Hong Kong’s finance chief has defended plans for monthly fireworks shows that would cost HK$1 million each and are intended to entice tourists to stay longer in the city.
Responding to residents in a Cantonese televised phone-in programme on Thursday morning, including one who suggested focusing on big-name concerts instead, Paul Chan said having monthly fireworks displays and concerts were not “mutually exclusive,” and tourists could schedule their stays around the fireworks.
That would entice visitors to “stay an extra night,” he said.
Responding to a caller’s concerns over whether the novelty of the displays would wear off due to their frequency, Chan said it would depend on the way they were staged and this would be left to the Hong Kong Tourism Board.
The monthly fireworks are part of a broader HK$1.1 billion drive to promote “mega events” and boost tourism in Hong Kong. Each fireworks display would cost HK$1 million, Chan told reporters on Wednesday afternoon after presenting the 2024-25 budget.
Another caller, surnamed Cheung, told Chan he was dissatisfied with the plan to issue HK$120 billion in bonds for the 2024-25 fiscal year, saying: “In a few years, the bonds will have to be repaid… who’s going to clean up after the mess?”
Of the HK$120 billion, HK$70 billion will be retail bonds for small investors, while HK$50 billion would be Silver Bonds reserved for the elderly, and HK$20 billion worth of green bonds and infrastructure bonds.
Chan said on Thursday the bonds would not be used to finance the government’s recurrent spending but instead to “invest in the future.”
“Investing in the future yields returns,” Chan said. “Whether it’s in land supply or housing, or developing innovation and technology… [bond issuance] is a very normal fiscal arrangement.”
Stamp duties
Another caller, Yiu, said that withdrawing extra stamp duties on home purchases would only allow property owners to “maintain property value” and would not help the middle class buy their own homes.
See also: Hong Kong Budget 2024: Extra stamp duties axed in bid to revive housing market
Since 2010, authorities have imposed extra stamp duties to curb property speculation and prevent home prices from soaring. But the housing market has slumped over the past three years. Property sales plunged from around 74,000 units in 2021 to 43,002 last year, according to the Land Registry.
Chan said the government would keep an eye on the market and could reinstate the extra stamp duties at any time, adding that it would leave the matter to market forces under normal circumstances.
Chan said the government must “carefully consider” whether to introduce new taxes, as the city’s tax regime was one of its selling points for investors, and must consider Hong Kong’s international competitiveness.
“The government has to be prudent in its actions” amid a transforming economy and a complicated geopolitical situation, Chan said, adding that the government expected to break even in a few years. “There is no need to introduce new taxes at the moment.”
Chan announced on Wednesday that taxpayers whose net income exceeded HK$5 million would be subject to an increased tax rate of 16 per cent – from 15 per cent previously – on earnings over that amount.
Chair of the New People’s Party Regina Ip suggested on Wednesday that more tax brackets should be included . For instance, a higher tax rate could be imposed on earners with net annual income of more than HK$20 million, she told reporters.
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