Financial Secretary Paul Chan today responded to questions concerning his 2021-22 Budget speech, such as the proposed consumption voucher scheme and increase in the stamp duty on stock transfers.
During a radio show this morning, the finance chief was asked if the Government would offer the public another option to receive cash instead.
Mr Chan stressed that the Government put forward the electronic voucher option after considering public views.
“On the consumption voucher (scheme), the idea is to try to encourage those spending in domestic shops within a short period of time. Over the past two days, we have been listening to views from members of the public.
“The policy consideration, in fact, this year is to try to use this money to help revive domestic consumption and the economy. That’s why we chose to use consumption vouchers instead.
“Please do acknowledge that the scope of spending is very wide. People can use it to go to markets, to go to fast food shops. So there are indeed very few restrictions as to the use of this consumption voucher.”
When responding to the question on why the Government decided to raise the stamp duty on stock transfers, Mr Chan said the decision is based on extensive research.
“For the stamp duty, we came to that conclusion with a very detailed assessment of the impact of this increase. On the one hand, in terms of competitiveness, we do think that (for) people investing in the Hong Kong market, if you look at the composition of the Hong Kong stock market in terms of the number of companies, over half (are) from the Mainland. In terms of market capitalisation, it is over 80%. In terms of daily turnover, it is over 90%.
“So people investing in this market are investing in the future of the Mainland economy. And with the Mainland economy rising up in the past decade, we have seen a trend of increasing asset allocation into this market. So if foreign institutional investors want to invest in Mainland stocks, Chinese stocks, Hong Kong or the Mainland is the major market that they can place their investments (in). And in that particular respect, we are a lot more competitive.
“So in terms of competitiveness, the increase in stamp duty won’t harm us.”
He stressed there are other aspects which are more important to market development.
“In order to develop our market, maintain our international financial centre status, it is important to make ourselves more competitive in terms of product offering, in terms of liquidity.
“So what is important is to expand the product offering and expand the liquidity to attract more investors.”