The Legislative Council approved this year's Budget yesterday (April 30) through a show of hands, receiving majority support from lawmakers. Financial Secretary Paul Chan criticized the United States for ignoring World Trade Organization (WTO) rules and undermining the multilateral trade system. He noted that, amidst escalating global trade tensions, Hong Kong, as a small, outward-looking economy, cannot remain unaffected. However, with the continuous growth of the mainland economy, the government is implementing various policies to stimulate the economy and support businesses.
During the Budget review, Chan announced an estimated deficit of approximately HK$80.3 billion for the 2024/2025 financial year, lower than the revised budget of HK$87.2 billion, primarily due to increased revenue from stock stamp duties and lower-than-expected departmental expenditures. The latest mid-term fiscal forecasts indicate that both operating and non-operating deficits will narrow over the next five years.
Attracting More Trade and Business to the City
Chan stressed the need to recognize the new international economic landscape in light of U.S. bullying and protectionism. Maintaining Hong Kong's status as a zero-tariff free port and continuing to implement free trade policies is crucial for ensuring the smooth flow of goods, capital, and information. As a "super connector" and "super value adder," Hong Kong can seize opportunities and attract more trade and business activities.
Regarding the proposed border construction fee for private cars departing through land border crossings, Chan indicated that the government would take the concerns raised by lawmakers and the public seriously, particularly from frequent commuters between the two regions, before making a decision.
Adjustments to Departure Taxes
The budget proposal includes an increase in the passenger departure tax for flights from HK$120 to HK$200. Chan reiterated that this increase would have a minimal impact on overall travel expenses for passengers.
He emphasized that while taxes and ticket prices are factors in airport competitiveness, other elements such as geographical location, connectivity, network coverage, flight frequency, and punctuality are also critical. Hong Kong, as an international aviation hub, has consistently performed well, and this increase in departure tax will not diminish its competitive edge.
Embracing Technological Change
After the budget's third reading, Chan met with the media and highlighted measures aimed at strengthening economic momentum and enhancing fiscal integrity. He outlined strict controls on expenditure growth and plans for moderate revenue enhancement, all while ensuring the sustainability of public finances.
Chan acknowledged that every stage of development presents challenges. The new budget must navigate geopolitical shifts while also embracing opportunities created by technological change. He emphasized the need for collaboration in exploring and realizing these new opportunities to drive better development.
In this challenging era, Chan expressed confidence in Hong Kong's future, urging the effective use of the unique advantages of "one country, two systems" and the strategic positioning of "Three Centres and a Hub." He encouraged the simultaneous development of emerging and traditional industries, leveraging the resilience and adaptability of the Hong Kong people.
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