Overall speaking, this year’s Budget (Appropriation Bill) is the best and the most comprehensive one of these past three years. Not only has it taken care of our grass root citizens, support to the middle class is also the strongest in recent years. Although the grievances of the middle class are yet to be fully mitigated, the proposed measures do help alleviate certain pressure amongst the class and therefore, deserve a round of applause.
Planning for the Future – A Move Worth Our Support
According to findings of a public opinion poll conducted by the University of Hong Kong, the satisfaction level of Hong Kong citizens towards the Budget registered a record high of the past five years. The Budget has echoed to the policy initiatives of the Policy Address with supportive financial provisions for implementation many of which are pragmatic and prudent.
Amidst fluctuations in the external economy and local structural issues such as an aging population, the Financial Secretary is setting up the “Future Fund” as a measure to lighten the increasingly heavy financial burden over the long run. It is a forward-looking move and deserves our support.
Seizing Opportunities from “One Belt and One Road”
Improvements are also evident in the Budget in terms of planning for Hong Kong’s long term development. Not only do we see a stronger presence of the subject in the Budget, but also a number of industrially-recognized measures being proposed. For example, the government will be investing resources to strengthen the training of financial talents for the financial industry, in particular on insurance and wealth management professionals.
The Budget is also seizing the once-in-a-millennium opportunity as China rolls out the “One Belt and One Road” strategy and establishes the Asian Infrastructure Investment Bank. I do hope that the HKSAR government can expedite its research work and identify the role of Hong Kong in these important national strategies as soon as possible. Relevant development strategies should be formulated, such that the industry and Hong Kong people could get well-prepared accordingly and take the necessary actions in a timely manner, better exerting Hong Kong’s advantages and bringing more opportunities for the territory.
Economic Diversification Awaits Stepping-up
However, the Budget is still far from satisfactory in breaking down the existing bottlenecks in economic development to promote economic diversification. We do not notice any attempt of a comprehensive analysis in view of the continuously eroding traditional edges of the Hong Kong economy, nor has it raised tactics to address these fading strengths.
When the Financial Secretary explained to the press about the Budget, he mentioned that at present, Hong Kong’s degree of dependence on foreign trade equals 344% of the GDP, which is much higher than 30% in the U.S. In other words, Hong Kong tops the list in this respect. However, at the same time, Hong Kong’s entrepot trade has been declining because of its lack of competitiveness. The situation does give out a clear signal for our grave concerns. Unfortunately, the Government has stayed on mute with the problem. We do hope that the authorities could explain in details how to deal with this in future.
Import of Labor Necessary to Assist SMEs
The Budget has responded positively to the predicament of SMEs. The application period for the special concessionary measures under the SME Financing Guarantee Scheme has been extended, and new funds are injected into the “SME Export Marketing Fund” to increase the maximum funding support for each project and expand the scope of beneficiaries.
SMEs are, however, still facing shortage of manpower and soaring rents; they are in dire needs of supportive policies and measures to help alleviate their plights. In terms of manpower shortage, Hong Kong is at present registering full employment. There are only about 2,000 - 3,000 employees imported from overseas, which accounts for about 0.1% of the entire working population.
I welcome how the Budget proposes to seriously consider importing manpower, and details are being discussed at the Labour Advisory Board. We are looking forward for a consensus and relevant policies and measures to be rolled out as soon as possible to ensure sufficient manpower supply to meet with the long term economic development. While the Authorities are actively identifying residential land, they should also bear in mind that adequate land should be made available for commercial and industrial development.
Furthermore, the authorities should also put more efforts into sharpening the edges of SMEs. In particular, they should research into assistance plans that promote industrial innovation and scientific researches in SMEs, provide tax deductibles on research investments for the industry, and offer comprehensive support to the innovation and transformation development for SMEs, such that this pillar of Hong Kong’s economy can gain healthy development.
Think Twice Before Handing out Giveaways
The Budget has not done enough to drive our socio-economic development. In fact, with the Government’s world-leading fiscal strength, it has every reason to augment its investment, so as to create a solid foundation for the long term economic development of Hong Kong. Unfortunately, the Government has been too short-sighted and pre-occupied with handing out giveaways. Despite the merits of alleviating citizens’ financial hardship it is short-lived and cannot make substantial impacts on economic development of Hong Kong in the long run.
Moreover, as public resources are scarce, giveaways cannot be infinite. Giving out sweeteners is contradictory to the Government’s objective to solve structural deficits in public finance. The HKSAR Government has always been facing deep-rooted conflicts – wealth inequality is worsening, and the general public is yet to share the fruits of economic prosperity. Giveaways are not at all helpful in tackling these structural contradictions.
To resolve these problems from their roots, the Government should leverage on the golden opportunity of a weak external economy and make good use of its huge budget surplus to increase its investment for the future; it should drive long-term economic development and promote diversification in our economy. Only by baking a bigger pie can the Government accelerate economic transformation, boost economic growth and generate new hopes to the entire society to benefit from its fruits.
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