By Alisha Wong
February 29, 2024
Paul Chan, Financial Secretary, delivered Hong Kong’s Budget for 2024 on Wednesday, 28 February at the Legislative Council. “Advance with Confidence. Seize Opportunities. Strive for High-quality Development,” is the theme of the Budget.
Chan said in the introduction that with a “complicated” international environment and the constant evolution of Hong Kong’s economy and society, “more strenuous efforts are required to strengthen momentum of our economic recovery.”
Talking about the overall economic recovery progress in Hong Kong, the minister unveiled that the inflation rate of 2023 was 1.7% excluding the effects of the government’s one-off measure with the predicted inflation rate from 2025 to 2028 being 2.5% per year. Given efforts of the government to boost tourism, private consumption and fixed asset investment, Hong Kong’s economy grew by 3.2% in 2023.Chan forecasted that the city’s economy will expand further this year, with an expected growth rate of 2.5% to 3.5%.
Despite the generally positive figures given above, the city expects a deficit of HK$101.6 billion in this fiscal year, ending by March 2024, while the prediction during the 2023 Budget was HK$54.4 billion, which was around 50% less than the updated figure.
Surplus and deficit of Hong Kong since 1997-1998 (in $ million). Data: Financial Services and the Treasury Bureau, HKSAR
The government will aim to achieve fiscal balance step by step and “maintain fiscal reserves at a prudent level.” Some expenditure will be cut and some revenue increases through various means. Below are two of the major policies Chan delivered today with an aim to balance the books and how people see them.
Tourism
Following the “Hello Hong Kong” and a series of measures to enhance tourism recovery after Covid, in this year’s budget, the government will allocate over HK$1.09 billion to strengthen tourism development.
One of the highlights is Splendid Victoria Harbour, where the government proposes to have monthly pyrotechnic and drone shows and to revamp “A Symphony of Lights”, the light show starts at 8pm daily.
A Symphony of Lights show of Hong Kong, 2021. Video: Virtual Tours HK/YouTube
“The show is a bit messy here, using too many buildings and colours. The light show of Shanghai is way better than the current one in Hong Kong,” said Mr Xu, a tourist from Shanghai, who watched the harbour light show the night before. Xu added it is good to revamp the show and hoped the government could put more effort into planning a cohesive show.
The local government will also offer immersive and in-depth tourism based on themes such as “Citywalk” and organise hiking, cycling, stand-up paddle boarding, trail running and stargazing.
Started working in the tourism industry forty years ago, Xu said Hong Kong needs to think about its comparative advantages before planning these activities. “I’ve been to many places with more beautiful natural scenery. Why would tourists come for hiking?.”
Xu’s daughter, who is in highschool, also mentioned the air pollution and visibility problems when being asked her view on stargazing.
Housing Market
In response to a weaker property market in recent months, all demand side management measures for residential properties are cancelled immediately, including Special Stamp Duty, Buyer’s Stamp Duty, or New Residential Stamp Duty.
“I don’t know if it is good for me or not,” said Mak, a third year Geography student at the University of Hong Kong. “Will the property prices go up? Will the economy be better? Will we be able to buy a flat when we graduate?”
Mak also expressed concern on the purpose of the measures, citing online forum comments saying that whether average citizens can afford a house in Hong Kong is disregarded with the axing of all extra stamp duties.
To prevent property speculation and to cool the property market, since 2010, the government levied a Special Stamp Duty on properties that switched hands within 24 months, imposed a Buyer’s Stamp Duty on non-permanent residents and businesses and placed a New Residential Stamp Duty on buyers buying a second property.
Further promotion of tourism and measures to revive the property market are just two major highlights of the 2024 Budget. Other important measures include but not limited to: increasing tobacco tax, raising salaries tax rate for those earning HK$5 million and more per year and reviving hotel accommodation tax.
“It is obvious that the path we have trodden, however winding or bumpy, has always led to a better tomorrow,” Chan encouraged the Hong Kong people in his concluding remarks.
Featured image: Photo gallery of 2024 Budget HKSAR government website
Reported by Alisha Wong
Edited by Hannah and Estelle