Surplus Use Must Strike A Balance: FS

The Government must strike a balance between short-term relief measures, rebates and the long-term needs of the community in utilising an expected large surplus.

Financial Secretary Paul Chan made the statement today after appearing on a radio show, adding the surplus is largely due to substantial land premium income and stamp duty income.

“In utilising this surplus, I have to take into consideration the long-term needs of the community, the short-term pressing demand of the community as well as the aspiration of the people.”

However he said income may not be recurrent, so the Government has to be very careful.

As for long-term investment, Mr Chan said the innovation and technology sector is an area the Government will give serious consideration to.

“This will help across-the-board many industries in enhancing their competitiveness. And innovation and technology alone can be a substantial industry, bringing quality jobs for people.”

He said the Government will also need to use the surplus to prepare for the future because of Hong Kong’s ageing population.

As for short-term rebates, he said the guiding principle is to use such measures on a targeted basis, for people who are in need.

Mr Chan said following the implementation of the two-tier tax system in Hong Kong, the profits tax regime has become quite competitive regionally and he has no plans for an across-the-board tax cut.

Instead, he will consider targeted tax measures that will help a particular industry or encourage a particular behaviour which may benefit society or create jobs.