2025-26 Hong Kong Budget

Innovation and Technology

  • $1 billion to establish the Hong Kong Artificial Intelligence Research and Development Institute
  • Host inaugural International Conference on Embodied AI Robot and International Young Scientist Forum on Artificial Intelligence
  • Host WIPO’s publication event of the top 100 science and technology clusters this year
  • $100 million earmarked to launch Pilot Manufacturing and Production Line Upgrade Support Scheme
  • Study streamlining vetting of licence applications for operating Low Earth Orbit satellites
  • HKEX to launch dedicated “TECH” channel to help prepare for listing applications


Finance

  • Improve vetting process and optimise thresholds for listing
  • Enhance the “board lot” system and issuance mechanism for structured products; increase position limits for key index derivatives
  • Explore enhancing preferential tax regimes for funds and single family offices
  • Host the Hong Kong Global Financial and Industry Summit and a flagship forum on fixed income and currencies
  • Extend pilot grant scheme on insurance-linked securities for 3 years
  • Implement linkage of faster payment systems with Mainland China



Shipping and Aviation

  • Propose provision of half-rate tax concessions to eligible commodity traders
  • Establish the Hong Kong Maritime and Port Development Board
  • $210 million to install the port community system for smart port development
  • Aviation Academy to expand training programmes to cover C919 aircraft-related subjects
  • Promote Hong Kong’s development into Asia’s first aircraft dismantling, parts recycling, processing and trading centre


Tourism

  • Allocate $1.23 billion to HKTB to pursue “tourism is everywhere” concept and implement Development Blueprint for Hong Kong’s Tourism Industry 2.0
  • Host Fragrant Hills Tourism Summit this April
  • Strategically attract sports events that can bring significant economic benefits in Hong Kong
  • Study to re-plan some waterfront and former pier sites in Kowloon into a new harbourfront landmark, including commercial and residential developments and a yacht club


Education and Talent

  • Launch a new round of Research Matching Grant Scheme, totalling $1.5 billion
  • Increase annual quota of Hong Kong PhD Fellowship Scheme to 400 places
  • Offer 4 000 short-term internship placements in policy bureaux and departments and public organisations in the coming year
  • Relax requirements for joining and increase allowance limit of the GBA Youth Employment Scheme
  • Organise the second “Global Talent Summit · Hong Kong” next year
  • Enhance the New Capital Investment Entrant Scheme


Green Development

  • InnoCentre in Kowloon Tong to become hub for GreenTech companies
  • $300 million subsidy scheme to support installing EV fast chargers
  • Provide tax exemptions for green methanol used for bunkering
  • Set a Sustainable Aviation Fuel (SAF) consumption target
  • $470 million for subsidising bus and taxi trades to switch to EVs
  • Extend the Pilot Green and Sustainable Finance Capacity Building Support Scheme to 2028


Northern Metropolis

  • $3.7 billion to expedite Phase 1 facilities of Hong Kong Park of Hetao Co-operation Zone
  • Start tendering work for large-scale land disposal
  • Complete re-zoning procedures for data facility cluster at Sandy Ridge
  • Take forward planning and design of various railway development projects


Land

  • About 13 700 units from 8 residential sites under the 2025/26 Land Sale Programme and various property developments
  • No commercial sites will be put on sale in the coming year
  • Make available land for around 80 000 private housing units in the coming 5 years


Housing

  • Total public housing supply to reach 190 000 units in the coming 5 years
  • Completion of over 17 000 private residential units annually in the coming 5 years.
  • Expected first-hand private residential unit supply around 107 000 for the next 3 to 4 years


Caring and Inclusive Community

  • Increase No. of Residential Care Service Vouchers for the Elderly to 6 000
  • Increase No. of Community Care Service Vouchers for the Elderly to 12 000
  • Additional annual provision of over $180 million to expand residential child care facilities, strengthen support for child abuse victims and their families
  • Additional 1 280 day community rehabilitation and home care service places for persons with disabilities
  • Regularise the Pilot Project on Enhancing Vocational Rehabilitation Services


Combat Illegal Betting

  • Explore with HKJC on regulating basketball betting to combat illegal gambling


And, following is a topline update on Hong Kong's economic performance and fiscal outlook:

Economic Performance in 2024

  • GDP growth: 2.5%
  • Unemployment rate: 3.1% (latest)
  • Headline inflation: 1.7%; underlying inflation 1.1%


Economic Prospects for 2025

  • GDP growth forecast: 2% to 3%
  • Headline inflation forecast: 1.8%; underlying inflation: 1.5%


Revenue and Expenditure

  • Total Government Revenue 2025-26: $659.4 billion

(Profits tax: $192.2b; Land premium: $21b; Stamp duties: $67.6b; Investment income: $51.8b; Salaries tax: $96.5b; Other revenue: $230.3b)

  • Total Government Expenditure 2025-26:$822.3 billion

(Social welfare: $139.1b; Health: $141b; Education: $112.4b; Infrastructure: $119.3b; Economic: $61b; Security: $69b; Environment and Food: $53.5b; Others (including community and external affairs): $127b

Consolidated deficit forecast 2024-25: $87.2 billion
Forecast consolidated deficit 2025-26: $67.0 billion
Fiscal reserves forecast to be $647.4 billion at end-March 2025
Fiscal reserves forecast to be $579.1 billion by end-March 2030

Initiatives
·        Enhanced fiscal consolidation programme

  • Strictly control expenditure, supplemented by increasing revenue
  • Maintain competitiveness of low and simple tax regime
  • Uphold “user pays” principle


·        Containing expenditure growth

  • Pay freeze for all personnel of executive authorities, civil servants and Members of LegCo, Judiciary and District Councils
  • Reduce civil service establishment by 2% each in 2026/27 and 2027/28
  • Adjust transport subsidy schemes


·        Increase revenue

  • Raise air passenger departure tax to $200
  • Impose application fee and raise visa fee under various talent and capital investor admission schemes
  • Review government tolls and fees for road users


·        Issue bonds to support expenditure on infrastructure works over next 5 years

 

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