Special Loan To Help The Jobless

(To watch the 2021-22 Budget speech with sign language interpretation, click here.)

Financial Secretary Paul Chan suggested setting up a special loan scheme to support the unemployed, adding the Government will provide a total guarantee commitment of $15 billion.

Delivering his Budget speech at the Legislative Council today, Mr Chan said the prolonged economic downturn has plunged some people into financial difficulties.

The proposed Special 100% Loan Guarantee for Individuals Scheme will provide an extra financing option for the jobless, he added. The maximum loan amount per applicant is set at six times their average monthly income during employment, subject to a cap of $80,000.

There will be a principal moratorium for the first 12 months.  Afterwards, the principal and interest can be repaid over a period of up to five years with an interest rate fixed at 1% per annum. Applicants who have repaid loans in full as scheduled will be offered full reimbursement for the interest paid.

Mr Chan said the scheme’s application period will last for six months. Freelancers who provide proof of income loss may also apply for the loan.

One-off measures

He also introduced several one-off measures to alleviate the impact of the economic downturn on the public.

There will be a 100% cut in salaries tax and tax under personal assessment for the 2020-21 assessment year, subject to a ceiling of $10,000. The move will benefit 1.87 million taxpayers.

Rates concession will be available for domestic properties, subject to a $1,500 cap per quarter in the first two quarters of 2021-22 and a $1,000 cap per quarter in the remaining two quarters for each rateable property. This proposal is estimated to involve 2.95 million domestic properties.

In addition, over 2.7 million eligible residential households will receive a $1,000 subsidy for each electricity account.

For social security recipients, an extra half-month allowance will be offered. Similar arrangements will apply to the Working Family Allowance and Individual-based Work Incentive Transport Subsidy.

The Government will also pay examination fees for school candidates sitting for the 2022 Hong Kong Diploma of Secondary Education Examination.

Caring society

Mr Chan noted that amid the epidemic, the public are increasingly concerned about environmental hygiene issues such as misconnected or dilapidated building drainage pipes.

He will earmark $1 billion to subsidise owners of more than 3,000 old buildings with relatively low rateable values to carry out drainage repair or enhancement works.

On the welfare front, the finance chief said an additional recurrent funding of around $147 million will be set aside to enhance the Hospital Authority’s psychiatric services.

As the revenue for the Lotteries Fund has dropped substantially due to the epidemic, the Government will inject $1.1 billion into the fund to ensure the development of much-needed social welfare services premises can proceed as planned, Mr Chan added.