Hong Kong to spend $50.8 million to boost businesses, image after pro-democracy protests

Hong Kong Financial Secretary John Tsang delivering the annual Hong Kong government Budget to the city's Legislative Council. -- PHOTO: EPA
Hong Kong Financial Secretary John Tsang delivering the annual Hong Kong government Budget to the city's Legislative Council. -- PHOTO: EPA

Hong Kong is spending HK$290 million (S$50.8 million) on measures to boost affected businesses and polish the city's image, following the 79-day Occupy movement that Financial Secretary John Tsang said may have dampened "investors' confidence in Hong Kong".

In the first annual Budget announced after the civil disobedience campaign - during which protesters blockaded major roads in their call for greater democracy - ended on Dec 15, Mr Tsang announced measures to help industries such as tourism, hotel, catering, retail and transport, which were affected "to varying degrees".

For instance, licence fees for travel agents, hotels and restaurants will be waived for six months.

And to "rebuild" Hong Kong's international image, the tourism board will be given an extra HK$80 million for promotional efforts.

Saying that prolonged political bickering "is detrimental to public administration and the international image of Hong Kong as a stable, law-abiding and efficient city", Mr Tsang added: "Such self-inflicted harm does not serve the city well."

The Occupy movement last autumn, which saw hundreds of thousands flooding the roads at its height, posed the most serious political crisis to Hong Kong since its 1997 handover to Chinese rule. It deeply polarised the city, with lines drawn between parents and children, students and businessmen.

While tourism numbers did not dip during that period, recent statistics suggest that there is some delayed fallout, with the number of mainland visitors during last week's Chinese New Year holiday dropping for the first time since 1997.

In his 90-minute speech in the Legislative Council, the financial secretary also announced one-off relief measures to cushion those affected by a slowing economy.

Taxes on salaries - or income tax - will be reduced by 75 per cent, subject to a ceiling of HK$20,000. This will benefit 1.82 million taxpayers and cost government coffers HK$15.8 million.

Taxes on profits - or corporate tax - will also be reduced by the same quantum of 75 per cent and with the same ceiling of HK$20,000. This will benefit 130,000 taxpayers and cost HK$1.9 billion.

Hong Kong's economy grew by 2.3 per cent last year - the third-consecutive year with a growth rate lower than the annual average of 3.9 per cent over the past decade.

Mr Tsang put this down to weakening trade due to the euro zone's slowing economy and Japan's relapse into recession.

He forecast that Hong Kong's economy will grow by by 1 per cent to 3 per cent this year.

xueying@sph.com.sg