Financial Secretary Chen Maobo said in his blog today (18th) that under the economic downturn, it can be expected that the government's revenue will not be as good as expected, but the expenditure has increased, so the financial situation this year will be worse than expected. It is estimated that by 2022. FY23 will record a deficit of more than 100 billion yuan, much higher than the estimated 56.3 billion yuan in the budget at the beginning of this year. The edge of 800 billion yuan.
Chen Maobo pointed out in his blog today that the third quarter is coming to an end, and the local economy is still affected by the repeated epidemics, but the situation has stabilized slightly compared with the first half of the year.
The latest unemployment figures (June-August) will be released this week, and Chen Maobo expects the improvement to continue.
For industries that employ more low-level skilled workers (such as retail and catering, etc.), the employment situation has also improved significantly.
However, the overall economy has always been plagued by the epidemic and the weak external market. The value of commodity exports has shown negative growth. The stock market and property market are weak, and some enterprises or small and medium-sized businesses are still facing operating pressure.
Chen Maobo continued to point out that the earlier implementation of the moratorium on rent recovery played a key role as an "extraordinary measure in an extraordinary period", preventing the large-scale collapse of small and medium-sized enterprises during the worst period of the epidemic in Hong Kong.
Chen Maobo expects that the improvement in the unemployment rate can continue.
(Photo by Li Zetong)
After the moratorium on rent recovery ended at the end of July, the government strengthened the support of the "100% Guaranteed Concessional Loan Scheme" and "No Principal Repayment", including through the Monetary Authority and the Mortgage Corporation, to strengthen cooperation with banks and small and medium-sized enterprises. Communication with merchants and industry organizations to speed up the processing of corporate loan applications and improve efficiency.
In order to relieve the pressure on capital turnover of SMEs under the epidemic, the Budget announced at the beginning of the year to optimize the "100% guaranteed preferential loan", increase the loan amount of each enterprise to the sum of 27 months' rent and wages, and Raise the ceiling to 9 million yuan, relax the repayment period to a maximum of ten years, and extend the application period of the plan to the end of June 2023, so that enterprises can gradually control the epidemic, but the economy has not yet fully recovered. Get cash flow.
103 billion 100% guaranteed loans approved
Since the launch of the scheme in April 2020 to the end of August this year, about 55,000 applications have been approved for the 100% Special Guarantee Product, involving about $103 billion in loans, benefiting about 33,000 enterprises and involving about 350,000 employees.
Together with other relief measures, such as the concession of profits tax, rates, water and sewage charges, reduction of government properties and charges, and the introduction of consumer voucher schemes, etc., through different aspects to support enterprises and meet challenges, it is inevitable In the market competition, as far as possible, the enterprise can retain its strength and continue to operate.
After the moratorium on rent recovery ended at the end of July, the government strengthened the support of the "100% Guaranteed Concessional Loan Scheme" and "No Principal Repayment".
On the past Friday, the HKMA announced that the "interest repayment without principal repayment" scheme will be extended for three months from November to the end of January next year. ”, and its interest repayment and non-principal repayment arrangement is correspondingly extended to a maximum of 36 months in total.
On the same day, the government also announced a three-month extension to reduce rents or fees for government properties, short-term land leases, etc., effective from October to the end of December.
During this period, the Government will conduct a comprehensive review of these support and relief measures and study suitable follow-up arrangements.
Chen Maobo: The financial situation this year will be worse than expected
Chen Maobo also pointed out that in the economic downturn, it can be expected that the government's revenue will not be as good as expected, but the expenditure has increased. In this case, the financial situation this year will be worse than expected. A deficit of more than 100 billion yuan, much higher than the 56.3 billion yuan estimated in the Budget at the beginning of this year.
If so, this will be the second-highest fiscal deficit in history, second only to the previous year's record deficit of 232.5 billion yuan, which means that the government's fiscal reserves may further fall to the edge of 800 billion yuan.
The deficit would be even worse if the 35 billion yuan in green bonds to be issued this year is not counted.
Since the beginning of this year, while the epidemic has hit the economy, central banks around the world have vigorously tightened monetary policy, which has seriously weakened the external economic momentum and also affected the local economic situation.
In view of the weaker-than-expected economic performance, the authorities have lowered their forecasts for Hong Kong's economic growth this year twice.
With exports, private consumption and fixed investment all worse than expected and a difficult operating environment, profits tax and salaries tax revenue for this financial year will be lower than estimated at the beginning of the year.
Chen Maobo pointed out that the land price income in the first five months of this year was 17.2 billion yuan, which was far from the annual budgeted income of 120 billion yuan.
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Stamp duty revenue about a third less than expected
In terms of stamp duty, the average daily turnover of Hong Kong stocks from April to August this year was 117 billion yuan, 26% lower than the same period last year; and the transaction volume of residential buildings in the first four months of this year also decreased by 37%.
Weakness in the stock and housing markets could cut stamp duty revenue this year by about a third less than expected.
The property market is weak. Chen Maobo pointed out that the land price income in the first five months of this year was 17.2 billion yuan, which is far from the budgeted income of 120 billion yuan for the whole year.
Past experience shows that when the property price is lowered, the adjustment of the land price will be greater.
When the economy is weak, the market demand for commercial land is also weak.
At the same time, developers' willingness to negotiate land premiums has also weakened significantly, and these factors will also affect land income.
Expenses have increased significantly while incomes have fallen.
In the face of the impact of the epidemic and the downward pressure on the economy, the authorities have been implementing counter-cyclical measures to mitigate the impact of the economic contraction and try their best to maintain market confidence in the outlook.
Taking into account the counter-cyclical measures totaling more than $170 billion in the Budget at the beginning of the year, this fiscal year is estimated to record a deficit of more than $56 billion. However, this figure does not include the subsequent $43 billion "2022 Insurance Plan". Employment” program, and the sixth round of measures of the “Anti-epidemic Fund”.
Profits tax and salaries tax for this financial year are lower than those estimated at the beginning of the year.
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In general, the decline in income and the increase in expenditure, coupled with the complex and volatile external political and economic environment, the global economic recovery process is still rugged, and the future economic prospects of Hong Kong are still full of challenges.
How to make good use of public funds to support grassroots citizens and the people's livelihood in order to stabilize the overall situation of society is one of the primary tasks in the short and medium term.
When introducing support measures, it is also necessary to take into account the soundness of public finances and the appropriateness of the use of public funds.
After all, financial resources are not unlimited. While adequate resources are allocated for the work that needs to be done, fiscal soundness and sustainability must be maintained in order to ensure economic security and maintain financial stability.
Chen Maobo pointed out that the second phase of consumer coupons issued on October 1 will inject more than 15 billion yuan of consumption power into the consumer market, playing a boosting and multiplier effect.
However, the key to economic improvement is that the epidemic is more controlled, and the convenience of cross-border travel is the core of restoring economic momentum.
The government continues to vigorously call on everyone to actively cooperate with vaccinations. It is to build a strong anti-epidemic barrier. This is the most effective way to protect yourself and protect the health of your relatives and friends. It also allows Hong Kong to have more space for economic activities and return to and from the outside world. Powerful growth.
Hong Kong's unemployment rate fell to 4.3% from May to July
