Today (December 21), the Business and Professionals Alliance for Hong Kong (BPA) met with the Financial Secretary Mr John Tsang Chun-wah. Also attending the meeting were representatives from the tourism, retail, catering and transport industries. At the meeting, BPA and industry representatives put forward a number of proposals to support, promote and expand Hong Kong’s economy. Initiatives put forward included introducing additional one-off grants; organising a series of comprehensive campaigns to attract tourists; establishing a tourism development fund; providing a licence fee holiday for travel agents, hotels and hostels, restaurants and hawkers; and granting a 300% tax reduction for costs incurred by enterprises on research and development (R&D), and design expenditure to stimulate the economy and support scientific innovation and development.
BPA Vice Chairman Mr Jeffrey Lam Kin-fung described 2016 as a year filled with challenges for the business sector given the uncertain economic outlook for Hong Kong due to sustained weakness in the global economy. Deterioration in prospects for Hong Kong’s tourism and retailing industries were also expected as a result of the stronger US dollar. Comparing the meeting’s efforts to save the economy as those akin to treating a sick patient, Mr Lam said, “BPA and business representatives considered various solutions in consultation with the Financial Secretary to work out an effective prescription for nursing our businesses back to good health. We must take early action to forestall further economic declines. If we hesitate or wait, this could seriously affect our ability to recover quickly and fully. ”
Participants made many constructive suggestions during the meeting. Dr Simon Kwok Siu-ming, Chairman of the Quality Tourism Services Association, pointed out that the fall in the number of customers were already beginning to take its toll on the tourism, retail and other related industries. He also noted that more than 15 listed companies in the retail and hospitality sectors had recently issued profit warnings. It was likely that the decline in retail and tourism consumption would have a much greater impact on small and medium enterprises (SMEs). To support the retail industry, he proposed a one-off grant for funding large-scale promotions aimed at attracting tourists from the Mainland and other markets. The grant would also be used to enhance Hong Kong’s image as a welcoming and hospitable destination.
Mr Joseph Chu, Advisor of the Federation of Hong Kong Watch Trades & Industries, suggested holding over the provisional tax. He said that as SMEs’ marginal profits were typically quite thin, a 30%-40% drop in sales could translate into a fall in marginal profits by more than 50%. Due to the historical nature of calculating provisional tax, it was expected that amounts payable could be quite high due to better economic conditions last year. Given the expected burden on businesses, he suggested a holding over of the provisional tax to alleviate cash flow issues that may beset retailers.
Mr Matthew Wong Leung-pak, Chairman of the Public Omnibus Operators Association, pointed out that there had been a double-digit decrease in local chartering and both long and short haul cross-border passenger services. Drivers had been forced to reduce hours worked because of the slump in demand. The continuing requirement for coaches to wait for more than one hour to cross the border had also compounded problems. As a result, tourists were put off from visiting Hong Kong, and undermine our reputation for efficiency. He called for the strengthening of communications between the HKSAR Government and the Mainland authorities on addressing border crossing issues. He also suggested establishing more channels and allocating additional manpower at border crossings to improve passenger flows.
Mr Stanley Lau Chin-ho, Honorary President of the Hong Kong Watch Manufacturers Association, pointed out that Hong Kong’s hospitable image had been damaged with episodes of hostile anti-Mainlander protests and campaigns, which in some instances led to the kicking of visitors’ luggage. He proposed raising publicity to educate local citizens, as well as stepping up law enforcement to eliminate such undesirable behaviors. He also suggested importing foreign labour to address manpower shortages faced by relevant industries.
Mr Michael Li Hon-shing, Executive Director of the Federation of Hong Kong Hotel Owners, urged the Government to set up a tourism bureau to oversee the long-term development of Hong Kong’s tourism industry. He said that lack of a dedicated bureau meant that Hong Kong’s tourism sector was at a distinct disadvantage compared to other jurisdictions in terms of strategic planning, resource allocation and cross-departmental coordination.
Mr Kelvin Yau Kam-wing, Chairman of the Institution of Dining Art, hoped that other than promoting creative culinary ideas as a means of attracting tourists the Food Truck Pilot Scheme would also showcase traditional Hong Kong fare such as Hong Kong style milk-tea, pineapple bun and fishballs.
Mr Michael Wu Siu-ying, Ex-officio Member of the Hong Kong Association of Travel Agents, suggested introducing online travel permits for e-passport holders in IVS cities on Mainland China to provide applicants the convenience of applying without having to be physically present at their place of origin. He also suggested lowering the airport tax from HKD150 to HKD100-120 to stimulate cross-boundary traffic.
BPA Chairman Mr Andrew Leung Kwan-yuen said that other than the proposals relating to the tourism, retailing and catering industries, the BPA had also raised the issue of inadequate capital investments by the private sector in scientific innovation. In this regard, he proposed introducing a 300% tax reduction for enterprise expenditure on R&D and design. He also proposed lowering property rates by 1 percentage point to 4%, as well as offering rates concession to all ratepayers for two quarters, subject to a ceiling of HKD 2,500 per quarter for each rateable tenement fiscal conditions permitting.
Mr Leung said that the meeting was held under a cordial and amicable atmosphere, and he believed Mr Tsang would consider the suggestions as raised by the BPA and other representatives.
Also attending the meeting were Mr. Philip Ma, Committee Member of the Hong Kong Retail Management Association; Ms Linda Choy, Vice President of Public Affairs of Hong Kong Disneyland; and Mr Alain Li, Regional Chief Executive of Richemont Asia Pacific.