Lam seeks central govt support for HK firms amid slowing economy

Ben Ng October 16, 2019 16:59

Chief Executive Carrie Lam Cheng Yuet-ngor on Wednesday asked the central government for tax concessions and other forms of policy support to help Hong Kong businesses cope with the impact of Sino-US trade tensions and a slowing global economy.

In her third policy address, Lam warned that there will be more layoffs in the near term, adding that violent protests in recent months have aggravated the situation, “posing an unprecedented challenge to our economy”.

In the first half of 2019, the Hong Kong economy grew modestly by 0.5 percent from a year earlier, its worst performance since the 2009 recession.

To cope with the increasingly austere economic situation, Lam said the SAR government is seeking policy support from "relevant central authorities for, among other things, tax concessions for Hong Kong enterprises wishing to shift from exports to domestic sales and streamlining of the approval process, with a view to enhancing their competitiveness in the mainland domestic market”.

The government is "very concerned about the pressure borne by small and medium-sized enterprises (SMEs) and members of the public amid an economic downturn,” she said.

Without announcing specific measures, Lam said the government is implementing the package of support measures unveiled in the past two months as soon as possible. “We will keep in view of the situation and, when necessary, introduce other measures to help enterprises and the public tide over difficult times."

As part of efforts to improve people’s livelihood, Lam is proposing to regularize the provision of an annual grant of HK$2,500 for each student from the 2020/21 school year.

The grant will benefit about 900,000 secondary day school, primary school, and kindergarten students in Hong Kong.

The measure is part of the HK$19.1 billion relief measures announced in August this year. Financial Secretary Paul Chan Mo-po had proposed a one-off student grant.

Lam also highlighted new policies to relieve the burden of commuting. The government is enhancing the Public Transport Fare Subsidy Scheme by increasing the subsidy rate from one-fourth to one-third of the monthly public transport expenses in excess of HK$400, as well as raising the subsidy cap from the existing level of HK$300 to HK$400 per month.

The annual subsidy provided by the government for the scheme will increase to HK$3.1 billion from HK$2.3 billion.

The government is also proposing waiving the tolls for the new Tuen Mun-Chek Lap Kok Link (TM – CLKL) Subsea Tunnel, and the Lantau Link, upon the commissioning of the TM-CLKL Subsea Tunnel scheduled for the end of 2020, and waiving the tolls for the new Tseung Kwan O-Lam Tin Tunnel (TKO – LTT), and the Tseung Kwan O Tunnel, upon commissioning of the TKO -LTT scheduled for the end of 2021.

Lam said the government is also expanding the subsidy scheme for outlying island ferry routes to 14 routes from six. Annual expenditure for the expanded scheme is estimated at HK$260 million.

The government will also replace the entire fleet for 11 ferry routes within around a decade from 2021 in two phases. This will involve the purchase of 47 new vessels.

– Contact us at [email protected]

CG

Ben Ng

EJ Insight writer