Chief Secretary Matthew Cheung said the Government can afford the cost of the 2017 Policy Address initiatives, and there is no need to raise taxes to pay for them.
Speaking to the media after attending radio programmes today, Mr Cheung responded to reporters’ concern about rising recurrent expenditure incurred by the new welfare policies outlined in the address.
He said the proposed higher monthly Old Age Living Allowance will cost $6.5 billion in the first year and about $7.5 billion annually for the next ten years.
For the proposal to progressively abolish the Mandatory Provident Fund offsetting mechanism, the annual expenditure will be about $6 billion.
However, Mr Cheung said the next administration can afford the bills and there is no need to raise taxes.
"Global competition is intense now. Even a slight increase in taxes might affect the business environment. And the business sector has much concern about the ‘offsetting’ issue. So it is difficult for us to talk about tax regime adjustment now. We have to be cautious," he said.
