Every government is tasked with creating a budget which will best suit the needs of everyone who lives in the country or jurisdiction over which the government has authority. These budgets are to be used by the government to serve the public while also ensuring that the general economic condition of the area in question remains stable.
The government of Hong Kong is no exception; thus, it has created its budget for 2020. This budget contains several notable features which are intended to adequately address the economic realities which face everyone who lives and works in Hong Kong.
Hong Kong’s Budget Goals in 2020
Hong Kong’s budget in 2020 was created with four primary goals in mind. These goals are those of:
- stimulating the economy,
- relieving individual financial burdens,
- supporting business enterprises, and
- supporting employees
By focusing on these four areas, the government of Hong Kong believes that the budget in 2020 will be able to make the country’s economy resilient and able to withstand any external difficulties which may affect either businesses or individuals. It is also important to note that the total expenditure of Hong Kong’s government has increased by around 20% when compared to the total expenditure over the previous year.
Hong Kong’s budget is to stimulate the economy by providing assistance to sectors which have fallen on difficult financial times. Such industries include trade, retail, and tourism. It will also provide support for the emerging industries of Hong Kong. These emerging industries include the creative and technological industries.
Hong Kong’s retail industry is to receive HK$13 billion worth of inflation-linked retail and silver bonds. It is also to be allocated HK$66 billion over the next five years; this amount is intended for the issuing of green bonds. The Hong Kong Trade and Development Council is also to receive HK$150 million in order to assist trade-related business based in Hong Kong explore and make use of new business opportunities.
The Hong Kong Tourism Board is also to receive a sizable amount of money from the government. The HK$700 million which it is to receive is expected to be used for the purposes of advertising and promotion. This is a much-welcomed injection of cash for Hong Kong’s tourism industry because owing to the effects of recent events which have taken place there, its revenue earned from tourism has plummeted over the past year.
The Arts Development Matching Grants Scheme will be entitled to HK$900 million. This money is to be used for industrial diversification. Meanwhile, Hong Kong’s innovation and technology sector will receive HK$3.385 billion to be spent on various projects. These projects include those associated with smart city development as well as research and development activities.
Most of the amount provided to the innovation and technology sector is to be used to fund the second phase of the Science Park Expansion Program. The remaining amount is to be used for the benefit of the logistics industry by way of the pilot subsidy scheme as well as for the subsidizing of short-term internships for local university undergraduates and postgraduates who are studying science, technology, engineering, or mathematics.
Relief of Individual Financial Burdens
The government of Hong Kong recognizes that not everyone who lives there is able to live a life devoid of financial hardship. Therefore, over 86% of the money to be spent by the Hong Kong government as part of its 2020 budget is to be used for relief measures which will benefit individuals. Every permanent resident of Hong Kong who is 18 years old or older is to receive HK$10,000 from the government. It is believed that this action will not only serve as a financial boost for individuals, but also increase Hong Kong’s economic growth rate over the coming year.
Those who are to take the Hong Kong Diploma of Secondary Education examination will not have to pay an examination fee because this fee will be paid by the government. The salaries tax of Hong Kong will also see a dramatic reduction; however, the tax bandings of Hong Kong will remain unchanged.
The government of Hong Kong will also increase the amount of welfare payments which it is to provide. Every recipient of Old Age Allowance, Old Age Living Allowance, CSSA payments, Disability Allowance, or certain Work Incentive Transport Subsidies is to receive an additional month’s worth of welfare payments. The rates for residential properties are to be waived up to a ceiling of HK$1,500 per quarter. All tenants who earn low levels of income and live in public rental units will receive a month’s worth of free rent from the government.
Support of Businesses
The businesses of Hong Kong form the foundation of its economic growth and development. Thus, the government deems it necessary to provide support for these businesses through its budget. Among the financial benefits which are to be provided to the businesses of Hong Kong include tax reductions, reductions in rent and utility fees, fee waivers, and funding for the training of employees. An estimated 1.5 million business operators and owners across Hong Kong are expected to take advantage of the upcoming waiver of fees for business registration which is to be supplied.
The government has also spent HK$212 million to waive all company registry fees for annual returns over the coming two years. Approximately 1.4 million firms based in Hong Kong will benefit from this waiver. All eligible enterprises which are under the SME Financing Guarantee Scheme will receive a low-interest loan of up to HK$2 million. The repayment period of each of these loans is three years.
Hong Kong’s businesses will also experience a 75% discount up to a ceiling of HK$5,000 for four months with regard to bills for non-domestic electricity accounts. A similar discount of 75% will apply for water and sewage bills; the upper limits for these are HK$20,000 and HK$12,500 respectively.
All cruise lines and cruise terminal tenants will have their fees reduced for up to six months. The rates for non-domestic properties will also be limited. The upper limits are HK$5,000 per quarter in each of the first two quarters of the coming year and HK$1,500 per quarter in the following two quarters for each non-domestic property.
The government of Hong Kong’s support of businesses and business activities may have made you consider starting one of your own. If such happens to be true, allow us at Paul Hype Page & Co to be of assistance. Our team will guide you through the process of company incorporation in Hong Kong so that you will be able to start and run a Hong Kong-based company of your own. We will also manage all licensing-related issues on your behalf if you require us to do so.
Support of Employees
Hong Kong’s budget in 2020 will support its employees in several different ways. The Labour Department is to receive HK$30 million to be used for the establishment of employment programs. An estimated 4,000 people per year are expected to benefit from such programs. Among the initiatives linked to such programs include the Youth Employment and Training Program, the Work Orientation and Placement Scheme, and the Employment Program for the Elderly and Middle-Aged.
A total of HK$200 million has been provided to the Construction Industry Council. This money is intended by the government to be used for training allowances for employees. It should also go towards subsidizing contractors for SMEs; these subsidies are to have ceilings of HK$20,000.
The Employees Retraining Board will use the money with which the government has provided it to improve the quality of its Love Upgrading Special Scheme. It will do so by providing 10,000 additional places while also increasing the maximum monthly allowances granted to all in the scheme who are eligible. The allowance will be increased from HK$4,000 to HK$5,800. Through the use of this scheme, the unemployment rate of Hong Kong is expected to fall.
On a related note, you might have considered relocating to Hong Kong for the purposes of working there. Should such be the case, we at Paul Hype Page & Co will enable you to receive a visa which is valid in Hong Kong. We will work with you so that you will be able to legally live and work in Hong Kong. This will in turn enable you to receive all the benefits derived from living and working there.
The government of Hong Kong has clearly put much thought into the creation of its 2020 budget. It considered financial and economic condition within Hong Kong as well as around the world when doing so. At the same time, the government also understands that the welfare of the people who live in Hong Kong must never be ignored. Thus, it also dedicated a large portion of the budget to improving the financial condition and thus the lives in general of those who have been facing hardships related to money. One can make the claim that Hong Kong’s 2020 budget reflects well on a government which prioritizes economic growth while also ensuring that the quality of life of those living there is not forgotten.