HK to introduce $4.4b relief measures in 2015-16: financial secretary

The government of Hong Kong Special Administrative Region will introduce six one-off relief measures amounting to 34 billion HK dollars (about 4.4 billion U.S. dollars) in 2015 to help alleviate the financial burden on the public and stabilize the economy, Financial Secretary John Tsang said Wednesday.

Delivering the 2015-16 budget speech, Tsang said the measures are based on the challenging international macroeconomic environment, the unstable economic factors, the need to boost the local economy in the short term, and government's relatively sound fiscal position in the short to medium term.

The six measures include reducing salaries tax and tax under personal assessment for 2014-15 by 75 percent benefiting 1.82 million taxpayers, reducing profits tax for 2014-15 by 75 percent benefiting 130,000 taxpayers and waiving rates for the first two quarters of 2015-16 benefiting 3.15 million properties.

Others include providing extra allowance to the old and the disabled worth 5.5 billion HK dollars, paying one month's rent for qualified lower income tenants, involving an expenditure of 1.1 billion HK dollars and increasing the basic and additional child allowances.

Tsang said together with other measures in the budget, they will have a fiscal stimulus effect of boosting the GDP by one percentage point.

In addition, the HKSAR government will also introduce measures to support the Small and Medium Enterprises to (SMEs) maintain the economic vibrancy and preserve employment, Tsang said, adding the SMEs are the mainstay of Hong Kong's economy.

Relative measures include injecting 1.5 billion HK dollars into the SME Export Marketing and Development Funds, increasing the maximum amount of funding support for each project under the SME Development Fund and expanding the scope of the SME Export Marketing Fund.

Looking ahead, Tsang said the year 2015 will be a challenging year, and local consumption and investment sentiment will be dampened by the increased uncertainties over the U.S. interest rate hike and weaker spending power of inbound visitors.

In the face of internal and external challenges, Tsang forecasts Hong Kong's GDP growth at 1 to 3 percent in 2015.

Regarding inflation, Tsang said with the softening of global commodity prices in the past year, imported inflation will remain mild. He expects the underlying inflation rate for 2015 as a whole will be 3 percent.