Hong Kong has unveiled measures to create jobs and tackle the financial crisis. Here the Hong Kong Economic and Trade Office outlines key strategies for the HK SAR over the next 12 months.

The Government of the Hong Kong Special Administrative Region has announced its annual budget, highlighting a multi-pronged strategy to minimise the impact of the global financial crisis and secure Hong Kong’s economy over the long term.

The blueprint for Hong Kong’s finances over the next 12 months includes measures to tackle both immediate and longer term challenges by creating jobs, fostering economic development and building a caring community.

The budget will also boost government investment in a highly skilled workforce and strengthen Hong Kong’s position as a leading international financial centre.

The budget is a strong signal to trading partners – including Australia and New Zealand – that the Special Administrative Region remains Asia’s leading business hub.

Financial Secretary, Mr John C Tsang, announced details of the budget in an address to the Special Administrative Region’s Legislative Council on February 25, outlining plans for a Government spending package to stimulate Hong Kong’s economy.

"Being a small, open economy, Hong Kong will inevitably be hit by the turmoil and our economy will slide into recession,” Mr Tsang said. The budget follows a 2.5 percent contraction of Hong Kong’s economy in the fourth quarter of 2008, with GDP growing by 2.5 percent for the year as a whole. Current forecasts envisage a two percent to three percent decrease in GDP for 2009 –the first negative growth for a whole year since the Asian financial crisis in 1998.
"We will adopt counter-cyclical measures and government expenditure will exceed HK$300 billion (A$60 billion) next year.  This will help ease the pressure of economic contraction, boost domestic demand and increase employment opportunities.” Mr Tsang said.

Protecting and stimulating employment is a priority with a raft of measures outlined for the coming 12 months. These include an A$80 million package for more workforce training and job opportunities, A$28 million to help fresh graduates entering the job market this summer through a new internship programme and A$220 million plan to provide jobs across a range of sectors. These will create about 62,000 new jobs and internship opportunities.

To enhance the city’s overall competitiveness, the construction of new infrastructure links with Mainland China will be fast tracked, including the Hong Kong-Zhuhai-Macao Bridge, major rail links and boundary control points.

"We estimate that capital works expenditure for 2009-2010 will be as high as HK$39.3 billion (A$7.86 billion),” Mr Tsang said.

"Our annual capital works expenditure will be at a very high level over the next few years, and may reach HK$50 billion (A$10 billion).”

The budget will also see a strengthening of Hong Kong’s role as an international financial centre, with moves to improve the supervisory framework and enhance financial co-operation with emerging markets.

Building on Hong Kong’s growing services economy, this year’s budget will see substantial investment in developing human capital, promoting tourism, technology-based, creative and green industries.

Despite the economic downturn, the Hong Kong Government is committed to its long-term objective of building a caring community and a city of quality. Apart from record spending on key services such as education and health, the budget also accords special attention to heritage preservation and promoting green opportunities in public works projects. To ease the burden of the economic crisis on the public, the budget grants one-off revenue concessions including substantial cuts to income tax and rates, and, extending to March 2010, a freeze on Government fees and charges.