Budget Will Consolidate Recovery says Financial Secretary

The Hong Kong Financial Secretary, Mr Henry Tang, unveiled his first Budget on March 10, saying it will give the community a respite, while helping to maintain the momentum of economic recovery. 

Presenting his Budget to the Hong Kong Legislative Council, Mr Tang paid tribute to the tenacity and resilience of the Hong Kong people. “When confronted with unexpected misfortune, we display determination and solidarity, and rise to the challenge through our quick wits, adaptability to change and our ability to seize the moment.”

Despite the challenges of SARS, Mr Tang pointed out that the Hong Kong economy had staged a rapid rebound to register GDP growth of 3.3% in real terms in 2003, up from 2.3% in 2002. “This clearly demonstrated the great advantage we have in leveraging on our special relationship with the Mainland while engaging the world at large,” he said.

Mr Tang foresees a more deeply seated and broadly based recovery in 2004, with GDP forecast to grow by 6% in real terms. Deflation should ease further and a trend GDP growth rate of 3.8% in real terms is forecast over the medium term. 

Aiding this growth in 2004 will be the ongoing implementation of the Mainland/Hong Kong Closer Economic Partnership Arrangement, increased tourist arrivals from the Mainland and solid growth in external trade, including strong performance of offshore trade and professional services exports.

“We envisage that CEPA will speed up our economic co-operation with the Mainland, particularly with the Pearl River Delta,” said Mr Tang. He emphasized Government support of CEPA and said Hong Kong has the potential to play a key role as a business platform for an expanded range of international businesses.

At the same time, the Hong Kong Special Administrative Region Government is committed to reinforcing Hong Kong’s status as a platform for the Mainland with the rest of the world and as the premier capital formation centre for the Mainland. 

Mr Tang said he was proposing no further increases in salaries taxes, profits tax or any other taxes in this year’s Budget. “This respite will allow the Hong Kong community and our enterprises to consolidate,” he said. “It will also create conditions favourable for a sustained economic recovery.”

The Hong Kong Financial Secretary stressed his belief that “our guiding principle in fostering economic development should be ‘market leads and government facilitates’.” 

He has earmarked HK$250 million to launch a DesignSmart initiative to nurture start-up design ventures, train manpower in design and branding and promote and honour design excellence. “We seek to instill in our industries high value-added, high intellectual property and creativity content,” he said.

The sum of HK$95 million will be dedicated to tourism promotion and training activities. The Tourism Orientation Programme will be extended for 2 years and studies carried to formulate a strategy for future tourism development.

The development of Lantau is deemed vital for Hong Kong’s future and Mr Tang said the next decade would see a focus on economic and infrastructural projects there. The Lantau Economic and Infrastructural Development Co-ordination Task Force will co-ordinate projects following the principles of sustainable development. 

Long-term, Mr Tang said it is important to promote Hong Kong’s economic restructuring, become more competitive and broaden and deepen its markets. Further economic improvement and investment will open up employment opportunities. 

“We have laid down a solid foundation for further improvement of the economy,” said the Hong Kong Financial Secretary. “Growth momentum is good, and our medium-term economic prospects remain upbeat.” 

The Hong Kong Chief Executive, Mr Tung Chee Hwa, described the budget as one that “fully reflects our policy direction, which is people-based governance, allowing the community some respite and the revitalization of our economy.” 

Top