Hong Kong’s Financial Secretary Paul Chan Mo-po announced the final budget for the current administration on Wednesday, telling young people, the elderly and middle-income earners that the future will be bright.
He encouraged people to be positive and rise to challenges ahead by writing a new chapter in Hong Kong’s progress. “We all want further progress in society, so that young people can cherish hopes for the future, the middle-aged need not worry about the competitiveness of the younger generation, and the elderly will have no fear of abandonment,” Chan said at the beginning of his budget speech.
Here are key points from his budget:
- Marginal bands for salaries tax will be widened to HK$45,000 (US$5,800) from the current HK$40,000, reducing tax revenue by HK$1.5 billion per year yet benefiting 1.3 million taxpayers
- Salaries tax and tax under personal assessment will be reduced for 2016-17 by 75%, subject to a ceiling of HK$20,000
- Expenditure on capital works projects increases to HK$86.8 billion (US$11 billion) in 2017-18, contributing around 5% of GDP, up from $62.4 billion in 2012-13, at the beginning of the current term
- Annual spending will exceed HK$100 billion, according to the medium range forecast for the years between 2018-19 and 2021-22. “Sustainability is an issue which deserves our attention,” Chan warns
- The Old Age Living Allowance will cover 47% of the elderly population, up from the current 37%. Around 500,000 elderly people can receive about HK$10,000 to HK$30,000 more a year
- Recurrent expenditure on social welfare will increase to HK$73.3 billion in 2017-18 by 71%, up from HK$42.8 billion in 2012-13