HONG KONG, Feb. 26 (Xinhua) -- The Hong Kong Special Administrative Region (HKSAR) government's financial secretary delivered the annual budget Wednesday, unveiling a string of counter-cyclical measures amounting to more than 120 billion Hong Kong dollars (about 15.4 billion U.S. dollars) to help the community tackle the current economic difficulties.
Financial Secretary Paul Chan said in his speech on the 2020-2021 budget that 2019 was "an unsettling year fraught with obstacles" for Hong Kong, while the spread of COVID-19 in 2020 "has dealt a severe blow to economic activities and sentiment in Hong Kong."
Chan said Hong Kong's economy contracted by 1.2 percent in 2019, and he forecast full-year growth of between minus 1.5 percent and 0.5 percent in 2020.
"Therefore, I have decided to implement counter-cyclical measures of a massive scale involving above 120 billion (Hong Kong dollars) so as to meet the public's expectations as far as possible," he said.
Focusing on "supporting enterprises, safeguarding jobs, stimulating the economy and relieving people's burden", the measures proposed in the budget range from various tax reduction to cash handout.
The measures to relieve the public's financial burden include reducing salaries tax and tax under personal assessment for 2019-2020, waiving rates for residential properties, and providing an extra allowance to eligible social security recipients.
Chan also announced a payment of 10,000 Hong Kong dollars to each Hong Kong permanent residents aged 18 or above, with a view to encouraging and boosting local consumption on the one hand, and relieving people's financial burden on the other. This measure is expected to benefit about 7 million people.
To safeguard jobs and support enterprises, the budget set aside a total of 18.3 billion Hong Kong dollars to implement a raft of measures, including introducing a concessionary, low-interest loan to small and medium enterprises, reducing profits tax for 2019-2020, waiving rates for non-domestic properties and business registration fees, and so on.
In the new budget, Chan forecast a fiscal deficit of 37.8 billion Hong Kong dollars in 2019-2020, the first time for Hong Kong over the past 15 years, resulted from the HKSAR government's recent four rounds of relief measures costing over 30 billion Hong Kong dollars, together with the 30-billion-Hong Kong dollar Anti-epidemic Fund established in response to the recent COVID-19 outbreak.
Taking into account a decrease in tax and land revenues in the coming fiscal year due to the impact of the external economic environment and the COVID-19 epidemic, as well as the launch of counter-cyclical fiscal measures on a much larger scale and the continued increase in recurrent expenditure, Chan said he expects the fiscal deficit will rise to 139.1 billion Hong Kong dollars in 2020-2021.
"Although a record high deficit is envisaged in next year's budget, I believe that only with such a budget can we help our community and local enterprises ride out their difficulties," he said.
Hong Kong's fiscal reserves are expected to be 1,133.1 billion Hong Kong dollars by March 31, 2020, according to the budget.
The financial secretary said the current fiscal reserves enable the HKSAR government to roll out special measures amid the prevailing economic downturn, but he stressed that in the coming years the HKSAR government will focus on the optimal use of resources to implement the committed initiatives in an orderly and effective manner so that the public will see progressive improvements in public services and social infrastructure."
Expressing her support for the 2020-2021 budget, the third of the current-term HKSAR government, HKSAR Chief Executive Carrie Lam said she is confident that the "bold and substantive proposals" in the budget will help boost Hong Kong's efforts to combat the COVID-19 epidemic, take care of people in need and bolster the economy.
The counter-cyclical measures proposed in the budget "represent an unequivocal commitment by the government to rise to the challenge of overcoming adversity and helping people in need," Lam said in a statement on Wednesday afternoon. (1 Hong Kong dollar equals about 0.13 U.S. dollars)