Category: MIL-OSI

Source: Hong Kong Government special administrative region – 4

     Following is a question by the Hon Chan Hak-kan and a written reply by the Secretary for Health, Professor Lo Chung-mau, in the Legislative Council today (February 25):

Question:

     On regulating alcohol consumption among adolescents, will the Government inform this Council:

(1) given that according to the Business Registration Ordinance (Cap. 310), every person carrying on a business in Hong Kong regardless of the mode of business must register his business within one month of commencement of business, while “business” required to be registered includes any form of trade, commerce, craftsmanship, profession, calling or other activity carried on for the purpose of gain; whether the Government has conducted random inspections to see if stores currently engaging in the sale of alcohol through online shopping and second-hand platforms have completed business registration; if so, of the details of the relevant random inspections;

(2) given that the Tobacco and Alcohol Control Office (TACO) of the Department of Health implemented the Dutiable Commodities (Amendment) Ordinance 2018 (the Ordinance) starting from November 30, 2018 to prohibit any person from selling and supplying intoxicating liquor to persons under the age of 18 in the course of business, of the respective details of the inspections and law enforcement actions (including the strength of the relevant law enforcement officers, the number of inspections conducted and the number of cases in which a fine was imposed) taken by TACO in stores and premises under the Ordinance in each of the past five years;

(3) given that the Ordinance stipulates that regarding the online sale of alcohol, if it is sold or supplied via remote distribution (e.g. in the form of SMS messages, group messages, websites, telephone or mail order), the prescribed notice must be displayed in a reasonably legible manner, or its contents must be read out or played as a sound recording; however, there are views pointing out that the aforesaid measures may not be able to prevent persons under the age of 18 from purchasing alcohol from online shopping platforms; of the respective numbers of law enforcement actions targeting online shopping platforms taken by TACO and numbers of cases in which a fine was imposed in each of the past five years; among such cases, the number of those found to have contravened the requirements of the aforesaid prescribed notice; whether the authorities have conducted decoy operations; if so, the relevant figures;

(4) whether the Government has studied the situation of alcohol abuse among adolescents in Hong Kong since the Ordinance came into operation; if it has studied, whether the number of cases involving alcohol abuse among adolescents has shown a downward trend; what measures the Government has put in place to address the situation of alcohol abuse among adolescents; and

(5) of the current alcohol consumption situation in Hong Kong; whether the Government has assessed if it has achieved the target of “at least 10 per cent relative reduction in the prevalence of binge drinking and harmful use of alcohol among adults and in the prevalence of drinking among youth by 2025” set out in the “Towards 2025: Strategy and Action Plan to Prevent and Control Non-communicable Diseases in Hong Kong”; if it has assessed and the target has been met, whether the Government will set new targets; if it has assessed and the target has not yet been met, whether it has plans to make improvements?

Reply:

President,

     According to the World Health Organization (WHO), harmful use of alcohol is a significant risk factor for more than 200 diseases, injuries and other health conditions. Harmful use of alcohol is associated with the risk of developing a range of health problems such as mental and behavioural disorders (including alcohol dependence), and major non-communicable diseases (NCDs) (e.g. liver cirrhosis and some cancers). In addition to health effects, harmful use of alcohol can place a heavy burden on individuals, families and the society. The WHO recommends that governments of various places should strengthen their responses to reduce alcohol-related harm for prevention and control of NCDs. Reducing alcohol-related harm is an important priority action area in the prevention and control of NCDs locally.

     In response to the Hon Chan Hak-kan’s question, the reply after consultation with the Financial Services and the Treasury Bureau and the Department of Health (DH) is as follows:

(1) Every person who carries on a business in Hong Kong, regardless of whether through a brick-and-mortar presence or the internet, is required to apply for business registration under the Business Registration Ordinance (Cap. 310) (BRO). The Inland Revenue Department (IRD) inspects the transactions carried out on the internet from time to time to ascertain the compliance with the BRO requirements. The IRD will examine details of the relevant transactions, including (i) the procurement, promotion, sales, and delivery of goods, (ii) the collection and payment of sales proceeds, and (iii) the purpose, scale, persistence and location of these transactions, to determine whether the relevant transactions constitute the carrying on of a business in Hong Kong.

     Under section 15(1)(c) of the BRO, any person who fails to apply for business registration for a business carried on by them in Hong Kong under the BRO commits an offence, and the maximum penalty is a fine of $5,000 and imprisonment for one year. Where any online activity (including a transaction of alcoholic products) constitutes carrying on a business in Hong Kong but the business has not yet been registered under the BRO, the IRD would remind the relevant person to apply for business registration for the business as soon as possible, and would initiate prosecution if necessary.

(2) Part 5 of the Dutiable Commodities (Liquor) Regulations (Cap. 109B) (the Regulations) prohibits the sale and supply of intoxicating liquor to minors in the course of business. According to the Regulations, a person must not, in the course of business, including face-to-face or remote distribution, sell or supply alcoholic beverages to a minor. The Regulations also require vendors who sell or supply intoxicating liquor through face-to-face distributions to display a prescribed notice complying with the Regulations in a prominent position at the premises in the course of business. Between 2021 and 2025, the Tobacco and Alcohol Control Office (TACO) of the DH conducted more than 78 000 inspections to check retailers’ compliance with the legal requirements mentioned above, and carried out investigations and enforcement actions upon receipt of intelligence or complaints. Over the same period, the TACO received 109 complaints regarding the sale or supply of intoxicating liquor to minors in the course of business. No violation was found upon plainclothes inspections and follow-up investigations. As for the requirement to display prescribed notices, the TACO issued 12 summonses to offenders, and nine of which resulted in convictions by the court, with fines ranging from $1,800 to $2,500.

     The number of inspections and the enforcement actions carried out by the TACO at shops and premises in accordance with the Regulations in the past five years is set out at Annex 1.

     The number of posts for frontline law enforcement officers in the approved establishment of the TACO is 125. Since the relevant law enforcement officers work on the alcohol and tobacco control initiatives at the same time, the manpower arrangements cannot be separately delineated.

(3) Any person who sells or supplies liquor to others by remote distribution must display or broadcast a prescribed notice stating that, under the law of Hong Kong, intoxicating liquor must not be sold or supplied to minors in the course of business. In addition, prior to the sale or supply, the seller or supplier must receive an age declaration from the purchaser or recipient. Provided that there are no circumstances giving rise to reasonable suspicion that the declaration is false, such declaration may serve as a defence in the event of prosecution. The TACO conducts online inspections and follows up on cases where non‑compliance with the above requirements are identified. Between 2021 and 2025, the TACO carried out over 2 600 online inspections and issued more than 600 advisory letters, with the vast majority of websites co-operating upon receiving the advisory letters. The number of inspections and enforcement actions carried out by the TACO against online shopping platforms in accordance with the Regulations in the past five years is set out at Annex 2.

     As regards covert enforcement operations (commonly known as “sting operations”), the personnel involved must be relevant appointed law enforcement officers. They are subject to strict rules and regulations, and are also required to undergo training, thereby understanding the legal boundaries and are capable of handling unexpected situations. Given that the offences currently regulated by the Regulations concern acts directed at minors, the use of “sting operations” is considered inappropriate. The DH encourages members of the public to provide information to the TACO, which will then conduct inspections and take enforcement actions upon receiving intelligence or complaints.

(4) and (5) The Government promulgated, in 2018, the Strategy and Action Plan to Prevent and Control Non-communicable Diseases in Hong Kong (SAP), with a focus on NCDs and their common behavioural risk factors (such as harmful use of alcohol, unhealthy diet and physical inactivity), to comprehensively promote a healthy lifestyle. One of the targets of the SAP is at least 10 per cent relative reduction in the prevalence of binge drinking and harmful use of alcohol (viz. harmful drinking/alcohol dependence) among adults and in the prevalence of drinking among youth by 2025. 

     Currently, regular surveys targeting students from upper primary to post-secondary levels are conducted by the Narcotics Division (ND) of the Security Bureau (SB) to collect information on alcohol drinking, smoking and drug use among young people. According to the Survey of Drug Use among Students by the ND of the SB, since the Dutiable Commodities (Amendment) Ordinance 2018 took effect in 2018, the prevalence of drinking among young people shows a downward trend; and the relevant target of the prevalence of drinking among youth as stated in the SAP has been achieved. The relevant statistics are shown in the table below:
 

SAP indicator related to reducing the prevalence of drinking among youth (note 1)	Year 2011/12	Year 2014/15	Year 2017/18	Year 2020/21	Year 2023/24
Ever drinking	56.0%	56.2%	56.7%	47.5%	40.4%
12-month drinking	41.0%	41.3%	42.3%	32.8%	27.9%
30-day drinking	18.4%	20.2%	21.2%	16.7%	14.3%

Note 1：Including primary four to six students, secondary one to six students and post-secondary students
Source：Survey of Drug Use among Students conducted by the ND of the SB

     In addition, the DH conducts a Population Health Survey (PHS) approximately every five years, with the Health Behaviour Survey (HBS) conducted in between to understand the health status and health-related behaviours of the Hong Kong population, including drinking behaviours. According to the HBS 2023 conducted by the DH, the age-standardised prevalence of binge drinking (i.e. drinking at least five cans of beers, five glasses of table wine or five pegs of spirits on a single occasion) at least monthly among adults (aged 18 years or above) increased when compared to the baseline figures of the PHS 2014/15, while remaining at a low level. According to the 2019 worldwide statistics from the WHO, 17 per cent of people aged 15 years or above engaged in heavy episodic drinking or “binge drinking” on one or more occasions in the last month. Comparatively, Hong Kong’s statistics on binge drinking is relatively lower. The statistics on binge drinking in Hong Kong are shown in the table below:
 

SAP indicator related to reducing the harmful use of alcohol	PHS 2014/15	PHS 2020-22	HBS 2023
Age-standardised prevalence of binge drinking (note 2) at least monthly among adults (aged 18 years or above)	2.4%	2.2%	2.9%

Note 2：Binge drinking is defined as drinking at least 5 cans of beers, 5 glasses of table wine or 5 pegs of spirits on a single occasion.

     The PHS 2025/26 commenced last September and the findings are expected to be available in late 2026. The Government will use the relevant data to review the targets and outcomes of the SAP.

     Under the SAP, the Government adopts a multi-pronged approach, comprising publicity and education, law enforcement, promotion of alcohol screening, etc, to reduce alcohol-related harm. The relevant initiatives include: 

(i) The DH has launched a publicity and education campaign named “Understanding Alcohol Harm” since 2022 to enhance the public’s understanding of the health risks associated with alcohol consumption through various channels. Through a website, the DH disseminates information on alcohol-related harm to the public, and provides online risk assessment of drinking behaviour, personalised health advice, self-help tools, health education resources, etc, to encourage drinkers to change their drinking behaviour for the sake of their health. 

(ii) The DH recommends the Alcohol Screening and Brief Intervention (A-SBI) tool to primary healthcare service providers, including organisation of online training for the staff of the District Health Centres (DHCs) and District Health Centre Expresses (DHC Expresses) to encourage regular use of the A-SBI tool for early identification and management of at-risk drinkers, as well as arranging referral for those with probable alcohol dependence. DHCs and DHC Expresses provide primary healthcare services to citizens, including the Life Course Preventive Care Plan, which is an evidence-based and comprehensive health strategy that emphasises prevention and personalised needs. It provides guidance on the health needs of citizens across different life stages and assists citizens in developing a healthy lifestyle, including early identification and intervention of high-risk drinking behaviours through health risk assessment and providing alcohol abuse prevention advice, with a view to enhancing the overall health of the Hong Kong citizens.

(iii) The DH has also launched the Pilot Alcohol Cessation Counselling Service (Pilot Programme) through subvention to a non-governmental organisation. The Pilot Programme was launched on April 8, 2024, and will last for two years to provide free counselling service for Hong Kong residents identified to have probable alcohol dependence. The service comprises three components, namely initial assessment, evidence-based individual counselling intervention, and subsequent evaluation follow-up.

(iv) Targeting the situation of alcohol use among young people, the DH has been enforcing the Dutiable Commodities (Amendment) Regulation 2018 since 2018 to prevent youth access to alcohol. Apart from this, the DH has also launched the “Young and Alcohol Free” campaign since 2016 to step up efforts to combat underage drinking and protect young people from the harm that alcohol may bring. The activities included the development of health education resources, the launch of Announcements in the Public Interest (APIs) targeting young people, and collaboration with groups and non-governmental organisations serving youth to provide training to trainers, as well as assistance in organising relevant health education activities to further disseminate relevant messages to young people in the community. To echo the launch of the new APIs and posters, the latest round of the promotional campaign was launched in 2025 and was promoted through social media, residential building lobby TV display network, public transport, venues under the DH and other government departments to enhance coverage and reach.

     The DH will continue to reduce alcohol-related harm through various means and will closely monitor local alcohol consumption situation through periodic surveys. 

Source: Hong Kong Information Services

Financial Secretary Paul Chan today said the Government has earmarked resources for support work after the Tai Po fire and for community care, such as increasing the number of vouchers under two elderly care service schemes.

Delivering his 2026-27 Budget today, Mr Chan said the Government has provided comprehensive support for people affected by the Tai Po fire.

He added that the Government has just announced the long-term housing arrangements and earmarked $4 billion accordingly.

The Government also proposed to allocate $300 million to the Urban Renewal Authority to launch an enhanced version of “Smart Tender” in the second half of this year, and to provide subsidies to encourage owners to utilise the scheme’s paid services to reduce the risk of bid-rigging in building repair works. 

Mr Chan also noted that the Government will earmark $3 billion for the Development Bureau to conduct a comprehensive review of Operation Building Bright 2.0 to draw up a new subsidy scheme.

Furthermore, the Government will allocate $1 billion to extend the Lift Modernisation Subsidy Scheme.

Beginning in the next financial year, the Government will increase the number of Community Care Service Vouchers for the Elderly by 4,000 to 16,000 and the number of Residential Care Service Vouchers for the Elderly by 1,000 to 7,000, with estimated full-year expenditures of $1.2 billion and $1.97 billion respectively.

Meanwhile, the Elderly Health Care Voucher Pilot Reward Scheme will be extended by two years until end 2028.

Elderly persons who have accumulated voucher spending of $1,000 or above within the same year on specific primary healthcare services, such as examinations and chronic disease management, are eligible for a $500 voucher reward. Mr Chan said the measure will involve an additional expenditure of about $1 billion.

The Government will also implement new arrangements for portable cash assistance in the middle of this year, under which elderly participants of the Guangdong Scheme, Fujian Scheme and Portable Comprehensive Social Security Assistance Scheme may opt to receive government assistance directly through their accounts with designated Mainland banks.

Regarding support for youth, the Financial Secretary said the Government will introduce a new media thematic internship programme in the Mainland and allocate an additional $60 million toward implementing the Funding Scheme for International Youth Exchange under the Home & Youth Affairs Bureau continuously.

The Government will also provide around 3,600 short term internship placements in government departments and public bodies for post-secondary students.

Mr Chan also announced that the annual funding for the Women Empowerment Fund will be increased to $30 million from the next financial year.

To support persons with disabilities, the Government will enhance rehabilitation services by providing about 450 additional places for day, residential and pre-school services in the next financial year, involving an additional annual expenditure of about $107 million. 

For school children receiving On-site Pre-school Rehabilitation Services, the Government will provide bridging and support services during their first term in primary school, involving an additional annual expenditure of about $260 million.

Meanwhile, the provision for the Re-employment Allowance Pilot Scheme will be increased to $222 million in the coming financial year.

Regarding healthcare service enhancements, Mr Chan said the Government will further develop primary healthcare in the community by launching the Primary Healthcare Co care Network, which will extend screening to include hepatitis B and other diseases, strengthen cross disciplinary collaboration, and improve support services such as medical laboratory testing and diagnostic radiology. 

The target participation for the first five years is for around 700,000 individuals, he added.

The Government will also implement the community drug formulary and launch the community pharmacy programme in the second half of this year.

To enhance the price transparency of private healthcare services, the Government will introduce the relevant regulation to the Legislative Council this year.

Source: Hong Kong Information Services

Financial Secretary Paul Chan today announced several measures to integrate technological and industrial innovations through key infrastructure projects, including Hetao Hong Kong Park and San Tin Technopole.

Through tripartite co-operation, the Government intends to channel land and corporate resources towards target industries for priority development in Hong Kong. Encouraging greater participation in innovation and technology by the business sector will expedite development of the Northern Metropolis.

Planning for Phase 2 of Hetao Hong Kong Park is complete and the Government will seek Legislative Council approval to inject $10 billion into the park company to accelerate development..

To create a comprehensive industrial ecosystem, the Government will establish a dedicated company this year with the aim injecting $10 billion to move forward with development of the San Tin Technopole.

 

Aerospace collaboration

The finance chief said today that Hong Kong is well-positioned to connect the Mainland’s aerospace industry with global markets by providing professional services in research and development (R&D), financing and risk management.

The Office for Attracting Strategic Enterprises will take the lead in identifying and attracting aerospace firms to establish a presence in the city. To further support the sector, the Government has requested Hong Kong Exchanges & Clearing to review listing requirements to facilitate the entry of aerospace enterprises into the local capital market.

Driving RISC-V innovation

The Hong Kong Investment Corporation is actively promoting the R&D and industrialisation of RISC-V technology through strategic investments and the establishment of the Hong Kong RISC-V Alliance.

The alliance aims to leverage this open-source technology to foster cross-industry co-operation among academia, industry and the investment sector within the Greater Bay Area and international markets.

Advancing emerging technologies

The Government is accelerating the commercialisation of new materials with two startups set to launch production lines at EcoPark this year and the third InnoHK research cluster, establishing new R&D centres focused on advanced manufacturing and sustainability.

To the foster the next wave of artificial intelligence (AI), the Government and the Hong Kong Investment Corporation are building a robust ecosystem for embodied AI.

Strategic investment

The Financial Secretary said today that the Government is currently selecting managers for its $10 billion Innovation & Technology Industry-Oriented Fund, with operations set to begin this year to channel market capital into strategic fields like life and health technology and AI.

To further bolster cross-boundary collaboration within the Greater Bay Area, the Government will also review and enhance tax arrangement for R&D expenditures.

Patient capital

The Hong Kong Investment Corporation has invested in over 190 projects to date. As the initial $62 billion capital has been largely allocated, the Government will arrange capital injections to further promote industry clustering and the development of frontier technology.

Source: Hong Kong Information Services

Overall consumer prices rose 1.1% year-on-year in January, a smaller increase than the 1.4% year-to-year rise recorded in December, the Census & Statistics Department announced today.

Netting out the effects of the Government’s one-off relief measures, the underlying inflation rate was 1% in January, also less than that seen in the previous month.

Compared with January 2025, year-on-year increases in prices were recorded in the following categories: electricity, gas and water; miscellaneous services; alcoholic drinks and tobacco; miscellaneous goods; transport; housing; and meals out and takeaway food.

Meanwhile, year-on-year decreases were logged for durable goods; clothing and footwear; and basic food.

The Government said that the smaller increases in January were mainly due to the high base of comparison stemming from the Chinese New Year taking place in January last year, while the 2026 Chinese New Year fell in mid-February.

It added that price pressures on various major components remained largely contained in general.

Looking ahead, external price pressures are expected to largely stay moderate, but domestic costs may rise as the Hong Kong economy continues to grow. Nevertheless, overall inflation should stay mild in the near term.

Source: Hong Kong Information Services

Financial Secretary Paul Chan said today in his 2026-27 Budget that the Government will continue to promote the integrated development of culture, sports and tourism to provide a better urban living experience for residents and visitors.

In the coming year, the Government will allocate $1.66 billion to the Tourism Board. The board will scale up its flagship events and promotions, introducing new elements, extending the duration of events, and organising more signature festive events to highlight Hong Kong’s East-meets-West uniqueness.

Building on the success of last year’s “Immersive Light Show in Central”, which featured spectacular 3D light shows, the board will launch a brand-new show focused on the theme of light festivals. It will be held at various locations at different times of the year and will replace “A Symphony of Lights”.

To attract high-end overnight visitors, the Tourism Board will step up marketing efforts in source markets with good potential, including Mainland cities outside Guangdong, and emerging markets such as Association of Southeast Asian Nations countries and the Middle East. 

Hong Kong will also continue strengthening co-operation with the Greater Bay Area and other Mainland provinces and municipalities, and exploring options for multi-destination flight itineraries with airlines.

On revitalising historic buildings, Mr Chan said the Government will earmark additional funding of $1 billion for the Built Heritage Conservation Fund to carry on its work.

Following the opening of the Eastern Section of the East Coast Boardwalk in North Point at the end of last year, the 13km-long harbourfront from Kennedy Town to Shau Kei Wan has now been fully pedestrianised.

Adhering to the incremental approach taken in enhancing the harbourfront, the Government plans to conduct a consultation on the construction of a pedestrian walkway at the praya in Kennedy Town in the second quarter of this year. Following the phased opening of a waterfront site near Hung Hom Station this quarter, Kowloon’s harbourfront promenades will extend to about 15km in length.

To support the “tourism is everywhere” ethos and promote “urban-rural integration”, the Budget proposes allocating $200 million to launch the “Northern Metropolis Urban-rural Integration Fund” as a pilot scheme. The scheme aims to encourage non-governmental organisations and relevant bodies to take forward rural tourism projects and bring economic vitality to rural villages.

With regard to sports, the Government will allocate more resources to promote sports in the community, support elite sports, maintain Hong Kong as a centre for major international sports events, enhance professionalism in sports, and develop sports as an industry.

It will inject $1.2 billion into the sports portion of the Arts & Sport Development Fund to further promote sports development, including strengthening training for team sports athletes, improving the professional standards of coaches, and bringing more diverse and higher-level sports competitions to Hong Kong.

Meanwhile, as part of its ambition to develop Hong Kong into a global trading hub for “premium” arts, the Government is due to finalise the details of its collaboration with Art Basel over the coming five years.

To strengthen Hong Kong’s position as one of the world’s top three arts trading centres, the Government has initiated a study focused on exploring areas such as financing and talent development. The study is expected to be completed this year.

Source: Hong Kong Information Services

Financial Secretary Paul Chan revealed that in 2025-26, the Government’s Operating Account will return to a surplus ahead of schedule and is expected to register a surplus throughout the period from 2026-27 to 2030-2031.

Mr Chan observed that overall, the Government’s public finances have seen significant improvement.

Delivering the 2026-27 Budget Speech today, Mr Chan noted that the Budget last year introduced a reinforced fiscal consolidation programme with the aim of achieving fiscal balance.

Over the past year, on top of its full commitment to implementing the programme, the Government also saw an increase in revenue from stamp duties and profits tax, by nearly $50 billion in total, compared to the original estimate.

As a result, in 2025-26, the Operating Account will return to a surplus ahead of schedule, while the Consolidated Account will be broadly balanced after taking into account the net proceeds from bond issuance.

In the medium term, Mr Chan said the Capital Account will nevertheless still record a deficit annually, mainly due to a high level of capital works expenditure. 

As infrastructure projects are an investment in Hong Kong’s future, the Government will meet the financing needs by suitably increasing bond issuance. 

Fiscal consolidation

The Financial Secretary said the Government will follow through with the fiscal consolidation programme by strictly containing the growth of operating expenditure.

Specifically, it will take forward the Productivity Enhancement Programme as planned, to cut the recurrent expenditure by 2% in both 2026-27 and 2027-28. Such moves will deliver further savings of about $7.8 billion and $15.6 billion respectively over 2025-26.

The plan will be launched on the premise that the Comprehensive Social Security Assistance, Social Security Allowance and statutory expenditures will not be affected, Mr Chan emphasised.

The civil service establishment will be reduced by 2% in each of the coming two financial years to an estimated level of about 188,000 posts by April 1. As a result, a cumulative total of over 10,000 posts will be deleted within the current-term Government.

Mr Chan said the Government will uphold the “affordable users pay” principle in raising revenue.

The rates of stamp duty on residential property transactions valued above $100 million will be raised from 4.25% to 6.5%, affecting about 0.3% of residential property transactions. 

It is estimated that revenue will increase by about $1 billion per year. The measure will take retrospective effect from tomorrow upon passage of the amendment bill by the Legislative Council.

The Government will also optimise the use of its financial resources. Funds established outside its accounts will be consolidated with a view to bringing back about $15.8 billion to the Government’s accounts in 2026-27.

To optimise the use of the Bond Fund’s surplus, the Government will introduce a resolution to LegCo to enable the transfer of the accumulated fund surplus to the Consolidated Account in 2026-27.

In addition, Mr Chan proposed transferring $75 billion in each of the coming two financial years, totalling $150 billion, from the Exchange Fund to the Capital Works Reserve Fund. The $150 billion in transfer will support the Northern Metropolis and other infrastructure projects.

Bond issuance

The Government’s capital works expenditure is estimated to be about $128 billion for 2026-27. As the Government will accelerate the development of the Northern Metropolis and other economy and livelihood related works projects, it plans to raise the total borrowing ceiling of the green bonds and infrastructure bonds programmes, from $700 billion announced last year to $900 billion. 

During the Medium Range Forecast period, the ratio of government debt to Gross Domestic Product will rise from 14.4% to 19.9%, which, Mr Chan said, is a highly prudent level and well below that of most advanced economies.

Proceeds from bond issuance will be used to invest in infrastructure only, but not for government recurrent expenditure, he emphasised.

Source: Hong Kong Information Services

Financial Secretary Paul Chan said today the main purpose of the Exchange Fund is to defend Hong Kong’s financial stability and its financial system.

The 2026-27 Budget proposed to transfer $150 billion from the Exchange Fund to the Capital Works Reserve Fund in the coming two years to support the Northern Metropolis and other infrastructure projects.

At the Budget press conference this afternoon, Mr Chan explained the rationale behind the transfer and emphasised that it is a safe play.

“Last year, the Exchange Fund made an investment income of over $300 billion. Now we are transferring from the Exchange Fund, about half of it, $150 billion, in two installments commencing from 2026-27.”

“Having regard to the current size of the Exchange Fund, which is over $4,100 billion, and considering that we are just taking half of their income earned last year, back to the Government, also for investment purposes, we do think this is a considered, prudent move,” Mr Chan added.

“We are very confident that given our various measures in place and the strong buffer of the Exchange Fund, we would be able to weather any volatility or even attack to our financial system.”

Source: Hong Kong Information Services

In his Budget speech today, Financial Secretary Paul Chan said the revised estimate of total government revenue in 2025-26 is about $688.8 billion, higher than the original estimate by 4.5%. Fiscal reserves are expected to be $657.2 billion at end-March 2026.

Supporting citizens, enterprises

To relieve the economic pressure faced by citizens and enterprises, Mr Chan – having taken into account the Government’s fiscal position this year – proposed a number of measures in the 2026-27 Budget:

(a) provide rates concession for domestic properties for the first two quarters of 2026-27, subject to a ceiling of $500 for each rateable property ‒ this measure is estimated to involve about 3.15 million domestic properties and reduce government revenue by about $3.1 billion;

(b) provide rates concession for non-domestic properties for the first two quarters of 2026-27, subject to a ceiling of $500 for each rateable property ‒ this measure is estimated to involve about 440,000 non-domestic properties and reduce government revenue by about $400 million;

(c) reduce salaries tax and tax under personal assessment for the year of assessment 2025-26 by 100%, subject to a ceiling of $3,000 ‒ the reduction will be reflected in the final tax payable for the year of assessment 2025-26, benefitting about 2.12 million taxpayers and reducing government revenue by about $5.3 billion;

(d) reduce profits tax for the year of assessment 2025-26 by 100%, subject to a ceiling of $3,000 ‒ the reduction will be reflected in the final tax payable for the year of assessment 2025-26, benefitting about 171,000 businesses and reducing government revenue by about $500 million; and

(e) provide an allowance for eligible social security recipients, equal to one month of the standard rate Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance, while similar arrangements will apply to recipients of the Working Family Allowance, altogether involving an additional expenditure of about $6.5 billion.

In addition, starting from the year of assessment 2026-27, the Budget proposed:

(1) increasing the basic allowance and single parent allowance from $132,000 to $145,000, and the married person’s allowance from $264,000 to $290,000, benefitting about 2.09 million taxpayers and reducing tax revenue by about $3.56 billion a year;

(2) increasing the child allowance and additional child allowance from $130,000 to $140,000, benefitting about 360,000 taxpayers and reducing tax revenue by about $680 million a year; and

(3) increasing the allowance for maintaining a dependent parent or grandparent, and raising the deduction ceiling for elderly residential care expenses ‒ these measures will benefit about 830,000 taxpayers and reduce tax revenue by about $970 million a year.

Specifically, the allowance for maintaining a dependent parent or grandparent aged 60 or above will be raised from $50,000 to $55,000. The same increase applies to the additional allowance for taxpayers residing with these parents or grandparents.

Meanwhile, the allowance for maintaining a dependent parent or grandparent aged 55 to 59 will be increased from $25,000 to $27,500. The same increase applies to the additional allowance for taxpayers residing with these parents or grandparents.

Furthermore, the deduction ceiling for elderly residential care expenses will be adjusted, from $100,000 to $110,000, for taxpayers whose parents or grandparents are admitted to eligible residential care homes.

Government revenue

On government revenue, Mr Chan said: “Due to a buoyant equity market and an accelerated economic growth, the revenue estimate from stamp duties is revised to $99.5 billion, an increase of about $31.9 billion from the original estimate. Revenue from profits tax has increased by about $16.8 billion while that from salaries tax remains stable, with the revised estimates at $209 billion and $97 billion respectively, demonstrating the strong resilience of Hong Kong’s economy.

“However, as the residential property market has just stabilised while the commercial property market remains relatively sluggish, government revenue from land premium stays low with the revised estimate at $17.5 billion, lower than the original estimate by $3.5 billion.”

Government expenditure

The finance chief said the revised estimate of total government expenditure for 2025-26 is $789.2 billion, lower than the original estimate by $33.1 billion. Of this, recurrent expenditure is $572.4 billion, lower than the original estimate by $15.7 billion.

The Operating Account for 2025-26, which was originally estimated to record a deficit of about $3 billion, will register a surplus of $51.3 billion. The Capital Account will record a deficit due to low revenue from land premiums, coupled with high capital works expenditure to cater for the accelerated development of the Northern Metropolis and other public works projects.

Factoring in the issuance of government bonds of $155 billion and repayments of $51.7 billion, it is expected that the Consolidated Account will register a surplus of $2.9 billion instead of a deficit of about $67 billion as originally estimated.

Separately, the major policy initiatives announced in the 2025 Policy Address involve $7.4 billion in operating expenditure, $32 billion in capital expenditure and $20 billion in financial commitments. There will be about $1.3 billion in revenue forgone. The financial implications of such initiatives have been reflected in the estimates for 2026-27.

Total government expenditure for 2026-27 will increase by about 6.9% to $843.4 billion, with its ratio to nominal gross domestic product projected to be 24.2%.

Recurrent expenditure for 2026-27 will increase by 4.8% to $599.7 billion. Of this, substantial resources will continue to be allocated to livelihood-related policy areas including healthcare, social welfare and education, involving a total of $357.1 billion and representing about 60% of recurrent expenditure. Non-recurrent expenditure will increase by 36.9% to $40.5 billion.

Total government revenue for 2026-27 is estimated to be $765.2 billion. A consolidated surplus of $22.1 billion is expected for the year, and the fiscal reserves will rise to $679.3 billion.

Medium Range Forecast

In the Medium Range Forecast spanning 2026-27 to 2030-31, a real economic growth rate of 3% is adopted. The finance chief expects that there will be a surplus in the Operating Account for each of the next five years, while the Capital Account will still record a deficit due to expenditure on infrastructure. After taking account of net proceeds from the issuance of bonds, the Consolidated Account will register a surplus in each of the next five years.

Fiscal reserves are estimated at $733.7 billion by the end of March 2031, representing 17.3% of gross domestic product, or equivalent to about 10 months of government expenditure, he added.

Source: Hong Kong Information Services

Financial Secretary Paul Chan proposed in his 2026-27 Budget today to refine the associated tax regime and institutional framework, nurture talent and leverage the city’s strengths in professional services, with a view to boosting economic development through driving intellectual property (IP) trading and financing.

Delivering his speech this morning, Mr Chan said reducing costs will facilitate more relevant trading activities, which would be conducive to the development of knowledge-intensive industries and could reinforce Hong Kong’s position as a regional IP trading centre.

He noted that the Government is consulting the trade on tax deduction arrangements for capital expenditure incurred for purchasing IP or the rights to use IP and plans to introduce an amendment bill this year.

In addition, the Government has earmarked $28 million to support the Hong Kong Technology & Innovation Support Centre in providing innovation and technology (I&T) enterprises with patent evaluation based on Guobiao, and implementing the two-year Pilot Patent Valuation Support Scheme to assist I&T enterprises for conducting valuation of their patent assets.

The Intellectual Property Department, together with the Vocational Training Council, will roll out a two-year pilot programme and establish the Intellectual Property Academy to provide on-the-job training linked to the Qualifications Framework. The Government has earmarked $52 million for the project, which is targeted to commence at the end of this year.

Highlighting another industry with a competitive edge, Mr Chan noted that the Department of Justice (DoJ) is preparing for the development of the Hong Kong International Legal Service Building as a new international legal hub landmark, which will be home to the headquarters of the Hong Kong International Legal Talents Training Academy and international legal and dispute resolution services institutions, etc. The preparatory works will commence this year.

The International Institute for the Unification of Private Law will establish its Asia‑Pacific Liaison Office in Hong Kong this year. Mr Chan pointed out that the DoJ will continue attracting international legal and dispute resolution services institutions to establish offices in Hong Kong. 

To strengthen the promotion of mediation and arbitration services, the Government will strengthen the regulatory framework for accreditation and disciplinary matters of the mediation profession in Hong Kong and take forward the legislative exercise this year.

Source: Hong Kong Information Services

Chief Executive John Lee today met Secretary of the CPC Guangxi Zhuang Autonomous Region Committee Chen Gang at Government House to exchange views on deepening co-operation between Hong Kong and Guangxi.

Mr Chen is leading a delegation to attend a Guangxi promotion conference tomorrow. Mr Lee will witness and support the signing of a co-operation agreement between Guangix and Hong Kong at the conference.

Mr Lee higlighted that the Hong Kong Special Administrative Region Government has established a “Task Force on Supporting Mainland Enterprises in Going Global”, and expressed confidence in working together with Guangxi to tap into overseas markets, including the Association of Southeast Asian Nations, to explore more global business opportunities.

Mr Lee said that Hong Kong, as a core city in the Greater Bay Area, will proactively align with the National 15th Five-Year Plan to deepen co-operation, regional integration and efficient connectivity in the bay area.

In addition, he iterated that Hong Kong will harness its role under the “one country, two systems” principle in connecting with both the Mainland and the world, to promote Guangxi’s further opening-up internally and externally, seize bay area opportunities, and contribute to the country’s high-quality development.

The Chief Executive said he hopes the two places can deepen co-operation for mutual benefit, particularly through more in-depth and extensive exchanges in areas such as innovation and technology, and youth people.

He added that with the advancement of the Western New Land-Sea Corridor, Hong Kong and Guangxi will further strengthen practical co-operation in shipping and logistics, jointly seizing the immense opportunities presented by national development strategies.