Friday, November 27, 2015   

$11b on table to ease inflation pain

Bonnie Chen

Thursday, July 17, 2008

Click here...
Chief Executive Donald Tsang Yam- kuen has unveiled an HK$11 billion inflation relief package and called on lawmakers to approve the release of funds to put it into practice by tomorrow.

Tsang announced the 10-point plan during yesterday's Legislative Council's question and answer session.

Half of the measures such as a student subsidy, domestic helper tax waiver and assistance for lower income groups to buy food are new. The rest are extensions of those introduced in the March budget, such as subsidized electricity bills, which will be implemented in two stages.

The food assistance measure can only be implemented after the new Legco term begins in October as officials need to work out details.

Most of the other measures can be implemented as early as September after the government seeks approval from Legco's Finance Committee tomorrow.

The same meeting is also expected to pass the HK$2 billion Sichuan reconstruction funding.

Tsang stressed the relief package was a one-off to deal with the surging inflation, which jumped to 5.7 percent in May.

He said it would take government spending to HK$46.5 billion for the 2008/09 financial year. "Unusual methods have to be applied during unusual times," Tsang said, indicating he had to act ahead of his policy speech in October.

A senior government source said other measures had been considered including the revaluation of the Hong Kong dollar.

But it was discovered that inflation could only be lowered by 0.6 percent if the Hong Kong dollar appreciated 10 percent, which would have little impact.

Tsang said he believed inflation will even out when all the major infrastructure projects begin in 2010.

"But we have one and a half years to go. It will be tough especially for the grassroots," Tsang said, adding inflation has brought instability around the world.

The government source added the administration's recent low popularity was due to the pain that inflation inflicted on the public and that it would have been too late to take measures if this discontent manifested itself in street protests.

Inflation was also a major concern for most Legco members. Of 21 members who asked questions, 12 were related to inflation.

Most spoke for the grassroots and non-taxpayers who do not own property and get no Comprehensive Social Security Assistance. It is estimated there are around 700,000 such people.

The Democratic Party's Fred Li Wah-ming asked how Tsang could help 60- to 64-year-olds who do not get old age allowance.

The party's vice-chairman, Sin Chung-kai, suggested Tsang grant a one-off HK$1,000 bonus to those without CSSA, MPF, tax rebates, aged parents and children; and HK$1,500 to those with none of the above and who do not have to pay electricity bills and property rates.

Frederick Fung Kin-kee of the Hong Kong Association for Democracy and People's Livelihood suggested subsidizing those waiting for public housing and for the CSSA subsidy to return to 2002 levels.

Tsang said he would take the suggestions into consideration.

The senior government source also said the package had nothing to do with Vice President Xi Jinping's concerns on inflation.

Xi told Hong Kong officials that the administration, legislature and Judiciary should support each other. The source said Xi was not rebuking the Hong Kong administration but meant everybody should work toward the rule of law and the economic development of Hong Kong.

© 2015 The Standard, The Standard Newspapers Publishing Ltd.
Contact Us | About Us | Newsfeeds | Subscriptions | Print Ad. | Online Ad. | Street Pts


Home | Top News | Local | Business | China | ViewPoint | CityTalk | World | Sports | People | Central Station | Spree | Features

The Standard

Trademark and Copyright Notice: Copyright 2015, The Standard Newspaper Publishing Ltd., and its related entities. All rights reserved.  Use in whole or part of this site's content is prohibited.   Use of this Web site assumes acceptance of the
Terms of Use, Privacy Policy Statement and Copyright Policy.  Please also read our Ethics Statement.