The Hong Kong Special Administrative Region (HKSAR) government on Tuesday unveiled additional relief measures worth a total of 16.79 billion HK dollars (2.15 billion U.S. dollars).
"Economic indicators for the first quarter of this year published recently show that our economy is facing severe challenges," Financial Secretary John Tsang said upon announcing the new relief measures at a press conference.
Tsang said he put forward the measures because the economic situation turned out more challenging than what had been expected when he proposed the annual budget in February.
The sharper-than-expected global economic downturn and the threat of the influenza A/H1N1 both added to the economic uncertainties, the financial secretary added.
The principles in making the additional measures are to be forward-looking, observe fiscal discipline while trying to make the new measures simple and direct, "so that they can benefit the community as soon as possible," Tsang said.
The financial chief proposed waiving rates for the second half of this fiscal year, subject to a cap of 1,500 HK dollars (192 U.S. dollars) per quarter per tenement. This measure will cost 4.2 billion HK dollars (538 million U.S. dollars).
Tax reduction will be increased for all the 1.4 million tax payers. This measure was expected to cost 2.01 billion HK dollars (258 million U.S. dollars).
Other measures include public housing rental cuts, one-off extra allowances, business registration fee waives and license fee exemption for the businesses directly hit by the financial crisis and the influenza A/H1N1.
Funds will also be allocated for supporting continuing education, fighting against the potential flu pandemic and enhancing community building activities, among others.
Tsang also earmarked additional funds for export credit insurance and loan guarantee schemes aimed at helping small and medium enterprises through the challenging times.
The HKSAR government will be increasing its total backup commitment for the small and medium enterprises loan guarantee scheme by 7.4 billion HK dollars, with an estimated additional default expenditure of 550 million HK dollars.
Another special loan guarantee scheme will also be expanded, with the level of government guarantee raised from 70 percent to 80 percent and the maximum loan for each enterprise from 6 million HK dollars (0.77 million U.S. dollars) to 12 million HK dollars (1. 53 million U.S. dollars).
With the latest round of relief measures, the total stimulus package since the budget last year will amount to 87.6 billion HK dollars (11.2 billion U.S. dollars), which represents about 5.2 percent of Hong Kong's gross domestic product, Tsang said.
Tsang said he will try to get the new package through the Legislative Council soon, adding that he expected the Hong Kong economy to fare better in the second half of 2009 than in the first half, while positive growths will not be seen until next year.
(Xinhua News Agency May 26, 2009)
