HONG KONG – Hong Kong's Financial Secretary Paul Chan announced Thursday a host of measures to the tune of HK$19.1 billion as he made a downward revision to the city's full-year growth rate to between 0 and 1 percent, citing economic doldrums, and warned of a technical recession. The city's full year GDP was earlier forecast to range between 2 and 3 percent.
During an evening press conference at the Central Government Offices, Chan unveiled measures focused on improving the lot of the people as well as specific measures to support small and medium enterprises (SMEs) and boost employment.
"SMEs account for over 98 per cent of local enterprises and around 45 per cent of total employment, and are the cornerstone of our economy," said Chan.
In measures aimed at helping enterprises weather the slump, the government has waived 27 groups of government fees and charges; reduced rents for most short-term tenancies of government land for community and business use; implemented a fee review moratorium on government fee and charges; and made further allocations for two government funds on branding, upgrading, domestic sales, and export marketing.
In addition, the finance secretary introduced a new loan guarantee product under the SME Financing Guarantee Scheme (SFGS), under which the government will provide for a 90 per cent guarantee for approved loans for SMEs. The government also proposes to launch small-scale projects in order to generate construction jobs as well as support retraining for workers affected by the downturn.
In a move seen to be widely welcome, Chan also proposed to widen salaries tax reduction from 75 percent to 100 percent, benefiting 1.43 million taxpayers. This apart, his measures to benefit resident include extra payment to social security recipients, subsidy for kindergarten, primary and secondary students, waiver of a month’s rent for lower income tenants of government housing, and a one-off electricity charge subsidy worth HK$2,000.
Chan said the subsidy of HK$2,500 to each kindergarten, primary and secondary school student would benefit 900,000 and cost the exchequer HK$2.3 billion. He said HK$5.6 billion had been set aside for the electricity subsidy.
Chan also said the Community Care Fund would consider providing a one-off living subsidy for low-income households.
This apart, Chan said, Hong Kong Housing Authority, Airport Authority Hong Kong, Construction Industry Council, Hong Kong Science and Technology Parks Corporation as well as the Cyberport are also formulating relief proposals which will be announced shortly.
He, however, pointed out that many of these measures would not be rolled out immediately as some needed Legislative Council approval.
Underscoring the uncertainties stemming from a worsening global economic outlook, increased China-US trade tensions, the risk of a no-deal Brexit and sluggish industrial and trading activities in Asia, Chan warned, “If Hong Kong’s economy grows in the third quarter at a similar pace to the second, the city will be technically in a recession.”
He said the raft of measures announced on Thursday was aimed to boost the economy by 0.3 percent. "The package of helping measures to support enterprises and relieve people’s financial burden, excluding public works expenses, will cost a total of about HK$19.1 billion," said Chan.
"Together with one-off relief measures announced in the 2019-20 Budget, which cost HK$42.9 billion, they will provide impetus for our economy and help cushion the enterprises and people of Hong Kong against challenges arising from economic uncertainties," Chan said.
In a statement issued shortly after the government announcement, the Chinese General Chamber of Commerce said it welcomed the measures, which it believed will have a positive effect on social stability and harmony.
China Daily
