Notwithstanding objections from the Hong Kong Jockey Club, the city’s recently unveiled budget is an example of the government’s commitment to the well-being of its residents. After a trying year, with Covid-19 wreaking havoc and devastating economies worldwide, it is laudable that it has opted to prioritise stimulating consumer spending.
The budget also encompasses infrastructure plans and various social welfare projects. Balancing the budget while expanding public spending has proved challenging, as evidenced by the projected deficit of HK$139.80 billion for 2022-2023. Yet the government has adopted a prudent and responsible approach, recognising both the needs of the public and their financial circumstances.
See also: Don’t divert Hong Kong’s betting revenue from charity projects like the fire dragon dance
This year’s HK$5,000 consumer voucher is intended to encourage economic recovery as citizens are expected to spend more post-Covid. Growth is expected to be 3.5-5.5 percent in 2023, according to Financial Secretary Paul Chan, which is terrific news for all.
The voucher programme is intended to ignite a wave of consumer spending throughout the city, delivering a much-needed boost to an economy hit by the Covid-19 restrictions.
Economists generally believe that heightened consumer consumption is an effective strategy for stimulating economic activity and aiding in the recovery from a recession. Consumer spending can raise demand, which enables businesses to increase production and recruit more staff. It also has a multiplier impact for every dollar spent.
The demand that the Jockey Club contribute to the budget for 2023 and beyond is, in my opinion, legitimate. Regrettably, it responded adversely to Financial Secretary Paul Chan’s proposal, per the New People’s Party’s recommendation, for an additional HK$2.4 billion in taxes per year for the next five years – stating that any further increase in betting duty rates would destroy its business model.
“Any permanent hike in betting duty rates will create structural problems irreversibly damaging the Club’s successful integrated business model and continued competitiveness while benefiting only illegal and offshore betting operators,” the club said in a statement after Chan’s budget speech.
The Club appears oblivious to the potential benefits of this tax revenue in improving the livelihoods of the city’s people after Covid. It is abhorrent that a non-profit organisation over 100 billion Hong Kong dollars in reserves and contingency funds objected to allocating a portion of its funds for the long-term benefit of others. It is the responsibility of all parties to contribute during this turbulent economic era for Hong Kong.
The Hong Kong Jockey Club, founded in 1884, holds a notable place in the city’s history and has been upholding its social obligations and responsibilities by providing charity and donating to public services. It must now acknowledge that the welfare of the city’s residents comes first, and that if everyone plays their part, Hong Kong will weather these challenging times. To remain an integral part of the city’s fabric, the Club must recognize the need for higher taxation.
Three additional railway lines, three new road links, and accelerated progress on the borders of the Northern Metropolis were also announced in the budget. These projects will improve access to the Greater Bay Area but they incur enormous costs, contributing to the budget deficit. Chan has revealed that he intends to sell infrastructure bonds to raise the necessary funds.
The government’s pledge to fund these initiatives is encouraging, but it remains to be seen whether sufficient resources become available. The Jockey Club’s involvement could mean the difference between success and failure; it could provide the finances essential to guarantee these projects are completed on time.
According to Alex Katsanos, ICE Fellow and managing principal of Aurecon, the problem with the budget is that it fails to address Hong Kong’s ageing population and labour shortages in the infrastructure sector.
“The shrinking workforce may necessitate a serious look into the possibility of importing labour from mainland China,” Katsanos said in a recent article. “The budget increases subsidies for the Mandatory Provident Fund to attempt to retain retiring professionals. This may, however, not be enough of an incentive for employers, who face increased insurance premiums for employing individuals over the age of 65.”
It is imperative for organisations such as the Jockey Club to pay its fair share to address the challenges the city is facing and bridge the gap between the budget and infrastructure demands.
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