Consolidating Recovery

Economic Prospects: Cautiously Optimic

Economic outlook is cautiously optimistic.

Uncertainties and potential pitfalls remain in the external environment.

GDP forecast to grow 4-5% for 2010. Headline inflation forecast at 2.3%.Consolidated Account in 2010-11 forecast to incur a $25.2 billion deficit. Deficit expected to decrease

gradually in next few years, and achieve balance by 2013-14.

Fostering a Healthy Property Market

Number of completed

private residential units

will rise to 14,300 this year.

Estimated number of units

available in next three to

four years is 53,000.

Depending on market

conditions, the

government will put up

several urban residential

sites in the Application

List for sale by auction or

tender in the coming two

years if they have not been

triggered.

Liaise with the MTRC and

Urban Renewal Authority

to increase the supply of

small and medium-sized

residential flats.

Housing Authority will

actively explore means

to revitalise the secondary

market of Home Ownership

Scheme flats.

Raise stamp duty on

transactions of properties

valued over $20 million

from 3.75% to 4.25%.

Buyers will not be allowed

to defer stamp duty

payment.

Economic Development

Investing in Infrastructure

Promoting Development of Industries

Estimated capital works

expenditure will increase

to $49.6 billion.

Earmark $100 million to

support the Construction

Industry Council's efforts

to improve training and

related work.

Provide land resources,

human capital and

incentives to promote

the four traditional

pillar industries and the

six industries with clear

advantages.

Extend the stamp duty

concession in the trading

of exchange traded funds.

Extend concessionary

profits tax rate to cover

qualifying debt

instruments.

Allocate $41 million in

next two years to support

the work of the Hong Kong

Council for Testing and

Certification and the Hong

Kong Accreditation

Service.

Implement Hong Kong

Science Park Phase 3

development. Around

9,000 additional R&D and

construction jobs will be

created.

Extend profits tax

deductions to cover the

purchase of registered

trademarks, copyrights and

registered designs.

Allocate $7.9 billion to

implement remaining

works under Harbour Area

Treatment Scheme Stage

2A.

Set up a $300 million Pilot

Green Transport Fund, and

accelerate the tax

deduction for capital

expenditure on

environment-friendly

vehicles.

Provide $540 million

in subsidies for the

replacement of Euro II

diesel commercial vehicles.

Further regional co-

operation, complement the

National 12th Five-

Year Plan and enhance

exchanges and co-

operation with Taiwan.

Caring Society

Estimated recurrent expenditure on education, healthcare and social welfare will increase to $130 billion, or 56% of total government recurrent expenditure.

Developing Human Capital

Supporting Learning

Increase recurrent funding

for the School-based After-

school Learning and

Support Programmes to

$175 million.

Grant a full subsidy of

$1,300 or half subsidy of

$650 on Internet access

charges in the 2010

academic year for families

in need with children in

primary and secondary

schools. Complementary

services will be provided

through a non-profit

making organisation.

Allocate $1 billion for the

fifth round of the Matching

Grant Scheme for tertiary

institutions.

Inject $500 million into the

Language Fund to upgrade

proficiency in English and

Chinese.

Promoting Building Maintenance

Redeveloping Old Areas

Allocate an additional $500

million for "Operation

Building Bright" to help

owners maintain their

buildings, including

dilapidated buildings without

owners' corporations.

Urban Renewal Authority

will immediately take

forward a redevelopment

project near the collapsed

building in Ma Tau Wai

Road.

Promoting Culture and Sport

Fighting Drugs

Inject $3 billion into the

Arts and Sport Development

Fund as seed money.

Support the development

of the West Kowloon

Cultural District with an

additional $486 million

allocated over the next

five financial years for art

programme development,

including a $69 million

injection into the

Cantonese Opera

Development Fund.

Inject $3 billion into the

Beat Drugs Fund, and

allocate an additional $52

million in 2010-11 to

support anti-drug efforts.

Strengthening Public Healthcare

Provide an additional

$1.24 billion to the Hospital

Authority (HA) to

strengthen services

including:

- training of nurses

- services for cataract,

renal and cancer patients

- incorporating eight more

drugs into the HA Drug

Formulary and to expand

the clinical application

of nine drug classes.

38,200 patients will

benefit each year.

Allocate about $600 million

in the next three financial

years to strengthen

primary care services.

Allocate an additional $40

million to enhance drug

regulation.

Caring for the Needy

Raise recurrent funding by

$160 million to provide

over 1,000 additional

places in residential care

homes for the elderly.

Earmark $282 million in

the Lotteries Fund for pilot

schemes on home care for

the elderly and disabled as

well as a pilot Bought Place

Scheme for the disabled.

Provide additional

recurrent funding of $100

million to enhance services

for persons with disabilities.

Enhance medical and

community level support

for mental patients at a

cost of nearly $200 million.

Inject $200 million into the

Partnership Fund for the

Disadvantaged.

Suppoerting Job Seekers

Provide an additional $173 million to enhance employment services:

Launch a two-year Pilot

Employment Navigator

Program with 11,000

places per year.

Launch a program to

provide 12-month training

and internships for up to

500 young people with low

educational qualifications.

Relief Measures

Pay two months' rent for

public housing tenants at a

cost of $1.8 billion.

Provide one more month

of CSSA payment, Old Age

Allowance and Disability

Allowance at a cost of $1.8

billion.

Reduce 75% of salaries

tax and tax under personal

assessment for 2009-10,

capped at $6,000. This will

cost $4.5 billion.

Waive rates for 2010-11,

capped at $1,500 per quarter.

Ninety per cent of domestic

and 60% of non-domestic

properties will not need to

pay rates. This will cost $8.6

billion.

Waive the business

registration fee for one

year at a cost of $1.8 billion.

Provide a $1,000 allowance

to students receiving

CSSA or student financial

assistance. This will cost

$570 million.

ll figures are in HK dollars

(HK Edition 02/25/2010 page1)