Special Relief Measures

The 1999-2000 Budget has announced the following one-off special relief measures -

• Rebating 10% of salaries tax, profits tax and property tax assessed for 1997-98, returning $8.5 billion to taxpayers.
• Extending the special reduction in diesel duty from $2.89 per litre to $2 until 31 March 2000.
• Continuing to freeze most Government fees and charges, including water and sewage charges, clinic fees and immigration charges, until 30 September 1999.

Rates

• Bringing forward by one year the general revaluation of rateable values and from now on carrying out revaluations annually to better reflect up to date rentals.
• Allowing the overall Rates percentage charge to revert to 5% from 1 April 1999. Because of the generally lower rateable values resulting from the general revaluation, Rates on 80% of properties will still be lower in 1999-2000 than in 1998-99. Government rent payers will also benefit.
• In addition, providing a 50% concession on Rates payable in the July to September quarter, saving ratespayers $1.8 billion.

Other Measures to Benefit the Community

• Deferring the payment of stamp duty on residential property transactions until execution of the assignment.

Helping Business

• Issuing new three-year business registration certificates at a cost of $5,200, as an option to the present one-year certificates which cost $2,000.
• Halving re-export declaration charge from 0.05% to 0.025%.
• Reducing significantly the maximum levels of shipping registration fees and annual tonnage charges.
• Exempting life insurance proceeds from estate duty irrespective of where these are paid.
• Exempting same-day transit passengers from paying Air Passenger Departure Tax.
• Introducing specific tax concessions to promote the development of the local debt and securities markets.

Revenue Raising Measures

After careful consideration, we have decided to implement the following revenue raising measures to reduce the fiscal deficit, while minimising the impacts on the public -

• Adjust stamp duty rates and banding on property transactions as follows -

 

Purchase Consideration	Duty Rate
	Present	Proposed
Up to $1,000,000	$100	No Change
From $1,000,001 to $2,000,000	0.75%
From $2,000,001 to $3,000,000	1.5%
From $3,000,001 to $4,000,000	2%	2.25%
From $4,000,001 to $6,000,000	2.75%	3%
Above $6,000,000	2.75%	3.75%


 
• Increasing the betting duty on Mark Six lotteries from 20 % to 25% and, in the new racing season, increasing the duty on exotic bets on horse races from 18% to 19%.
• Increasing the Cross Harbour Tunnel tolls for private cars (excluding taxis) and motorcycles to $20 and $8 respectively from 1 September 1999, and abolishing the present tunnel tax. Toll levels for other vehicles remain unchanged.
• Increasing the Lion Rock Tunnel toll from $6 to $8.
• Increasing the maximum on-street parking meter charge from $2 to $4 for every 15 minutes.
• Increasing the fixed penalties for traffic-related offences in line with inflation.

In 1999-2000, we will provide new or improved services through additional resources as well as savings achieved from productivity gains under the Enhanced Productivity Programme.

Education

• 15 new secondary schools, and 31 more whole-day primary schools.
• Over 100 IT co-ordinators to enhance the use of information technology.
• Upgrade 1,640 more teacher posts for primary schools to graduate status.
• 170 additional primary school teachers to enhance library services and implement Reading Schemes.
• Over 40 additional Student Guidance Teachers in primary schools.

Health

• 973 additional hospital beds.
• 1,300 additional cataract surgery operations a year.
• Shorter waiting times for first appointments in specialist out-patient clinics.
• 62 additional staff to strengthen the control and prevention of infectious diseases.
• 53 additional staff to enhance food safety control and control of imported and local livestock and poultry.
• A new general out-patient clinic and a skin clinic.
• Additional support for the regulation, use and trading of traditional Chinese medicines.

Social Welfare

• Meet increase in demand under the various social security schemes.
• 240 additional residential places and 290 additional day places for people with a disability; and 30 additional pre-school places for children with a disability.
• 1,765 more day nursery places.
• 48 additional integrated child care centre places.

Caring for the Elderly

• 2,467 additional residential places.
• More elderly in residential care to receive a dementia supplement.
• 14 more social centres, 2 day-care centres, 4 multi-service centres and 4 dedicated support teams for the elderly.
• 6 integrated elderly health centres, 6 visiting health teams and 40 geriatric day places.

Security

• 245 additional police officers to strengthen operational front-line capability in the maintenance of law and order.
• 183 additional firemen to enhance fire fighting capabilities and improve building fire safety and control of dangerous goods.
• 148 additional staff in Immigration Department to reinforce visa control and right of abode processing capabilities.
• 49 additional ambulance staff to strengthen emergency ambulance service.

Infrastructure

• $64 billion for West Rail.
• $24.76 billion for Route 10 - North Lantau to Yuen Long Highway.
• $3.42 billion for Stages 2 and 3 of West Kowloon drainage improvement.

The 1999-2000 Budget offers special relief for the community and provides incentives for businesses.

• Taxpayers will receive $8.5 billion through a one-off tax rebate.
• Ratepayers will pay $1.8 billion less as a result of a one-off Rates concession.
• Changes to business-related taxes and fees will help reduce operating costs.

Additional revenue will be raised to maintain a healthy fiscal position without causing unnecessary pain to the community.

In 1999-2000, total public expenditure will increase by 4.3%. Recurrent public expenditure will increase by 6.4% to $207 billion.

• Biggest share of spending is on education, amounting to $55.2 billion, an increase of 7.9%.
• Biggest increase in spending is on social welfare, by 13.7%, to $30.7 billion.
• Health spending to increase by 4.5% to $32.8 billion.
• Continued heavy investment in infrastructure.
• Over $65 billion of major public works projects to start in 1999-2000.

Hong Kong is committed to fiscal prudence. We will continue to maintain healthy reserves and live within our means. We will strive to keep the overall growth in government spending over time within the rate of economic growth, and continue to maintain a low tax policy.