Financial Secretary Paul Chan Mo-po has said Hong Kong is forecast to enjoy a HK$92.8 billion surplus for the year 2016-17 – much higher than the estimate given last year.
In his first budget, Chan said that the main reasons for the increase were revenue in land sales and stamp duty. The 2016-17 revised estimate on government revenue was HK$559.5 billion – 12 per cent, or HK$61.3 billion higher, than the original estimate.
Land sales revenue was HK$50.8 billion – or 76 per cent higher than original estimate. Chan said it showed that “land revenue has always been highly volatile and vulnerable to market fluctuations.”
Stamp duty revenue is set to be HK$8 billion – 16 per cent higher than expected, which Chan said was a result of “a period of hectic trading in the property market last year.”
He forecast a revised estimate of HK$466.7 billion in government expenditure for the year – 4.1 per cent or HK$20.2 billion lower than the original estimate. This was mainly due to a HK$10 billion sum being set aside for the Hospital Authority Public-Private Partnership Fund in the original estimate being advanced and allocated in 2015-16.
Chan said fiscal reserves was expected to reach $935.7 billion by end of March.
Chan proposed new measures to spend some of the extra surplus such as reducing salaries tax, tax under personal assessment and profits tax for 2016-17 by 75 per cent, subject to a ceiling of HK$20,000.
Rates will be waived for four quarters of 2017-18, subject to a ceiling of HK$1,000 per quarter for each rateable property.
An extra one month of allowance will be provided to recipients of Comprehensive Social Security Assistance payments, Old Age Allowance, OALA or Disability Allowance.
Recurrent measures included raising tax allowance for dependent disabled persons and siblings, the deduction ceiling for self-education expenses, among others.
Marginal bands for salaries tax will be widened from the current HK$40,000 to HK$45,000. This measure will reduce the tax burden of 1.3 million taxpayers and reduce tax revenue by HK$1.5 billion a year.
Billions of dollars worth of long term investments will be saved, or earmarked for services for persons with disabilities, sports, IT and youth development.
Meanwhile, pro-democracy lawmaker Leung Kwok-hung was ejected from the Legislative Council chamber in the middle of the budget address, after throwing paper-made “white elephants” at Chan when he spoke about poverty alleviation and support for the elderly.
“You’re not qualified to talk about a universal pension plan!” he shouted.
“White elephants” refer to the government’s costly infrastructure projects in recent years, such as the high-speed railway and bridge across the Pearl River Delta linking Hong Kong and mainland China.