Business

HK unveils expansionary budget with innovation push

HONG KONG: Hong Kong rolled out tax cuts, relief measures and capital spending in an expansionary budget yesterday, after the city racked up a hefty budget surplus, targeting investments in high-technology industries to help raise its competitiveness.

Financial Secretary Paul Chan unveiled measures to address economic challenges and longstanding livelihood strains in the former British colony, including a gaping wealth gap and high property prices.

Hong Kong posted a provisional budget surplus of HK$138 billion (S$23.3b) for the 2017/18 financial year and expects an overall surplus over the next five years, he said.

The economy also expanded 3.8 per cent last year - the fastest in six years - boosted by a buoyant property market, improved tourism and financial services.

Overall expenditure for 2018/19 will increase 17.6 per cent over the previous year to HK$557.9 billion in one of the most expansionary budgets in recent years, Mr Chan said.

More than HK$50 billion would be earmarked for "investing in the future", he said.

Mr Chan described the priorities as a "new fiscal philosophy" of forward-looking and strategic capital spending to help innovative and creative industries, including a start-up fund and investments in sectors such as fintech, biotechnology and artificial intelligence.

Despite this, the city has retained a sizeable war chest with fiscal reserves expected to eclipse the HK$1 trillion mark at the end of this month.

Hong Kong has long been seen to be lagging far behind the new industry push of rivals such as Singapore and the southern China tech hub of Shenzhen, home to Goliaths like Tencent Holdings and Huawei.

"The current-term government is ready to think out of the box and act proactively to open up new horizons for Hong Kong," Mr Chan said in a speech, as small groups of protesters outside the legislature demanded greater cash handouts, as well as more affordable housing and a more equitable pension scheme.- REUTERS

BUSINESS & FINANCE