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The following is the "Letter to Hong Kong" on Budget 2010-11 by the Financial Secretary, Mr John C Tsang, broadcast on Radio Television Hong Kong this morning (March 7):
My Fellow Citizens,
It's been 10 days since I delivered my annual Budget. My third one so far...how time flies!
Two years ago, my first Budget was fortunate enough to have been met with a large surplus, and we shared the fruits of our economic success with the community. But the dark clouds of the global financial crisis were already gathering on the horizon then, and we had to prepare ourselves for the difficult times ahead.
This time last year, we were feeling the full force of the deepest global recession since the days of the Great Depression. The community confronted the crisis with determination and resilience.
Today, the storm clouds are parting and our economic outlook is brighter and more stable than in recent months. Unemployment is down and our economy is growing again. But the outlook remains uncertain and problems occurring in our traditional markets may cause difficulties for us in the latter part of the year. We need to stay alert.
In preparing this year's Budget, I listened to a lot of different opinions from the community about where our spending priorities should lie. Many of these issues have been given a great deal of play in the media. I am pleased to say that the Budget has been generally well received by the people of Hong Kong so far.
To strike the right balance in dividing up the fiscal pie, I set three main objectives for this Budget. They are: consolidating the recovery, promoting economic development and maintaining a caring society.
For the current fiscal year, we are now projecting a surplus of $13.8 billion against the original forecast deficit of HK$39.9 billion. This is certainly a welcome windfall, and I have shared this amount, and more, with the people in the form of one-off relief measures. These initiatives amount to some $20 billion, including tax breaks, subsidies and waivers.
All 1.4 million taxpayers will benefit from the salaries tax rebate. I have also proposed that the Government pay two months of rent for some 700,000 public housing tenants. Another proposal is to waive rates on all ratable properties subject to a ceiling of $1,500 per quarter for the next financial year. Recipients of Comprehensive Social Security Assistance (CSSA), Old Age Allowance (OAA) and Disability Allowance (DA) will receive an extra one-month allowance.
This will provide a financial cushion, at least in the short term, while the economic recovery continues to gain momentum. In the longer term, we will sharpen our city's competitiveness by promoting infrastructure development and clearing away obstacles so that various industries, particularly the four traditional pillar industries and the six new priority industries, can reach their full potential. This is the best way to create jobs and wealth and promote social mobility.
I firmly believe that education is the greatest equaliser for our next generation. I have set aside some $64 billion for education in the Budget this year. This is the largest single item in our list of expenditures.
For families with school children receiving CSSA and student financial assistance, I have proposed a subsidy to cover Internet access. We are also taking steps to assist these low-income families with a range of services making available to them computer hardware, software, backup services, technical support as well as parent education. In the digital age, the Internet is a basic learning tool. We need to bridge the divide and make these services available to those who would otherwise not be able to afford it. In addition, I have also increased funding to support school-based after-school learning activities for less well-off students giving them the necessary exposure to succeed in life.
On healthcare, I have allocated additional resources to increase the number of graduate nurses as well as enhance other services, including strengthening services for cancer, cataract and renal patients, providing a wider range of effective drugs and advanced technology, improving medication safety and strengthening mental health services.
To care for people into old age, we have two main strategies. One is to facilitate the elderly living at home. The other is to provide more places in residential care homes for those in need.
I have provided funds to cover additional residential care places for the elderly. I have also earmarked some $280 million for pilot schemes, covering home care for the elderly and the disabled, as well as a Bought Place Scheme for residential care homes for people with disabilities.
All together, education, healthcare and social welfare spending amount to some $130 billion this year, equivalent to 56 per cent of our total recurrent expenditure. This is a significant portion of our valuable resources.
The collapse of a residential building in Ma Tau Wai in January was a tragedy for our community. Our hearts go out to the relatives of those who died and to others who lost their homes and possessions. The incident has heightened concerns in the community about building safety and the Government has since stepped up monitoring of old buildings.
In the Budget, I allocated additional funding of $500 million for "Operation Building Bright" which was set up last year. The initiative provides one-stop assistance for the repair and maintenance of old buildings. I have also asked the Urban Renewal Authority to redevelop the 33 lots in the vicinity of the collapsed building in spear heading our urban renewal effort in the neighbourhood.
Friends, my Budget addresses a broad range of issues from equipping kids with the tools to succeed at school, to helping the elderly enjoy their latter years in comfort, and from providing short-term financial relief in difficult times to ensuring the long-term competitiveness of our city for the benefit of all. Let us work together in building a caring society in Hong Kong.
I wish you all a prosperous Year of the Tiger.
John Tsang
Ends/Sunday, March 7, 2010
Issued at HKT 09:25
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