2021-22 Budget Address highlights
Financial Secretary Paul Chan has unveiled HK$120 billion in counter cyclical measures in the 2021-22 Budget Address delivered on 24 February. It comes after a two year long economic recession, even as brighter prospects loom on the horizon. Despite a record deficit of HK$257.6 billion in the last financial year, the Financial Secretary expects GDP to rise between 3.5-5.5% in the year ahead against the backdrop of the territory’s ongoing vaccine rollout.
Among the numerous specific measures that were announced, the French Chamber selected five top highlights:
- HK$5,000 voucher to all permanent residents (aged 18 or above)
- Up-to HK$6 million low-interest loan available for SMEs with 100% guarantee by the Government
- HK$1bn invested in the CreateSmart Initiative for the advancement of creative industries
- 100% reduction in profits tax for enterprises for 2020-21 (up to a ceiling of HK$10,000)
- $9.5 billion for Innovation and Technology Fund in two instalments
- Waiver of business registration fees for 2021-22
For more information on the Budget, visit the official website:
2020 and 2021 numbers in a snapshot:
- Economic Performance in 2020 -
GDP growth: -6.1% - the worst recession ever for the SAR
Headline inflation: 0.3%
Underlying inflation: 1.3%
Unemployment (latest): 7% - double the rate of last year
- Economic Forecast for 2021 -
GDP growth: 3.5 – 5.5%
Headline inflation: 1.6%
Underlying inflation: 1%
Extended highlights
HK in 2020 and forecasts
- Second consecutive year of recession, record -6.1% percent GDP growth (consumption -10.1%, investment -11.5%)
- Unemployment up to 7% from 3.3%
- Sharp decline of exports (-0.3% for goods, -36.8% for services)
- HK expects between 3.5% and 5.5% growth in 2020, 3.3% average between 2022 and 2025
- Government Revenue (2021-22): $591.1bn, Government Expenditure (2021-22): 727.8bn
News from the pandemic
- Goal to vaccinate over half the population by end of year
Support enterprises
- Continuation of reduction in profit tax reduction by 100% (up to $10 000)
- Continuation of waiver of business registration fee
- Extension (in time and flexibility) of the Special 100% Guarantee Product (up to $6m)
- Extension of Pre-Approved Principal Payment Holiday Scheme
- Reduction of profit tax up to $10 000
Relieve hardships
- Reduction of salaries tax up to $10 000, extra special allowances
Stimulate the economy
- $5,000 e-vouchers for eligible permanent resident
- $375 million for HKTDC
- $934 million to support tourism
- $1.5 bn for the Dedicated Fund on Branding, Upgrading and Domestic Sales
Financial services
- Issue $24 billion in silver bonds and $15 billion in iBonds
- Issue green bonds totalling $175.5 billion over next five years
Innovation and technology
- $200 million for school IT programmes
- $9.5 billion for Innovation and Technology Fund
Creative industries
- $1 billion into CreateSmart Initiative
Green Initiatives
- Roadmap on popularisation of electric vehicles and increase in first registration tax bands for private cars by 15% and vehicle registration fee by 30%
- $555 million for Country Parks
- Additional $1bn to be injected in the Recycling Fund
