More creative strategies are needed to secure the city’s long-term liquidity amid an ageing population and increased infrastructure spending
This provides fiscal space for the government to put money back in Hongkongers’ pockets. Marking the first adjustment to various tax allowances since the 2016/17 financial year, this move fully shows the government’s resolve and commitment.
Increasing the basic and married person’s allowances by 10 per cent helps shield the workforce from the cumulative inflation of the past decade. Additionally, doubling the ceiling of the one-off tax reduction to HK$3,000 per case offers further relief. Furthermore, raising the child allowance and additional deduction for newborns to HK$140,000 is a necessary signal to boost the fertility rate.
As some say, tax allowances are “easy to raise, hard to lower”, but these are justifiable investments in social stability.
But before we pop the champagne, we need a reality check. Today’s surplus offers only breathing room. We must not overlook the deeper structural elements and long-term trends facing our public finances.
