Many needy ineligible for tax relief measures

The 2012/13 budget introduced on Wednesday by Financial Secretary John Tsang is coming under criticism over a perceived failure to help society's most vulnerable. Although promising tax rebates, waiving of rates and public housing rents, along with additional social security allowances, Tsang is being urged to add some cash to help those unable to benefit from the announced relief measures.

Tsang attended a phone-in show and the Legislative Council Finance Committee meeting on Thursday to receive comments a day after delivering the last budget of his term.

Many middle class citizens phoned in to thank him for providing tax rebates and higher tax allowances. Callers struck a common note, saying as members of the middle class they had felt neglected for many years. Some callers however, opposed additional monthly social security allowances for those who don't work, while some wanted a repeat of last year's cash payout.

A woman, saying she was a single-parent who lived in a partitioned unit wept over the phone. She said none of Tsang's relief measures benefit her, because she does not pay tax or live in public housing. Nor has she applied for social security because she insists on self-reliance.

Tsang replied that the government has increased the recurrent expenditure for various areas to benefit citizens. He pointed to the Community Care Fund, saying the fund can benefit many in need. He added that consideration is being given to absorbing some projects under the fund as permanent measures.

Tsang again cited opposition from society, political parties and accounting firms as the reason for not repeating the cash payout.

At the Finance Committee meeting, lawmakers criticized Tsang for ignoring those who cannot benefit from the relief measures.

The Democratic Party's Lee Wing-tat proposed a rent allowance for people living in partitioned and sub-divided units. His party colleague Fred Li suggested a cash payout at a time of huge surplus as this is the only way to benefit those who have nothing at all.

New People's Party lawmaker Regina Ip said that while the budget provided relief for the middle class, nothing was done for the most vulnerable. She added her support for a cash payout.

Joining other lawmakers, Ip blasted the inaccurate revenue forecasts year after year, questioning whether the financial secretary and his economists have been out of touch with the economic situation.

Accounting constituency lawmaker Paul Chan was puzzled by the big differences between the estimated and actual revenues from profits and salaries taxes, knowing that the timing of tax declarations is quite close to the time to draft the budget.

Tsang responded that rent allowance is a policy consideration involving the amount of expenditure and impact on the rent market.

Revenue forecasts are a rather difficult job, he said. The external economic environment is very volatile and the income of enterprises has very much to do with the external environment.

joseph@chinadailyhk.com

China Daily

(HK Edition 02/03/2012 page1)