1 / 37

2006-07 Budget

2006-07 Budget. Briefing for the Hong Kong Consular Corps. By the Government Economist and the Deputy Secretary for Financial Services and the Treasury. 22 February 2006. Chart 1. Economic performance. 9 quarters of above-trend growth Broad-based upturn

lawrence-sanders
Télécharger la présentation

2006-07 Budget

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2006-07 Budget Briefing for the Hong Kong Consular Corps By the Government Economist and the Deputy Secretary for Financial Services and the Treasury 22 February 2006

  2. Chart 1 Economic performance • 9 quarters of above-trend growth • Broad-based upturn • Trade, financial and producer services, and tourism are the bright spots • Construction still weak • Significant and broad-based job creation • Inflation creeping up but still benign

  3. Year-on-year rate of change in real terms (%) 20 15 10 7.6 1996-2005 trend growth 5 0 -5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2000 2001 2002 2003 2004 2005 Chart 2 Strong GDP growth through 2005

  4. Year-on-year rate of change in real terms (%) 25 20 15 10.7 Exports of goods 10 and services 5 0 -5 -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2000 2001 2002 2003 2004 2005 Chart 3 Double-digit export growth

  5. Year-on-year rate of change in real terms (%) 20 15 Private consumption 10 expenditure 7.5 Investment 5 3.7 0 -5 -10 -15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2000 2001 2002 2003 2004 2005 Chart 4 Domestic demand also played a role in recovery

  6. GDP growth led by trading and financial/professional services Chart 5

  7. Chart 6 Broad-based improvement in labour market • Improvements across all sectors, all age groups and all levels of education attainment • Long-term unemployment declining • Wages reversed decline and rising back • Earnings of lower-income families also improving

  8. Lower skilled jobs (106 000 or 43.5%) Others (4 000 or 1.5%) Managers and administrators (72 000 or 29.7%) Associate professionals (31 000 or 12.8%) Professionals (30 000 or 12.5%) Chart 7 240 000 jobs created since 2003 trough

  9. Percent Case number ('000) 9 60 Seasonally adjusted unemployment rate Unemployment CSSA cases 8 55 7 50 6 45 5 40 4 35 3 30 2 25 1 0 20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2001 2002 2003 2004 2005 Chart 8 Unemployment rate and unemployment CSSA cases

  10. Year-on-year rate of change (%) 5 4 Q1-Q3 Payroll per 3.5 person 3 engaged 2 1 0.6 Wages 0 -1 -2 -3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2000 2001 2002 2003 2004 2005 Chart 9 Labour income rising back as labour market improves

  11. % of GDP 100 Other services (e.g. retail trade, catering, residential 80 real estate development) Community, social 60 and personal services Financial services 40 Professional services and other producer services 20 Trading and logistics 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 Chart 10 The rising share of services in HK's economy

  12. Chart 11 One out of three people in HK’s workforce are managerial, professional or administrative workers (*) Excluding FDH workers

  13. Employment by occupation category Chart 12

  14. Chart 13 Workers earning $5,000 – $8,999 down markedly … while those earning $15,000 or more rose Percent 100 20.7% $15,000 and above 31.8% 80 29.9% $9,000 - $14,999 60 30.5% 40 42.9% $5,000 - $8,999 32.1% 20 6.5% 5.7% Less than $5,000 0 Q3 Q3 1995 2005

  15. Chart 14 2006 Economic outlook • GDP growth to settle back to more sustainable growth of 4 - 5%, still above past 10-year trend of 3.9% • Another year of broad-based growth • But risks from external environment and feed-through of higher interest rates • Labour market to improve further • Inflation edging up but still healthy

  16. Chart 15 Economy set for still solid growth in 2006 Rate of change in real terms (%) 12 10 GDP 8 10-year 6 trend growth (1996-2005) 4 - 5% 4 2 0 -2 -4 -6 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006* (Forecast) (*) Mid point of the range forecast.

  17. Rate of change (%) 8 6 4 Composite CPI 2.3 2 0 -2 -4 -6 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (Forecast) Chart 16 Inflation creeping up but low in 2006

  18. Chart 17 2005-06 Budget Revised Estimate • Consolidated surplus : $4.1 billion • Operating surplus : $5.8 billion • Both Operating and Consolidated Accounts in surplus for first time since 1997-98 • Operating expenditure $2.2 billion less than 2004-05

  19. Chart 18 Fiscal Targets • Fiscal targets set two years ago for 2008-09 achieved three years early:

  20. Chart 19 Enhancing Our Economic Competitiveness • Economic co-operation with Mainland • Implementation of CEPA and Pan-PRD Agreement • Business environment • Review of Competition Policy • 38 recommendations by Economic and Employment Council adopted to cut red tape and streamline procedures

  21. Chart 20 Enhancing Our Economic Competitiveness • Business environment • Business Facilitation Advisory Committee to conduct in-depth reviews of licensing procedures for selected activities

  22. Chart 21 Enhancing Our Economic Competitiveness • Financial services • Expanding Renminbi business: a major development objective • Reduce SFC trading levy by 20%, saving $300 million a year • Legislation to strengthen regulation of listed corporations, and establish the Financial Reporting Council to supervise their auditors • Branding: Ideal platform for Mainland enterprises and funds to reach international market

  23. Chart 22 Enhancing Our Economic Competitiveness • Developing tourism • Total visitor arrivals over 23 million and receipts > $100 billion • Expand Individual Visit Scheme from 38 cities to 44 • Disneyland and Asia World-Expo open in 2005: Ngong Ping 360, Wetland Park, Dr Sun Yat-sen Museum and Ocean Park redevelopment yet to come • Cruise terminal

  24. Chart 23 Enhancing Our Economic Competitiveness • Developing logistics • Develop major cross-boundary linkages • Digital Trade and Transportation Network System • Attract more vessels to use port facilities • Gold depository at Hong Kong International Airport

  25. Chart 24 Enhancing Our Economic Competitiveness • Pooling of talent • Provide 1 800 additional university hostel places, at a cost of $350 million, for local and exchange students • “Quality Migrant Scheme” to attract overseas and Mainland talent

  26. Chart 25 Estimates of Expenditure 2006-07 • Total Government Expenditure $245.6 billion, of which >60% on Education, Social Welfare, Health and Security • Investing in Education • Expenditure of $56.5 billion • Additional $1.1 billion for Language Fund in total this year and next • Providing basic security net • Expenditure of $36.2 billion, of which 2/3 on CSSA/SSAS • About $100 million additional recurrent funding for disadvantaged • $230 million over five years to strengthen employment assistance and support social enterprises

  27. Chart 26 Estimates of Expenditure 2006-07 • Health • Increased recurrent funding over three years to strengthen HA’s financial position • Banning backyard poultry keeping and developing Preparedness Plan in line with WHO • Alternative Financing Arrangements for Healthcare under study

  28. Chart 27 Estimates of Expenditure 2006-07 • Infrastructure • Earmarking $29 billion a year for projects over next 5 years • Creating 14 000 construction jobs in 2006-07 • Major projects under planning to be accelerated: NLH connection to HZM Bridge; Tamar; Kai Tak; and Central-Wan Chai Bypass • Improved fiscal position allows additional funding if required • Civil Service • Down from 198 000 in 2000 to around 160 000 in March 2007 as scheduled

  29. Chart 28 “Green” Tax • Impose “green” taxes on tyres and plastic bags • Product Eco-responsibility Bill • Tyres: Impose a levy; require trade to recover and recycle • Plastic bags: Agree on reduction target with major supermarket chains and implement pilot scheme. For longer term, ban free distribution and tax them

  30. Chart 29 Goods and Services Tax • Broaden and stabilize revenue base • Announce detailed proposals and launch public consultation in mid 2006 • Relief and compensation to lessen impact (e.g. tourists, CSSA, other taxes)

  31. Chart 30 Salaries Tax Concessions • Share wealth with people where practicable: • Lower marginal rates: PresentProposed 2% 2% 8% 7% 14% 13% 20% 19% • 3/4 of taxpayers to benefit at cost of $1.5 billion a year • Extend limit for deduction for home loan interest from 7 years to 10, costing $1.2 billion in 2006-07

  32. Chart 31 Revenue profile in 2006-07 Salaries Tax, Personal Assessment and Property Tax (16.1%) $41.5B Profits Tax (27.5%) $70.7B Rates (6.0%) $15.4B Stamp Duties (5.8%) $14.8B Utilities, Fees and Charges (5.7%) $14.7B Land Premium (11.9%) $30.5B Properties and Investments (6.2%) $16.0B Other Capital Revenue (6.6%) $17.2B Betting Duty (4.6%) $11.9B Other Operating Revenue (3.9%) $10.0B Land Fund (3.1%) $8.0B Duties (2.6%) $6.6B Operating revenue (81.5%) $209.6B Government revenue Total : $257.3 Billion Capital revenue (18.5%) $47.7B

  33. Chart 32 Recurrent Government Expenditure by Policy Area Group

  34. Chart 33 Total Government Expenditure by Policy Area Group

  35. Chart 34 2006 Medium Range Forecast

  36. Chart 35 Surplus Forecast $ billion 40 30 20 10 0

  37. Chart 36 Thank you

More Related