Hong Kong's financial secretary John Tsang on Wednesday proposed 11 one-off relief measures, involving 33 billion HK dollars (4.3 billion U.S. dollars), aiming to help ease the pressure on Hong Kong's middle class, grass roots and small- and medium-sized enterprises (SMEs).
Tsang unveiled these measures in his annual budget speech to lawmakers at the city's Legislative Council.
Among these measures, Tsang proposed waiving rates for the fiscal year 2013-14, subject to a ceiling of 1,500 HK dollars per quarter, for each rateable property in Hong Kong. The proposal will cost the city government 11.6 billion HK dollars.
The financial chief also proposed reducing salaries tax and tax for 2012-13 by 75 percent, subject to a ceiling of 10,000 HK dollars. The reduction will benefit 1.53 million taxpayers in Hong Kong, and will cost the city government 8.4 billion HK dollars.
Tsang also suggested granting each residential electricity account a subsidy of 1,800 HK dollars, which will cost the city 4. 5 billion HK dollars.
Other measures included providing an extra allowance for specific poor residents, increasing the basic and additional child allowances from the current 63,000 HK dollars to 70,000 HK dollars for each child, waiving the business registration fees for 2013-14, and reducing profits tax for 2012-13.
Tsang said these one-off measures, from a micro perspective, can help ease the community's burden, and are counter-cyclical from a macro perspective for coping with short-term economic fluctuations, maintaining spending power and supporting the employment market.
The measures which were proposed in last year's budget had a stimulus effect on GDP that helped maintain Hong Kong's economic growth and a low unemployment rate, he said.
Tsang said Hong Kong's political parties and members of the public had diverse views on whether the city government should continue the one-off relief measures implemented in recent years.
The allocation of resources by the city government is based on the principle of "policy leads and financial resources follow," he said. "For one-off measures or otherwise, the use of all government expenditure should be strictly subject to the same principle of fiscal prudence." (1 U.S. dollar = 7.76 HK dollars)