The Hong Kong government announced a series of relief measures on Thursday that totalled more than HK$19 billion, with policies targeting small and medium enterprises, students and low-income families.
Financial Secretary Paul Chan said that the policies are expected to boost the economy by 0.3 per cent. He also cut Hong Kong’s real growth forecast this year to zero to one per cent, citing “significant downward pressure” and a worsening global economic outlook.
Tax cuts previously announced for this year’s budget will be beefed up: salaries tax, tax under personal assessment and profits tax for 2018-19 will be reduced by up to 100 per cent, with a ceiling of HK$20,000. Chan estimated that 1.43 million taxpayers will benefit from the measures, which will cost the government HK$1.84 billion.
The government will also provide one extra months’ payments to social welfare recipients, as well as those receiving the Old Age Allowance, Old Age Living Allowance and the disability allowance.
Students in kindergarten, primary school and secondary school will each receive a HK$2,500 subsidy.
Households will receive a one-time HK$2,000 subsidy for their electricity bill, and lower-income tenants living in public housing will have their rents waived for one month.
Chan added that the Community Care Fund was in the process of developing one-off subsidies for low-income families not currently benefiting from the government’s welfare policies – also known as the “N-nothing” demographic.
The government also announced that 27 types of fees and charges would be waived, among a set of measures aimed at benefitting small and medium enterprises.
‘Not related to politics’
Appearing before the press with four other top ministers, Chan did not mention the ongoing anti-extradition bill protests in his announcement, saying that the relief measures announced on Thursday were purely economic.
“Are the relief measures meant as a response to the political pressures brought by the anti-extradition bill protests? I can clearly tell everyone that the two are unrelated,” he said.
“The measures were designed based on our assessment of the economy, and as a safeguard against future economic situations.”
However, pro-democracy lawmaker Helena Wong said that the government was trying to change the focus and sidestep the current political crisis by giving handouts.
Democratic Party lawmaker Lam Cheuk-ting said that the main reason behind the faltering confidence in Hong Kong’s economy was political in nature, and that the economy will only grow if the government becomes accountable.
Some of the newly announced relief measures will require approval from the legislature, while measures that are administrative in nature – such as the rent reduction – could be implemented as early as October.
Asked why he did not implement a HK$8,000 cash handout scheme, as proposed by the pro-establishment New People’s Party, the finance chief replied that the sweeteners should be more targeted in nature.