Budget pledge to create 60,000 jobs
26-02-2009
The Financial Secretary, John Tsang, has pledged to increase government spending to create more than 60,000 jobs and internships over the next three years, to combat the economic downturn. Delivering his budget in the Legislative Council, Mr Tsang also unveiled a series of tax and rate concessions. Spending is being increased despite forecasts that Hong Kong faces its worst recession for more than ten years, with the government expecting to record a deficit for at least the next five years. Mr Tsang said the economy would shrink by between two and three percent. He said the territory had slipped further into recession in the fourth quarter of 2008, with GDP falling 2.5 percent year-on-year "This once-in-a-century financial turmoil has spread from the financial markets to the real economy, leading to a synchronised global recession," Mr Tsang told legislators. "Being a small, open economy, Hong Kong will inevitably be hit by the turmoil." Despite reporting a HK$4.9 billion deficit for the past year, he pledged to boost government spending by nearly 20 percent to HK$301 billion to stimulate employment and ease the impact of the downturn. A total of HK$1.6 billion will be allocated for the creation of around 62,000 jobs. Most of this will be used to extend a subsidy scheme for residents of dilapidated buildings. Around 4,000 university graduates will be given internship opportunities in local and mainland firms, and the Labour Department will receive HK$400-million to increase subsidies to employers to hire middle-aged and disabled workers. Salaries tax will be cut -- at a cost of HKS4.1 billion -- with taxpayers enjoying a reduction of up to HK$6,000 in their next bill. Rates for homeowners will also be waived for two quarters -- at a cost of HK$4.2 billion.
