Hong Kong SAR Budget 2019/2020

Author: Dutch Chamber of Commerce

The 2019-20 Budget was released by the Financial Secretary Paul Chan.

Here’s a snapshot of measures onhousing, health care, caring society, developing a liveable city, tax relief and other concessions, key economic development initiatives, key economic and fiscal figures.

Housing and Land 
        Public housing supply of 100,400 units estimated for next 5 years 
        Private housing supply of 93,000 units estimated in next 3-4 years 
        2019-20 Land Sale programme includes 7 commercial/hotel sites capable of producing 814,600 sq m of floor space 
        HK$2b to help NGOs construct transitional housing 

Health Care 
        HK$10b for a Public Healthcare Stabilisation Fund to ensure stable funding for public healthcare services 
        HK$5b to hasten upgrade and purchase of medical equipment 
        HK$1.2b to establish the Hong Kong Genome Institute 
        HK$400m to expand scope of drug formulary 
        HK$700m recurrent boost for Hospital Authority to boost staff morale, retain talent 

Caring Society 
        HK$20b to purchase 60 properties to provide over 130 welfare facilities 
        HK$200m for wi-fi services at social welfare premises 
        HK$1.36b for residential day-care and subsidized day care places for the elderly 
        HK$290m to boost rehab services 
        HK$1.298b to boost services for children, youth 
        HK$500m for IT innovation in schools 
        HK$200m to expand apprenticeship schemes for construction industry 

Liveable City 
        HK$6 billion for enhancement of waterfront 
        HK$600m to refurbish 240 public toilets 
        HK$200m to support Urban Forestry Support Fund 
        HK$300m for geospatial data sharing platform 
        HK$120m to expand public charging network for electric vehicles 
        HK$1b for renewable energy facilities in government departments 
        HK$176m to host large-scale world-class arts and culture programmes 

Support for business and salary earners 
        Reduce profits tax for 2018-19 assessment year, up to maximum of HK$20,000 
        Reduce salaries tax for 2018-19 assessment year, up to maximum of HK$20,000 
        Waive rates for the 4 quarters of 2019-20, up to $1,500 per property, per quarter 
        Waive business registration fees for 2019-20 
        Expand network of FTAs, CADTs and IPPAs as well as network of overseas offices (Note: New Bangkok ETO opening on February 28) 

Innovation and Technology 
        More than HK$44b (US$5.6b) in new spending initiatives, including: 
-        HK$5.5b for Cyberport 5 to house more tech companies and startups 
-        HK$20b extra for Research Endowment Fund for more research projects 
-        HK$16b for university refurbishments, esp. R&D facilities 
-        HK$800m to support utilisation of R&D work by universities, key state laboratories 
-        HK$2b for a Re-industrialisation Funding Scheme 
-        HK$200m to expand the Corporate Venture Fund of Science Park 
-        Two innovation clusters at Science Park on AI/Robotics and Healthcare technologies 

Financial Services 
        First batch of green bonds to be issued 
        Tax concessions for Marine Insurance and underwriting of specialty risks 
        50% profits tax concession on Marine Insurance businesses 
        Consider limited partnership regime/tax arrangements to attract private equity funds to HK 
        HK$400m seed capital for Financial Reporting Council 
        Establish Academy of Finance for financial leadership development 

        HK$353m for HKTB to continue implementing tourism development blueprint 
        HK$150m to support development of online dispute resolution platform 
        HK$1b for Film Development Fund 

Economic Performance in 2018 
GDP growth:                 3% 
Headline inflation:         2.4% 
Underlying inflation:      2.6% 
Unemployment:            2.8%  - the lowest in 20 years. 

Economic Forecast for 2019 
GDP growth:                 2-3% 
Headline/Underlying inflation: 2.5% 

Fiscal Surplus of HK$58.7 billion (US$7.5 billion) estimated for 2018-19 
Surplus of HK$16.8 billion forecast for 2019-20 
Total fiscal reserves of HK$1,178.4 billion (US$151b) forecast by end-march 2020 – equivalent to 23 months of government expenditure 

Total Government Revenue of HK$626.1 billion estimated in 2019-20 
Total Government Expenditure of HK$607.8 billion for 2019-20 
Education (HK$124b), Social Welfare (HK$97.2b), Health (HK$88.6b) account for 51% of total spending 
Infrastructure spending of HK$79.1b 
Profits tax (HK$159.6b), Land premiums (HK$143b) and Stamp duties (HK$76b) account for 60% of revenues 

More details on Budget website: 

Budget promotes a caring and high-quality living environment

FS uses Budget to help diversify the economy, promote innovation and technology 

FS introduces Budget measures to counter uncertain economic outlook, support businesses and residents