$5,000 - use it or lose it

Electronic coupons worth HK$5,000 will be issued to 7.2 million Hongkongers as Financial Secretary Paul Chan Mo-po ditched cash subsidies for a direct approach to boost consumption.

The vouchers will be issued in five installments to each eligible Hong Kong permanent resident and new arrivals aged 18 or above, costing the government about HK$36 billion.

"Taking experiences in other places, the amount will not be distributed in one go," Chan said at a media briefing after he delivered his 2021-22 budget in the Legislative Council.

"Our idea now is to distribute the amount in five installments of HK$1,000 each time."

Government sources said the consumption coupons can be used in a wide range of local shops and restaurants, as well as services.

And if users don't use up the amount within the month, the amount won't be carried forward.

Chan said the voucher scheme is more complicated than the HK$10,000 cash handout scheme last year, so it would take longer. He hoped the registration can begin in the summer.

"The government will identify suitable stored value facilities operators to help roll out the scheme, and will announce the details of the scheme as soon as possible," Chan said.

The considered options include "an obvious choice" - the Octopus card, Chan said. It is understood PayMe and Alipay are also on the list.

At the budget press conference yesterday, Chan said the policy goal of the consumption vouchers was to boost local consumption in industries that have seen a tough business environment during the economic downturn.

"We hope the scope can be as wide as possible so long as it is to be incurred in domestic consumption," he said.

The vouchers can be used in online purchases, but only for local merchants.

"We are not going to allow those consumption vouchers to be spent on overseas purchases," Chan said.

Asked if Hongkongers who have emigrated to other countries will be able to use the vouchers, he said only those who have been living in Hong Kong for some time in the past are eligible to apply.

For people like the elderly who are not familiar with electronic payment, Chan said they could ask relatives or helpers to apply for it, and many people are familiar with the use of Octopus. "So if we could use Octopus as one of the means to effect these consumption vouchers, I think it would also be acceptable for elderly members of the public," he said.

Chan said the details of the voucher scheme will be announced as early as possible so merchants can install electronic payment platforms if they don't have one. The government would consider bearing the cost.

Chan had repeatedly played down expectations for the government to hand out cash in this budget due to the historic-high deficit of HK$257.6 billion for 2020-21. Fiscal reserves are expected to be HK$902.7 billion by March 31 - down from HK$1.133 trillion last financial year.

He said this year's budget focuses on stabilizing the economy and relieving people's burden with counter-cyclical measures costing more than HK$120 billion.

"I know how difficult it is to earn a living during the economic downturn. I can feel their pain. This is why, despite a record high fiscal deficit in 2020-21, I once again propose a budget involving a deficit of over a hundred billion dollars," Chan said.