John Tsang's last budget contained many give aways (it would be wrong to characterise them as give backs as the majority of the additional spending is not going to the people who actually paid the taxes in the first place). Some of them have come in the general direction of the traineeinvestor household:
1. electricity subsidy of HK$1800: sure, we'll take it but this one is fundamentally wrong as it will encourage people to use more electricity (or disincentivise them from reducing electricity consumption);
2. waiving property rates up to HK$2,500 per quarter per property: we will definitely take this one. Given the low yields on property at the moment this is a very welcome tax break;
3. reduction of salaries tax up to $12,000: mrs traineeinvestor will benefit from the full $12,000. It will have no effect on me (I pay tax at the partnership level). While this is one of the few cases of the give aways actually being give backs, it is a bad idea as it takes more people out of the tax net;
4. increase in basic and dependant allowances: see #3 above;
5. extending home loan deduction from 10 years to 15 years: this will benefit mrs traineeinvestor and is welcome although it seems to be inconsistent with the government's other policies designed to force home prices lower by making them less affordable;
6. increasing maximum MPF deduction to HK$15,000: as awful as MPF is as an investment (high costs), I welcome this one. I'd actually like to see the minimum mandatory contributions raised further as compulsory savings will (hopefully) reduce the pool of people demanding taxpayer funded entitlement payments in the future (particularly important as Hong Kong's population ages).
But where o where is there money being spent to clean the air and address the acute shortage of places in our schools for international students?
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