is forecasting 2 percent to 3 percent expansion in 2017. Here are some of the biggest winners of the Hong Kong budget and the sole loser.
- Salaried workers - Salaries tax and tax under personal assessment to be reduced by up to a maximum of HK$20,000 for 2016-2017 fiscal year. This will impact 1.84 million taxpayers and cut government revenue by HK$16.4 billion ($2.1 billion).
- Construction - Government spending on capital works increases 39 percent in 2017-2018 to HK$86.8 billion from $62.4 billion in 2012-2013. The construction industry will contribute 4.7 percent to Hong Kong’s GDP according to government estimates.
- Seniors and the poor - The government is raising the Old Age Living Allowance to HK$3,435 for those eligible, while existing asset limits will also be relaxed to broaden coverage. Hong Kong has boosted social welfare spending by 71 percent over five years, to HK$73.3 billion. About 400,000 more seniors will get HK$2,000 a year for primary care services from the private sector after lowering the eligibility age for health care vouchers.
- Travel agents, Hotels, Restaurants - License fees of HK$137 million will be waived to account for “hardship” faced by the tourism industry for one year. License fees will be waived for 1,800 travel agents, over 2,000 hotels and guesthouses and fees for 27,000 restaurants and hawkers.
- Aircraft leasing companies - Government plans to introduce a bill in 2017 offering a tax concession to attract companies to develop their business in Hong Kong.
- Millennials - HK$1 billion earmarked for youth development, including funding for training and support for local post-secondary students.
- Electric cars - Waiver of first registration tax for electric private cars to be capped at HK$97,500 after current waiver program expires on March 31.