Motion on “Appropriation Bill 2022” (2022.04.28)

MR CHAN KIN-POR (in Cantonese): Thank you, President. Over the past few years, Hong Kong’s economy has been beset by internal and external problems, and the Treasury has faced unprecedented challenges in terms of revenue. In particular, for the fight against the epidemic, the Government has injected a total of over $200 billion as relief. The unprecedented huge deficit in the Treasury has caused grave concern to the public.

The Budget has finally brought some good news. Given Hong Kong’s advantage of leveraging the Motherland, government revenue has resumed rapid growth. At the same time, the Financial Secretary has managed the finance effectively, and the measures introduced have yielded significant results. Consequently, the deficit of $100 billion originally expected for 2021-2022 has now turned into a surplus, which is $29 billion in the latest record. We can temporarily breathe a sigh of relief. As we all understand, it is only after the Treasury has turned the deficit into a surplus that the Government can afford to increase the amount of consumption vouchers to be disbursed to $10,000, thus bringing joy to everyone in society.

In my opinion, this year’s Budget has shown commitment and vigour. The biggest highlight is that it has proposed measures directed at both the epidemic and people’s livelihood, such as the consumption vouchers, tax deduction for rental expenses and increase in the transport subsidy. Besides, with a number of breakthroughs, the Budget is forward-looking and able to resolve the long-standing problems. For example, it has proposed reforming the rating system, developing innovation and technology and life and health technology, enhancing the quality of the labour force and striving for integration into the overall development of the country. All these are investments for the future which are of utmost importance to Hong Kong.

The disbursement of the $10,000 consumption vouchers was actually a pleasant surprise. After the launch of the vouchers, people all talked about how to use them. Many shops and restaurants were packed with people using the vouchers, creating a “voucher phenomenon” which made everyone happy despite the gloom of the epidemic. The consumption vouchers have produced such a great effect precisely because the measure is down-to-earth. Members of the public and shop operators can benefit directly. In the past, the Government had introduced many welfare or relief measures, but sometimes the implementation was detached from the real world, or even the measures were detached from reality. The public could not feel the Government’s good intention at all. As a result, although the Government had done a lot of work, it still failed to win the people’s heart in the end. Given the current financial stringency, the use of some $60 billion for the disbursement of consumption vouchers will put pressure on the Treasury, but it is definitely worthy of implementation. Moreover, the money will ultimately flow into the real market, which will be of tremendous help in stimulating the economy.

Another highlight of the Budget is the proposal to reform the rating system, changing it to a progressive system adopting the “affordable users pay” principle, which will lead to an increase of about $760 million in government revenue each year. Moreover, each person may apply for rates concession for only one domestic property, thus avoiding multiple concession and saving the Government $3.1 billion each year. Frankly, the amount of money is not very large, but it has great significance. Such a long-standing problem has all along existed in the rating system. Yet in the past, the Government turned a blind eye to it. On the one hand, the Government was worried that reform would provoke loads of criticisms. On the other hand, reform of the system would encounter great resistance. Traditionally, the Government always follows the procedures fully in doing everything. As time goes by, it has become rigid and may even use the system as an excuse for doing nothing. Constrained by such frameworks, reform is full of difficulties, resulting in the culture of “no work, no error”. This time the Financial Secretary has made a lot of efforts on the reform, spending more than a year on conducting plenty of research work. Some people say that if one has not done any research, one will not have the right to speak. Now that so much research has been conducted, there are sufficient justifications to take forward the reform. In fact, the Chief Executive candidate, Mr John LEE, has recently put forward the philosophy of being “result-oriented”, which I fully support. I sincerely hope that upon its assumption of office, the new Government can apply this philosophy to break the existing rigid mindset on procedures, so that reforms can be carried out without hindrance in the future.

Besides, the Budget has stressed again that Hong Kong must integrate into the overall development of the country, and proposed to step up efforts to attract foreign investment to Hong Kong, which I fully support. In fact, integration into the national development is the way which Hong Kong should go as a matter of course, taking Greater Bay Area (“GBA”) as an entry point, proactively exploring the Mainland market and participating in the domestic circulation of the national economy. This time the Government has proposed to set up a GBA Investment Fund, introduce the Support Scheme for Pursuing Development in the Mainland, issue more Renminbi (“RMB”) wealth management products, allow stocks traded via the Southbound Trading of Stock Connect to be denominated in RMB, enhance the Cross-boundary Wealth Management Connect Scheme in GBA, etc. However, I am all the more eager for expeditious resumption of cross-border travel because as long as cross-border travel is not resumed, all the current proposals will only remain empty talk. It is only when resumption of cross-border travel is confirmed that the Government can actually put into practice the work on promoting integration into the country.

As for stepping up efforts to attract foreign investment to Hong Kong, I have suggested strengthening promotion and publicity after the epidemic. This Budget will provide an additional provision of $90 million to strengthen InvestHK’s work and Hong Kong’s investment promotion network overseas after the epidemic. I have all along strived for the development of a headquarters economy in Hong Kong, with the aim of keeping Hong Kong international. To integrate into the national development of “dual circulation”, it is all the more necessary for Hong Kong to maintain its international competitiveness. Hence, it is imperative to continuously strive to attract international investors to Hong Kong.

Concerning the insurance industry, since most insurance intermediaries are self-employed, they are finally eligible under the new round of the Employment Support Scheme and the Temporary Unemployment Relief Scheme. It can be regarded as a kind of progress which deserves our thanks. As a matter of fact, insurance intermediaries need to conduct sales face-to-face, and it is difficult for them to do so under the epidemic. A large number of their clients have come from the Mainland to take out insurance policies in Hong Kong, but now their policies cannot be processed. The relevant business has come to a complete halt. Hence, even though the insurance intermediary sector is not as desolate as the tourism industry, it is no less miserable than the other industries supported by the Government, and it is still struggling hard.

In addition, in order to enable the insurance industry to recover as soon as possible after the epidemic, the industry hopes that cross-border travel can be resumed expeditiously and requests an increase in the tax deductions for voluntary health insurance scheme policy premiums, annuity premiums and Mandatory Provident Fund voluntary contributions. Regrettably, the Government did not give any positive response to my written question. The establishment of after-sales service centres in GBA has been agreed by all parties, but owing to the epidemic, the implementation details are yet to be discussed. Nevertheless, “fastness” may not always be the best. In my view, the operational details of the after-sales service centres need the consent and support of the Hong Kong Federation of Insurers. This is highly important because if the conditions are so undesirable that only a few insurance companies are willing to set up service centres, the original intent of this policy will be completely defeated.

This Budget is the last one of the current-term Government. Hong Kong’s economy has been plagued with difficulties in recent years. Being the “chief financial controller”, Financial Secretary Paul CHAN has to plan for the expenditure of each department, find ways to raise revenue and cut expenditure, and make proper planning for the economy in the future. His job is riddled with difficulties. To combat the epidemic, he also has to rack his brain to deploy resources to put forward the relief measures. During his current term of office, the Financial Secretary has been working tirelessly and diligently to do his best in every aspect of his work. I wish to express my sincere gratitude to the Financial Secretary for his contribution.

Thank you, President.

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