Hong Kong To Spend $15 Billion To Support Wounded Economy
Speaking during his 2020-2021 budget delivery speech at the Legislative Council, Hong Kong’s Financial Secretary Paul Chan said that the planned economic relief measures will also include generous tax exemptions, business support, and initiatives to fight the COVID-19 epidemic.
The latest economic news from China state that the Hong Kong government is willing to tank by 4.8 percent of GDP for the next financial year, according to Chan.
Hong Kong’s economy has been taking a beating since early 2019. Which saw the GDP decline by 1.2%, the highest, and only downfall in ten years. The economy is suffering its worst recession since 2009. And it’s affecting Hong Kong’s reputation as a global, wealthy commercial metropolis.
“The deficits occur because the government revenue cannot keep up with a drastic increase in government expenditure. This is especially true with recurrent expenditure.” Said Chain.
Hong kong’s Economy has had a Rough Year
2020 hasn’t been prime for Hong Kong residents, who started a rough New Year. This was amidst extreme measures from the police against pro-democracy protesters and fear of a coronavirus outbreak.
The rift between the government and its citizens in Hong Kong played since the British government surrendered Hong Kong back to China over 20 years ago.
This year, the government went as far as canceling the celebrated Lunar New Year parade and the New Year’s Eve fireworks to discourage protesting.
The Chinese central government efforts pushing reforms in Hong Kong were always met with severe opposition by its citizen
The central government in Beijing has severally tried to stifle special administrative regions, including the famous gambling hub, Macao.
Cash Payouts for Permanent Residents Will Benefit Millions
“Since January 2020, Hong Kong has come under the threat posed by the novel coronavirus outbreak. Which further dealt a blow to the economy”, Chan said, according to his official Cantonese translation. “The government has vowed to take decisive measures to tackle the situation.”
Moreover, Chan outlined various allocations of government funds as follows:
Healthcare support and housing: The government pledged HK 75Billion towards supporting mental health. This was a result of social incidents during protests and the coronavirus outbreak.
Through the Hong Kong Mortgage Corp, the government plans to launch a fixed-rate mortgage pilot program to create more homeowners and protect their investments.
Welfare: The government pledged to allocate funds as follows:
- A single allowance for approximately 200000 low-income households
- An HK $10,000 payout for every permanent Hong Kong resident,
- A %100 reduction on personal and salaries tax, subject to a ceiling of HK$20000 for 1.5 million residents.
Chan stated that the government will gradually reduce the one-time relief measures, with rising government expenditure in the future.
The country remains in recession. Furthermore, Chan stated that Hong Kong was designed to weather enormous challenges, “I forecast our economic growth to be 1.5 percent to 0.5 percent in real terms in 2020.”
According to him, the government reserves have 1 trillion Hong Kong Dollars. And that has made it possible to take on drastic measures like cash payouts.
In conclusion, Chan stated, “Hong Kong may have all sorts of shortcomings, but it is our home that allows diversity and freedom of development. Even if we face disappointment, we can choose to feel hopeful for our future.”
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