Budget Paper

Introduction

In this year's Budget Speech delivered by Mr. John Tsang Chunwah, the Financial Secretary, there were seven one-off relief measures [Budget Speech 59. (1-7)], including:

(1) Waiving rates for 2012-13, subject to a ceiling of $2,500 per quarter for each ratable property;

(2) Reducing salaries tax and tax under personal assessment for 2011-12 by 75 per cent, subject to a ceiling of $12,000;

(3) Granting each residential electricity account a subsidy of $1,800;

(4) Providing an extra allowance to Comprehensive Social Security Assistance (CSSA) recipients, and an extra allowance to Old Age Allowance and Disability Allowance recipients;

(5) Payment of two months' rent for public housing tenants;

(6) Extended and improved short-term food assistance services through the additional funding of $100 million;

(7) Giving all student loan borrowers who complete their studies in 2012 the option to start repaying their student loans one year after completion of studies.

In this paper, the effectiveness of the seven measures in different aspects will be discussed.

Rates concession relief measure

This year, the Hong Kong Government Budget proposed rates concession relief measures, three million property units are exempted from rates for one year, a maximum of $ 2,500 per quarter (i.e. $ 10,000 a year). The biggest problem of this policy is that the biggest beneficiaries of the rates concession will be held by the consortium of a large number of properties, contrary to the original intention of the relief measures, i.e. to alleviate the burden on the public. And the policy is therefore proposed to be amended to restrict each owner up to only three property units entitled to rates relief properties. Information according to the Financial Services and Treasury Bureau, the annual waived amounted for certain agency can be up to 9,060 million.

The unit for rates exemption system can actually be changed to the owner, regardless of the number of properties held by each owner on a quarterly basis shall be entitled to a maximum of $ 2,500 rates exemption, I believe that such restrictions will be more reasonable. However, it consumes many human and material resources to verify the qualifications, plus part of the tenants cannot enjoy the rates concession. I believe that the authorities should have a complete database record of the property holders to verify the eligibility, or may require the owners to take the initiative to apply to be entitled to rates relief.

Salary tax reduction

Among the seven relief measures, the most significant feature made was the tax rebate, more than a million middle-class people paying taxes should be overjoyed, but a large number of the people who only pay a small amount of taxes and not paying taxes would be dissatisfied. In fact, such a large tax rebate rate was not expected, the authorities simply did not need to retire so many taxes, especially over the past year when Hong Kong's economic environment is quite ideal, middle-class people certainly would not be the most in need.

In a basket of tax measures, I do not quite agree to increase the basic allowance, because this makes a