HONG KONG: Hongkongers will get no cash handouts in this year’s budget, despite mounting pressure from across the political spectrum on Financial Secretary Paul Chan Mo-po, who will instead offer “massive” tax incentives and relief measures targeting specific groups, especially the middle class.
Expectations are high, as the first budget to be rolled out under the new administration is seen as a testimonial of the new fiscal philosophy of Chan and Chief Executive Carrie Lam Cheng Yuet-ngor.
“The whole thinking behind the budget is about sharing, how people can get a fair share from the big surplus,” a source familiar with the fiscal situation told the Post.
Instead of lowering the standard salaries tax rate, which would benefit higher-income groups, it is understood Chan will announce substantial tax rebates to lessen the burden of middle-class families struggling to cope with housing and family expenses. Rather than handing out cash to everyone, as neighbouring Macau does every year, the Hong Kong government is set to dish out sweeteners, also known as relief measures, for more targeted needy groups. The value of the sweeteners could be as high as HK$40 billion if the administration continues its usual practice of spending a third of its surplus on “goodies” for the public.
The Post reported earlier that the surplus had already exceeded HK$120 billion and would fall just below HK$160 billion as projected by some giant accounting firms.
The source added that more allowances would be granted to ensure the remaining 10 per cent of primary schools in the city would hire social workers to protect students from family abuse.
The government is also expected to lower the first registration tax for private electric vehicles.
