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| No.1 February, 2012 |
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Hong Kong releases its "best budget yet" |
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 February was welcomed in by the release of the 2012 Budget in Hong Kong. The fifth budget released by Financial Secretary John Tsang has been heralded by some as the best yet.
The budget focused on addressing issues related to people's livelihoods and tackling the current economic downturn and its release was met with a positive response.
Balance, prudence and sustainability are the principles that underlie the 2012-2013 Budget as expressed by the Financial Secretary. These principles are clearly exhibited throughout.
In line with these principles the new budget sought to fulfil three main objectives. The first was to ensure that the government have the necessary resources to fund new and existing policy initiatives, and, in particular, those set out in the Chief Executive's annual Policy Address.
Secondly, the budget strives to guarantee that adequate resources were set aside to support those in the community who are less well off.
Finally the main aim was to ensure the Government remains in a strong position to cope with any unforeseen shocks. This in particular was a crucial element of the budgetary deliberations this year, given the volatility of the global economic environment.
Following on from these objectives, 2012 has seen a budget that gives a salary tax reduction of 75% and an increase in personal tax allowances directly addressing the second objective.
This year's Budget has also seen a focus on developing small and medium size enterprises; this has included tax concessions and extending or expanding initiatives such as the loan guarantees.
The Government has also addressed the issue of high rental costs for the commercial property market by increasing the supply of commercial property sites. Further, it initiates to move government offices out of the central business district, which in turn will also help Hong Kong increase its competitiveness.
Spending on health care, social welfare and education have remained top priorities for 2012 with increases in these three areas up to HK$150 billion. This brings the total increase in expenditure on education, health care and social welfare up to 30-40 per cent over the last five years.
It is expected in the next financial year that social welfare spending will increase to HK$44 billion.
These increases reflect a balanced budget, one that looks not only to ensure economic stability in Hong Kong during a turbulent time globally, but also looks to provide for the people.
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