22 January 2020
Just as he signaled a few days ago, Financial Secretary Paul Chan drastically cut the "sweeteners" in his budget speech. Photo: Paul Chan/Facebook
Just as he signaled a few days ago, Financial Secretary Paul Chan drastically cut the "sweeteners" in his budget speech. Photo: Paul Chan/Facebook

No cash handouts; sweeteners, relief measures slashed in budget

Financial Secretary Paul Chan Mo-po slashed “sweeteners” and scaled back relief measures in his budget for 2019-20, citing the government’s fiscal position and the uncertain economic outlook for this year.

The budget surplus is estimated at HK$58.7 billion, down from a record HK$138 billion in fiscal 2017-18, and is expected to drop further to HK$16.8 billion in 2019-20. But the overall fiscal reserves are expected to hit HK$1.18 trillion, from an estimated HK$1.16 trillion as of March 2019.

Saying he was “very concerned” about the tax burden on salary earners, Chan reduced the salaries and profit tax by 75 percent, the same as last year, but lowered the ceiling to HK$20,000 from HK$30,000 last year.

As regards property, the government is waiving rates for four quarters, subject to a ceiling of HK$1,500 per quarter for each rateable property, down from HK$2,500 last year.

No cash handout will be provided to the public. Last year, amid tremendous public pressure, Chan had announced a cash handout of up to HK$4,000, benefiting about one-third of Hongkongers and costing the government HK$11 billion.

The financial chief also pledged to allocate HK$3.84 billion as extra allowances for welfare recipients. The payment is equivalent to one month of the standard rate for Comprehensive Social Security Assistance (CSSA), Old Age Allowance, Old Age Living Allowance or Disability Allowance. Last year it was two months.

Similar arrangements will apply to recipients of the Working Family Allowance and Work Incentive Transport Subsidy, involving an additional expenditure of about HK$149 million.

On a one-off basis, the government is providing an additional HK$1,000 worth of vouchers for elderly citizens under the Elderly Health Care Voucher Scheme.

The government will also provide a one-off grant of HK$2,500 for students in need, up from HK$2,000 last year, while paying for the examination fees for candidates sitting the 2020 Hong Kong Diploma of Secondary Education (DSE) examination.

In response to the lack of staff and overcrowding in public hospitals, Chan announced additional recurrent funding of over HK$700 million for the Hospital Authority to relieve the heavy workload of frontline public healthcare workers in the city.

The funding will be used in increasing the rate of allowance for on-call medical officers and the Special Honorarium Scheme allowance and the salary of ward support staff, as well as increasing the number of Advanced Practice Nurse posts to enhance evening ward services.

Chan has also earmarked an additional HK$5 billion for the Hospital Authority for upgrading and acquisition of medical equipment.

Under this year’s budget, the estimated recurrent government expenditure on public healthcare services will increase by 10.9 percent to HK$80.6 billion, accounting for 18.3 percent of the total recurrent expenditure.

The government is also allocating HK$10 billion to set up a public healthcare stabilization fund, which will be used for any additional expenditure that the Hospital Authority may incur in case of unexpected circumstances.

The financial secretary noted that a shortage of welfare facilities is particularly acute in densely-populated areas, where the need is the greatest.

As such, he announced that the government will allocate HK$20 billion for the purchase of 60 properties to accommodate more than 130 welfare facilities, such as day child care centers, neighborhood elderly centers, and on-site pre-school rehabilitation services, which are expected to benefit around 86,000 people.

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