Civic Party’s Proposal on 2012/13 Budget Executive Summary


Alleviating the Burden of the
Middle Class and Protecting Grass-root Livelihood is a Long-term Commitment

Civic Party’s Proposal on 2012/13 Budget

Executive Summary


The Government’s surplus is expected to be 25 billion dollars this year, which adds up to 650 billion dollars in fiscal reserve, or about 24 to 27 months’ worth of Government expenditure.  On the other hand, general living costs remain high. The increase in salaries does not match ever- increasing rent and other items.  The middle class and grassroots have for many years been under huge financial pressure. The Government should immediately implement long-term and effective measures to improve the people’s livelihood and put an end to the ‘rich Government, poor people’ situation we face today. The Civic Party urges the Government to:


Introduce “10 Salary Tax Allowances”

Tax Allowances

Present Practice

CP’s Suggestions

1.      Medical insurance allowance


Ceiling set at $6,000 per year.  This is to encourage citizens with financial capability to buy insurance to alleviate the burden of the public medical sector

2.      Rental tax allowance


Ceiling set at $36,000.  This is to let citizens who rent their residence but do not own a private property to enjoy the tax allowance

3.      Extra MPF investment tax allowance


Ceiling set at $12,000.  This is to encourage citizens with financial capability to save more for retirement

4.      Basic Allowance

Basic allowance is $10,8000;

Married person’s allowance, $216,000

Increase basic allowance to $120,000;

Married person’s allowance, $240,000

5.      Child allowance
(the 1st to 9th child)

$60,000 for each dependent.  For each child born during the year, Child Allowance will be increased by $60,000

Increase to $70,000 for each dependent.  New born child allowance increase to $70,000

6.      Dependent parents/ grandparents allowance;
Dependent sibling allowance

$36,000 for each dependent aged 60 or above;
$30,000 for each dependent

$48,000 for each dependent aged 60 or above;
$40,000 for each dependent

7.      Single parent allowance


Increase to $120,000

8.      Disabled dependant allowance


Increase to $80,000

9.      Expenses of Self-Education Tax Allowance


Increase to $100,000.  Include the entire repayment amount in Student Finance Schemes (including Grants and Loans Scheme and Non-means-tested Loan Scheme) to tax allowance

10.  Home Loan Interest Tax Allowance

$100,000 maximum limit with 10 years entitlement


Maximum limit increase to $150,000  with entitlement extended to 20 years


Profit Tax

Ø   Provide tax breaks to important budding industries, such as environmental industry, creative industry and testing, inspection and certification industry.

Ø   Provide tax breaks to enterprises which hire the disabled, support them to provide barrier-free facilities, encouraging them to establish a barrier-free working environment


Fiscal Reserves

Ø   The current level of fiscal reserves exceeds 20 months of government expenditure. The Government ought to conduct reviews and make better use of the revenue to enhance the business environment and close the wealth gap by resetting the level of fiscal reserves at 12 months of government expenditure.



Ø   Ensure 5,000 HOS flats will be provided each year

Ø   Provide 30,0000 units of rental housing (PRH) each year


Retirement Protection

Ø   Set aside $50 billion seed money for Universal Retirement Protection Scheme. Returns from the fund will generate a stream of income to meet the needs of our aging society


Social Welfare

Ø   Increase 4 thousand units of subsidized places in care-and-attention (C&A) homes for the elderly, aiming at satisfying all those waiting for a place within 5 years

Ø   Increase funding to social service providers to support mentally-ill elders in the community and their carers.

Ø   Provide incentives to encourage enterprises to set indicators of hiring disabled people, in order to increase their employment opportunities.


Health Care

Ø   Provide 22.5 billion funding for public hospital redevelopment and expansion projects, including Kwong Wah Hospital, Queen Mary Hospital and United Christian Hospital.

Ø   Add new drugs to the Drug Formulary to let patients benefit from medicines which are more effective or with less side-effect. 400 million should be set aside for this in the next 5 years.

Ø   Increase 500 training places for Registered and Enrolled Nurses in the next 5 years. This will involve a one-off expenditure of $190 million.



Ø   Phasing in small-class teaching in secondary schools

Ø   Abolish Pre-Primary Education Voucher Scheme and implement 15-year Free Education. This will involve an additional annual expenditure of approximately $ 200 million.



Ø   Set aside funding to establish Kowloon East Development Office.  Actively supervise and monitor “Energizing Kowloon East” project.  The project should adopt a Public Participatory Approach as in the Kai Tak Development project

Ø   Make good use of vacant land in the New Territories such as Yuen Long and Ting Shui Wai.  Develop them to stimulate local economy and create job opportunities with the preservation of local sights.



Ø   Allocate $40.2 billion to boost our Green Economy and protect the environment, including channelling $1 billion of seed money into a “Nature and Heritage Conservation Fund”. A further $2.1 billion in subsidy to be provided to the underprivileged for the installation of energy efficient and/or renewable energy facilities. Each CSSA recipient and public housing resident will receive $2,000.



Ø   Consider establishing a fare stabilization fund by setting aside a certain proportion of MTRCL dividend received by the Government or benefits acquired from “non-transport businesses” of public transport providers (such as the annual property proceeds of MTRCL), in order to lower the fares of MTR.


Home Affairs

Ø   Allocate $100 million to fund Community Legal Centres in all districts