How will businesses benefit from the 2022 budget proposal?

The government increased by $10b the funding under the Hong Kong Growth Portfolio.

The Hong Kong government has allocated funds under its 2022/2023 budget to ease pressure on businesses, specifically small and medium-sized enterprises, support the sectors that will help the city’s economic growth, and improve manpower skills in the workforce.

In a speech delivered on 23 February, Financial Secretary Paul Chan raised the funding allocation to the Hong Kong Growth Portfolio, under the Future Fund, by $10b to promote investment in sectors that have good potential for contributing to the economy.

Of the amount, $5b will be used to establish the Strategic Tech Fund, which is a new investment fund, and $5b will be used to put up a Greater Bay Area (GBA) Investment Fund, which will focus on investment opportunities in the Guangdong-Hong Kong-Macao GBA.

As the government had invested more than $130b in promoting the development of innovation and technology (I&T) industry, Chan said they will allocate additional resources "to keep reinforcing the entire value chain and the I&T ecosystem.” 

The budget proposal includes allocating an additional $10b to further promote the development of life and health technology, providing $440m to boost support to the research and development activities of 16 state key laboratories and six Hong Kong Branches of Chinese National Engineering Research Centres in Hong Kong, doubling the subsidy under the Technology Start-up Support Scheme for Universities to $16m, and allocating $1.2b into the Construction Innovation and Technology Fund. 

To enhance I&T in the financial sector, Chan proposed allocating $10m to the Fintech Proof-of-Concept Subsidy Scheme “to launch a new round of the scheme this year.”

Chan allocated $1.26b to support and uplift the tourism industry, which was amongst the hardest hit sectors during the pandemic. The support includes giving incentives to develop and launch tourism products, sponsor training of practitioners, and support Hong Kong Tourism Board’s efforts to help recover the tourism sector.

"In light of fierce regional competition, we will get well prepared by providing additional resources for the promotion of cultural, heritage, and green tourism projects with Hong Kong characteristics, enhancing tourism promotion and rolling out enticing promotional offers in a timely manner to attract tourists from outside Hong Kong," Chan said.

Also tabled in the budget are tax concessions to encourage eligible family investment management entities, which will be managed by single-family offices, to improve the wealth management sector.

Aside from these, the financial secretary provided initiatives to enhance manpower skills which include:

• increasing recurrent allocation up to $400m to enhance the training of medical professionals,
• setting up 500 more designated places to provide subsidies for students to take self-financing undergraduate health programmes,
• allocating $10b to complete works for upgrading and increasing healthcare teaching facilities of universities to cope with about 900 additional healthcare training places,
• launching the Pilot Green and Sustainable Finance Capacity Building Support Scheme and Pilot Scheme on Training Subsidy for FinTech Practitioners for the training of professionals,
• earmarking $100m into the Cantonese Opera Development Fund to support the training of practitioners, and allocating $37m to provide professional training for conservators, 
• allocating $1b to the Construction Industry Council to support manpower training
• raising the subsidy ceiling of the Continuing Education Fund to $25,000 and removing the upper age limit.

"We may, by leveraging our advantages under 'one country, two systems,’ achieve coordinated development with our neighbouring cities in the GBA, thereby creating enormous business opportunities and ample room for Hong Kong's development," Chan said. 

For Chan, the government must create efforts to create land and nurture talent to ease land and manpower, which are major constraints in the market’s economic growth.

Read more: 2022 budget shows commitment to revive economy: PwC

"Doing so will not only make Hong Kong a better place in which to live and work but also enable us to scale new heights in economic development, thereby maintaining social stability,” he added.

With this, the Financial Secretary set aside $100b from the cumulative return of the Future Fund to put up a dedicated fund to speed up infrastructure development relating to land, housing and transportation within the Northern Metropolis.

The Northern Metropolis, which covers about 300 square kilometres in the north of Hong Kong, will be home to some 2.5 million people and offer 650,000 jobs, including 150,000 in the I&T sector, upon full development.