Welcome to Our Hong Kong 2021-22 Budget Summary

Hong Kong Budget 2021/22 Summary The 2021-22 Budget was announced by the Financial Secretary of Hong Kong, Mr. Paul Chan on Wednesday, 24 February 2021.

With the ongoing COVID-19 pandemic, the economy has yet to come out of recession. Despite this, the Financial Secretary delivered an optimistic economic outlook for the upcoming years. The most urgent task for the Government now is to contain the epidemic and press ahead with the vaccination programme to stimulate recovery.

This year’s Budget focuses on stabilising the economy and relieving people’s burden. It aims to alleviate the hardship and the epidemic through the introduction of counter-cyclical measures of over HKD120 billion. According to the Financial Secretary, the government will grasp the major directions and new trends of future development to strategically enhance policy steering, support measures and resources allocation in key areas. This will enable our industries to have a more dynamic, diverse and interactive development.

The Financial Secretary is also confident that in the medium term, Hong Kong will continue to benefit from the ongoing development of the Mainland and the shift in global economic gravity from West to East. Hong Kong can open up greater room for development by leveraging the advantages under the “One Country, Two Systems”, playing its unique role as a gateway and an intermediary, integrating into the new overall development of China. Hong Kong can also actively participate in the national dual circulation development strategy and seizing the opportunities brought by the development of Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Belt and Road (B&R) Initiative.

Considering the above factors and taking into account the catch-up growth that would follow the initial economic recovery this year, the Financial Secretary forecast that Hong Kong’s economy will grow by an average of 3.3 per cent per annum in real terms from 2022 to 2025.

Budget measures are summarised below:

 

Support Enterprises

  • Extend the application period of 100% guarantee low-interest loan for enterprises to the end of this year, raise loan ceiling to HKD6 million, extend repayment period and duration of principal moratorium
  • Reduce profits tax for 2020-21 assessment year by 100%, subject to a HKD10,000 ceiling
  • Provide rates concession for non-domestic properties in 2021-22, subject to a ceiling of HKD5,000 per quarter in first two quarters and HKD2,000 per quarter in remaining two quarters
  • Waive business registration fees for 2021-22
  • Continue to waive 75% of water and sewage charges of non-domestic households for 8 months, subject to a monthly ceiling of HKD20,000 and HKD12,500 respectively
  • Continue to grant 75% rental/fee concession for eligible Government properties/short-term tenancies and waivers for 6 months (100% concession for those closed at the Government’s request)

 

Support Employment

  • Launch the fourth tranche of Love Upgrading Special Scheme, provide more training options and online courses
  • Plan to expand the scope of Continuing Education Fund to include online courses
  • Allocate HKD6.6 billion to create around 30,000 time-limited jobs

 

Relieve People’s Hardship

  • Set Up a Special 100% Loan Guarantee for Individuals
    • Provide an extra financing option for the unemployed
    • Loan ceiling at HKD80,000. Application period of 6 months
    • Interest rate fixed at 1% per annum. Maximum repayment period of 5 years
    • Principal moratorium for the first 12 months. Offer reimbursement for interest paid after loans are repaid in full as scheduled
  • Reduce salaries tax and tax under personal assessment for 2020-21 assessment year by 100%, subject to a HKD10,000 ceiling
  • Provide rates concession for domestic properties in 2021-22, subject to a ceiling of HKD1,500 per quarter in first two quarters and HKD1,000 per quarter in remaining two quarters
  • Grant a subsidy of HKD1,000 to each residential electricity account
  • Provide an extra half-month allowance of standard CSSA payment, Old Age Allowance, Old Age Living Allowance or Disability Allowance. Similar arrangements will apply to Working Family Allowance and Individual-based Work Incentive Transport Subsidy
  • Pay examination fees for school candidates sitting for 2022 HKDSE Examination
  • Earmark HKD1 billion to subsidise drainage repair works in over 3,000 old buildings

 

Reviving the Economy

  • Electronic consumption vouchers
    • Issue HKD5,000 electronic consumption vouchers in instalments to each eligible Hong Kong permanent resident and new arrival aged 18 or above to facilitate and stimulate local consumption
  • Inject HKD1.5 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales, increase funding ceiling per enterprise to HKD6 million and extend its geographical coverage in phases
  • Allocate HKD375 million to Hong Kong Trade Development Council (HKTDC) to enhance its capability to organize online activities and to proceed with digitalization
  • Explore the use of HKTDC’s platforms to assist young business starters in promoting their original products
  • Develop the business version of the “iAM Smart” digital authentication platform

 

Support Tourism

  • Earmark HKD169 million to continue to take forward local cultural, heritage and creative tourism projects
  • Earmark HKD765 million to support Hong Kong Tourism Board (HKTB) in reviving the tourism industry
  • HKTB to conduct a comprehensive review of the positioning of Hong Kong’s tourism in the long run, formulate strategies to spur industry’s recovery
  • Consider reviving local group tours provided that public health can be safeguarded, allowing room for industry’s business operation
  • Discuss and work out Air Travel Bubble arrangement with suitable places

 

Stimulating the Economy – Financial Services

  • Issue no less than HKD24 billion of Silver Bond and no less than HKD15 billion of iBond this year. Lower the eligible age for Silver Bond subscription from 65 to 60
  • Issue green bonds totalling HKD175.5 billion within the next 5 years, and plan to issue retail green bonds
  • Roll out Green and Sustainable Finance Grant Scheme to subsidise expenses on bond issuance and external review services
  • Strive for the launch of Southbound Trading of Bond Connect within this year, and enhance the domestic Central Moneymarkets Unit
  • Provide subsidy for Real Estate Investment Trusts to list in Hong Kong
  • Launch a Pilot Insurance-linked Securities Grant Scheme to subsidise issuance costs
  • Provide subsidy for Open-ended Fund Companies to set up in or re-domicile to Hong Kong
  • Review tax arrangements relevant to family office business

 

Stimulating the Economy – Innovation and Technology

  • Earmark over HKD200 million to roll out “Knowing More About IT” Programme, subsidise primary schools to enhance students’ interests and knowledge in I&T and their applications through extra-curricular activities
  • Regularise the pilot scheme which subsidises students studying science and technology in local universities to enrol in short-term I&T related internships
  • Inject HKD9.5 billion into the Innovation and Technology Fund by two yearly instalments
  • Hong Kong Monetary Authority to consider enhancing its Fintech Supervisory Sandbox to reduce time for launching innovative financial products in the market
  • Press ahead with the development of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop
  • Continue to implement the Science Park expansion and Cyberport 5 development
  • Continue to support the development of 5G networks and applications
  • Commence progressively the operation of the first batch of about 20 R&D laboratories under the “InnoHK Research Clusters” in the first quarter of this year

 

Stimulating the Economy – Air Cargo Sector

  • With the expansion of the existing express air cargo terminal, the commissioning of a new premium logistics centre and the Three Runway System, annual cargo handling capacity of Hong Kong International Airport (HKIA) is expected to increase to some 9 million tonnes in 2024
  • Explore measures to facilitate trans-shipment through Hong Kong, so as to maintain Hong Kong’s competitive edge as an international air cargo hub
  • Redevelop the Air Mail Centre at HKIA to become operational by end 2027 at the earliest

 

Stimulating the Economy – Cultural and Creative Industries

  • Inject an additional HKD1 billion into the CreateSmart Initiative

 

Stimulating the Economy – Construction Industry

  • Enhance the professional skills of mid-tier managers in the Government and uplift their project delivery capability
  • Promote cost management culture to the industry
  • Continue to promote the Modular Integrated Construction (MiC) method and digitalisation of public works

 

Green City

  • Announce Hong Kong’s first roadmap on the popularisation of electric vehicles, measures include ceasing the new registration of fuel-propelled private cars in 2035 or earlier
  • Complete updated Clean Air Plan for Hong Kong by mid-2021
  • Earmark HKD1 billion to install small-scale renewable energy systems at government buildings and infrastructure
  • Earmark HKD150 million to conduct energy audits and install energy-saving appliances, free of charge, for social welfare NGOs
  • Inject HKD1 billion into Recycling Fund and extend the application period to 2027

 

Relieve Traffic Congestion

  • Increase the rate of each tax band for the first registration tax for private cars (including electric-private cars) by 15% and the vehicle licence fee by 30%
  • Transport Department to continue the studies on “Congestion Charging” and the Electric Road Pricing Pilot Scheme in Central

 

Quality Living

  • Earmark HKD500 million to enhance facilities in country parks
  • Earmark HKD55 million to enhance hiking trails in country parks
  • Earmark around HKD300 million to implement a five-year plan for upgrading football pitches
  • Continue to implement harbourfront enhancement works

 

Strengthen Healthcare System

  • Allocate HKD147 million to enhance mental health services
  • Continue to work with universities to upgrade and increase healthcare-related teaching facilities
  • Commence operation of 2 District Health Centres in the coming two years, and set up “DHC Expresses” in another 11 districts within this year
  • Press ahead with implementing the first 10-year Hospital Development Plan (HDP) and the planning of the second 10-year HDP

 

Caring and Inclusion

  • Elderly services: provide about 8,800 residential care places and about 2,800 subsidised daycare service places in the coming few years
  • Rehabilitation services: increase the number of places for on-site pre-school rehabilitation services to 10,000 in 2022/23 school year
  • Inject HKD1.1 billion into Lotteries Fund to ensure that feasibility studies for much-needed social welfare development projects can proceed as scheduled

 

Land and Housing

  • Potential land supply of 2021-22 Land Sale Programme, railway property development projects and private development/redevelopment projects expected to provide about 16,500 units. Another 3 commercial sites estimated to provide floor area of about 480,000 sqm
  • New development area projects and other development projects under planning expected to provide a total of over 860 hectares of brownfield sites in the New Territories which can be redeveloped for housing and other land use
  • Examine the feasibility of rezoning 5 commercial sites in Kowloon East for residential use, which are expected to provide about 5,800 private housing units in total
  • Review about 40 “Government, Institution or Community” sites with joint use potential and put forward development proposals this year
  • Introduce a pilot scheme in this quarter for charging land premium at “standard rates” to encourage redevelopment of industrial buildings

 

Housing Supply

  • Public housing: Estimated production in the five-year period from 2020-21 is about 101,400 units, comprising over 70,000 public rental housing/ Green Form Subsidised Home Ownership Scheme units, and over 30,000 subsidised sale units
  • Private housing: Estimated average annual production in the five-year period from 2021 is more than 18,000 units