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HK ties up stimulus boost plan

(China Daily/Agencies)
Updated: 2009-05-27 08:08

The Hong Kong Special Administrative Region yesterday announced HK$16.8 billion of tax cuts, fee waivers and spending to shield people from a recession that's likely to be the worst on record.

The government could "do something further" if conditions worsen, its Financial Secretary John Tsang said at a briefing in the city yesterday.

Yesterday's measures, including waiving business registration fees, salary tax cuts and suspending two quarters of property rates, take stimulus and relief spending since 2008 to HK$87.6 billion, or about 5.2 percent of gross domestic product, Tsang said.

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"It's too little, too late," said Kevin Lai, an economist with Daiwa Institute of Research in Hong Kong. "The problems are hitting us now," he said, adding that a HK$40 billion package should have been announced yesterday.

A waiver on salary tax payments will be raised to HK$8,000 for 2008-09 from HK$6,000. Fees for business registrations and for entertainment and restaurant licenses will be dropped for a year. The government will waive property rates for two more quarters.

The financial secretary predicted that the second half of this year will be better than the first half and the city may return to economic growth in 2010.