Hong Kong – Transcript of remarks by FS at Budget press conference

     Following is the transcript of remarks by the Financial Secretary, Mr Paul Chan; the Secretary for Financial Services and the Treasury, Mr Christopher Hui; the Permanent Secretary for Financial Services and the Treasury (Treasury), Miss Cathy Chu; and the Government Economist, Mr Adolph Leung, at the Budget press conference at Central Government Offices, Tamar, today (February 22):
 
Reporter: Good afternoon, Mr Chan. Firstly, we want to ask the Government about its response towards the Jockey Club’s response towards the increase in the betting duty that is affecting its charity work. And then also we want to ask if the Government will review the betting duty in the long term and also perhaps the licensing conditions as well? The second question is we want to ask what is the Government’s plan to increase its revenue going forward, and also its plans to lower the deficits. Are there any specific measures that the Government is considering or will plan to roll out? And also we want to ask more on why did the Government settle on the $5,000 consumption voucher amount, and any response on the view that the consumption vouchers will only lead to an increase in short-term consumption and not any long-term boost to the economy? Thank you.
 
Financial Secretary: Thank you. About the special football betting duty, our proposal is to collect $2.4 billion annually from the Hong Kong Jockey Club in the next five years. This is a lump-sum special tax. In arriving at this amount, we took into consideration a number of factors, including the competitiveness of the betting industry of Hong Kong. We specifically asked, as I mentioned in the Budget, the Jockey Club not to reduce its donations to charitable organisations. They should keep it at that level or even, if possible, enhance it. By collecting this fixed sum from them for five years, we will be able to look more closely at the competitive environment that the industry is facing. At the end of the day, football betting is not just something unique to Hong Kong. People can do it through the casinos, say, for example, in the neighbouring cities. So in this area, the competitive environment is fast-changing. We would prefer imposing a fixed lump sum for a couple of years to allow us the opportunity to look at this more closely and decide on the next step.
 
     As to the increase in revenue, this year we have taken a very serious examination of the increase in salaries tax and profits tax, but eventually we decided not to do it. It is because over the past few years, people in Hong Kong and the SMEs (small and medium enterprises) had been suffering, and we want to give people more room, more breathing space, more opportunities to repair their own balance sheet. So raising salaries tax or profits tax has not been pursued. As to the other taxes, I think the community needs to have an informed debate, so that consensus could be built. We would not rule out that opportunity in the future, but for this year, we don’t think it is the right time to do it, particularly considering that the current term of Government is trying very hard to attract strategic businesses and talent to come to Hong Kong. So from a policy perspective, we should also avoid, at this juncture, any policy that would be contradictory to the objective of attracting businesses and talent to Hong Kong.
 
     Finally, on consumption vouchers, we are in the process of recovery, although at the initial stage. We are concerned that this recovery could be fragile in light of the external situation. We need to reinforce it and take into consideration that at the moment, some of our residents are still suffering from a lot of financial stress. Perhaps we should give a helping hand. Taking into consideration our fiscal situation, we decided that $5,000 is the best we can do. Thank you.

(Please also refer to the Chinese portion of the transcript.)