1996-97 Budget Speech : CONCLUSION

1996-97 Budget Speech

CONCLUSION

125. Mr President, this afternoon I have explained how past developments have given us a strong, healthy and mature economy which has the potential to go on flourishing in the next century. I emphasised the partnership between a business-friendly government and a market-friendly business sector. This partnership is based on our established policy of minimal intervention and maximum support for business.

126. I have said that I share this Council's genuine concerns for those members of our society who have missed out on the prosperity generated by economic growth. I have tried to address these concerns. I have funded all the pledges made by the Governor in his Policy Address last October on the whole range of social services. In addition, I have proposed further improvements today to the CSSA scheme which will cost $200 illion over and above the $300illion pledged by the Governor last October.

A further increase in the CSSA standard rates for adults not expected to work due to ill-health, single parents and family carers, which brings their rates from 1 April up to $1,935 a month for a single person and $1,760 for a person living in a family.
A further increase for adults expected to work, bringing their standard rates up to $1,615 a month for a single person and $1,440 a month for an adult living in a family.
A new increase in the standard rate for adults with a 50 per cent disability living in a family, bringing their new rate up to $1,760 a month.
A new special grant of $320 a year for the elderly as reimbursement for social and recreational activities, and a new annual payment of $200 for the elderly at Chinese New Year.
Freedom for the elderly to retire to China while receiving CSSA standard rates and long term supplements.

Also, I have proposed significant new funding support to build up our soft infrastructure and to improve our competitiveness.

$300 million for the Employees Retraining Board to expand its programme of retraining our local workers.
$39 million a year (on a full year basis) to make an early start on implementing the recommendations in the Education Commission Report No. 6 on English and Chinese language training.
$50 million for a Services Support Fund for projects to enhance the competitiveness of our services sector.
$50 million for a Tourism Development Fund to maintain Hong Kong's position as a premier tourist destination.

I cannot take personal credit for these initiatives. Many are based on proposals from Members of this Council.

127. I have restated a commitment to the principles which will continue to govern our public finances in the years to come, particularly the importance of living within our means. I intend to maintain strong fiscal reserves, and I am pledged to maintain the current linked exchange rate with the US dollar.

128. On new revenue measures, I have proposed to increase the Betting Tax on horse racing by a half percentage point at the expense of the commission currently received by the Royal Hong Kong Jockey Club. I have also restored the Air Passenger Departure Tax to the 1983 level of $100. I have decided not to change the level of Profits Tax and have adjusted the duty on tobacco and hydrocarbon oils only in line with inflation. I have proposed a number of substantial concessions for Salaries Tax. For example,

a 14 per cent increase in the basic allowance to $90,000 and the married person's allowance to $180,000,
a 11 to 14 per cent increase in the allowance for dependent children,
an increase of 11麖er cent in the basic allowance and 17麖er cent in the additional allowance for a dependent parent or grandparent,
an increase of 13 per cent, from $40,000 to $45,000, in the single parent allowance,
a 36 per cent increase, from $11,000 to $15,000, in the disabled dependant allowance,
a new allowance of $24,500 for a dependent sibling and an additional allowance of $15,000 where the sibling is disabled, and
a specific deduction, up to $12,000 a year, for attending training courses at approved institutions.

Again, most of these measures reflect suggestions made to me by Members during my consultations with them. 129. I have also proposed specific concessions on Estate Duty and on Stamp Duty payable by home buyers. As an environmental measure, I have proposed a reduction up to $30,000 in the First Registration Tax for a new private car if an owner scraps a car which is ten or more years old and which uses leaded fuel without a catalytic converter. For the hotel industry, I propose to allow hotels an annual 20 per cent write-off for expenditure on refurbishment.

130. My vision is to meet the community's expectations for Hong Kong as a premier centre for international trade, manufacturing and services in the region. For this I have mapped out an ambitious strategy. I have also proposed to halve the ad valorem fees on company registration and increase the exemption levels for business registration by 100 per cent for the sale of goods and 150 per cent for the sale of services.

131. For manufacturing industry, the Government has accepted the need for a science park and will proceed with final site selection and the design of appropriate institutional arrangements. We have also accepted the case for a second industrial technology centre and are about to begin planning for the fourth industrial estate.

132. For the services sector, the Task Force has put together a preliminary package of initiatives. Details of these initiatives are given in an Addendum to the Budget Speech. They include a new role for the Trade Development Council, an expansion of the activities of the Industry Department and the Export Credit Insurance Corporation. We are examining the benefits we could obtain from a mortgage corporation. We have proposed special encouragement for financial services through a 50 per cent reduction in Profits Tax for certain types of debt instruments and exemption from Stamp Duty for the hedging transactions of market makers.

133. In presenting this Budget, my aim, Honourable Members, has been to enable our economic success story to continue well into the next century. By equipping the people of Hong Kong with the skills they need to go on improving their quality of life and building our community's prosperous future. This future must include everyone. Economic success will enable us to provide the care, support and protection for those who need it. We will be able:

to help the elderly live active and full lives enjoying the dignity and respect that they deserve by, for example, providing more home help services, social centres, residential care and financial assistance;
to improve our health care facilities still further and promote an environment in which each member of the community has better control over his or her own health; and
to promote an integrated education system which enables students at all ages to develop their capabilities to the full and qualify at internationally recognised academic, professional and vocational standards to meet the changing needs of our economy.

134. This is what real growth really means. The actual effect of improving the lives of people: their health, their living conditions, their education, their careers. This real growth has been and will remain our most important objective. And the continual improvement in our standard of living and the constant upgrading of our public services will be funded from within Government's share of the additional wealth created. We will not increase that share and compete with the private sector for resources because, as Hong Kong continues with its success story, we will not need to. It is as simple as that.

135. Mr. President, we Hong Kong people have much to do to build our prosperous future. Fortunately, we know what to do, and we know how to do it. I move that the debate on this motion be now adjourned.

[1996-97 Budget Speech] [Addendum]