Rob Starr, Big4.com Staff Reporter

Jennifer Wong, Partner, KPMG China, recently complimented the Financial Secretary for Hong Kong on the new budget.

“This is the best budget John Tsang, the Financial Secretary has delivered during his term, as he has listened to the public’s views and addressed the issues related to people’s livelihoods, housing and inflation concerns.”

Wong welcomes the concessionary measures proposed for SMEs, including lifting the maximum loan guarantee ratio to 80 percent under the SME Financing Guarantee Scheme and lowering the annual guarantee fee to between 10 and 12 percent of the loan facility’ interest rate, as well as the new terms in the insurance policy offered by the Hong Kong Export Credit Insurance Corporation. All these measures could help to relieve the financial burden and increase the territory’s competitiveness, Wong notes.

“The other relief measures are basically within expectations, if not better,” Wong says. The Government has not awarded cash handouts this year, but has increased the 75% tax rebate for 2011/12 to HKD12,000 from HKD6,000; personal tax allowance will also rise to HKD120,000 after remaining unchanged for four years; this in turn will benefit many people, she explains.

The Financial Secretary has prepared a balanced budget with a small deficit of HKD3.4 billion for fiscal 2012/13. However, Wong points out the estimated HKD60 billion land revenue is too “aggressive” given this target could hardly be achieved in the past, and given expectations of challenging economic conditions in the year ahead.

Wong also notes that the government did not explicitly bring forward a discussion regarding the long standing structural issues in Hong Kong’s revenues, in particular to take into account a growing aging population.

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