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【The Budget】HK to give HK$10,000 cash handouts to permanent adult residents to boost consumption

Financial Secretary Paul Chan Mo-po has announced that all Hong Kong permanent residents aged 18 or above will be eligible for cash handouts of HK$10,000 each. About 7 million people would be benefited from this one-off relief measure to boost local consumption and heal the wounded economy.

Hong Kong is expected to face its first budget deficit in 15 years in the financial year ending March 31, 2010, battered by the US-China trade war, social unrest, and coronavirus outbreak. Still, the financial secretary stayed confident with the reserves.

“I consider that, with ample fiscal reserves, the government has to increase public expenditure amid an economic downturn to stimulate the economy and ride of the difficult times with members of the public,” he said in the budget speech on Wednesday morning. Mr Chan added that the procedure of handouts, which amounted to about HK$71 billion, would be announced later and the goal is to distribute cash to citizens by the summer holidays.

 

“The most eye-catching”

Chief Secretary Matthew Cheung Kin-chung described the HK$10,000 cash handouts as “the most eye-catching” measure in the budget and calls for Legislative Council members to give a smooth passage to the appropriation bill.

“Hongkongers have faced war, poverty, diseases, economic recessions and financial crises, but with our robust vitality the rationality, practical and cooperative spirit, we will surpass the difficulties at the end,” Mr Cheung said.

“I believe that given the extraordinary challenges that our community is facing, this is a justifiable and effective measure,” Chief Executive, Carrie Lam said.  “For some people, the cash payout will help to make ends meet in their hour of need. It will also encourage local consumption and inject some much-needed impetus into the economy,” she said.

 

Incomplete coverage

Before the announcement of the latest budget, both the pro-democracy and pro-establishment camps call for the cash payout. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) urged the Government for a HK$10,000 cash handout and simplifying application procedures.

"In the light of the current coronavirus crisis, I think the government should provide every permanent Hong Kong residents HK$10,000 cash handouts as soon as possible," DAB’s vice-chairman, Holden Chow Ho-ding said.

New People's Party lawmaker Regina Ip said the measure should not be limited to permanent residents. "I don't think we should differentiate between permanent residents and non-permanent residents. But we could differentiate between those are in Hong Kong for settlement and those who are here under special labour schemes," she said.

Ms Ip also commented the budget failed to stimulate Hong Kong's long-term economic growth and could not deal with the problem of inequality. "Because Hong Kong faces not only the problem of poverty but also the extremely unequal distribution of wealth. So, it is disappointing that there are no redistributive measures proposed in this budget," said Ms Ip, who is also an Executive Council member.

Reported by Kawai Wong

Edited by Coco Wong, Felix Tam

《The Young Financial Post 新報人財經》

新報人財經(TYFP)為香港浸會大學新聞系財經專業的實驗平台,由學生自主編採,為社會大眾提供中港相關的金融財經消息。

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