Reduced sweeteners in a diversified budget

[Sponosred Article]

The Financial Secretary unveiled a health-conscious budget with tax incentives earmarked for economic diversification, maritime services development, and innovations and technology transformation, that prepares Hong Kong for the bumpy road ahead. With the enviable fiscal surplus dropped two-third to HK58.7 billion, EY agrees with the latest budget those counter-cyclical measures it took to better utilize fiscal reserves rather than handing out short-term sweeteners.

In tandem with Hong Kong’s fiscal health, the Financial Secretary clearly noticed that the sore of Hong Kong’s public health needs to be addressed before it festers. The recurrent government expenditure on public health care has been increased by 10.9% to HK$80.6 billion. The additional HK$700 million recurrent funding to increase medical staff and health professionals’ allowances; the extra HK$5 billion for medical equipment acquisition and upgrade; and the creation of a HK$10 billion public health care stabilization fund are generally welcome.

More laudable was the Financial Secretary’s desire to diversify Hong Kong’s economy away from the “four-pillar” service industries – financial services, tourism, logistics and professional business services.

Agnes Chan, Managing Partner, EY Hong Kong and Macau, says, “We welcome the Financial Secretary’s commitment to diversify through developing technology infrastructure, pooling talent, supporting enterprises and promoting re-industrialization.”

A further area where the Financial Secretary could have elaborated more is the extra expenditure earmarked to promote research and development (R&D), technology and innovation in addition to the considerably large expenses already incurred. Some commentators may have hoped for guidance on the internal performance measures the Government will apply in assessing whether taxpayers are receiving the best bang for their buck.