(Budget) Despite HK$1.1 trillion in kitty, Paul Chan steers prudent course in challenging timesLocal | 27 Feb 2019 2:08 pm
Sounding a note of caution and staying firmly faithful to prudent budget principles, Financial Secretary, Paul Chan Mo-po, told Hong Kong today, policies must be prioritized for the benefit of all.
"Resources are not infinite and trade-offs are inevitable,'' he said.
His financial prescriptions came in the backdrop of a multitude of external uncertainties and slowing economic growth in Hong Kong.
Chan forecast economic growth of 2 percent to 3 percent in real terms for Hong Kong in 2019.
He also predicted a surplus of HK$58.7 billion for 2018-19 and fiscal reserves of HK$1.16 trillion by 31 March 2019.
Recurrent expenditure for the three main livelihood issues, education, health care and social welfare, is projected at HK$255.5 billion. This spending makes up nearly 60 percent of the total recurrent expenditure.
"The government has to prioritize its policy initiatives by taking into account the interests of all. No matter how many resources we put into solving problems, solutions do not happen overnight. This is especially true for difficult problems that have beset our community for many years. But, I firmly believe that challenges are meant to be overcome as long as we devote resources and tackle them step by step.''
Chan proposed several one-off measures such as tax deductions, extra welfare allowances for a month, and a one-off grant of HK$2,500 for every student.
Chan proposed a 75 percent reduction of profits tax, salaries tax and tax under personal assessment for 2018-19. It was capped at HK$20,000 per case. This will cost the Government HK$18.9 billion. The salaries tax cut will benefit about 2.05 million taxpayers, he said.
The overall tone of this year’s Budget is one of caution, reflecting a commitment to long-term investment and direct spending, rather than one-off relief measures and eye-catching give-aways, PricewaterhouseCoopers said in a statement.
Chan said the people's quality of life and services can only be improved with adequate resources.
"We must continue to leverage our edges and seize opportunities to promote a diversified economy. Now that the economic environment is fraught with uncertainties and challenges, we must get ourselves well prepared,'' he said.
Hard-working and flexible, Hong Kong people have weathered tough times and grown tougher. "With confidence, hope and concerted efforts, we will definitely be able to see the sunshine through the clouds,'' he said.