Govt says no to HK$40,000 annual handout for new parents

Deputy Chief Secretary Warner Cheuk Wing-hing said on Wednesday that the SAR government has no plans to adopt a proposal to disburse an annual cash bonus of HK$40,000 to each newborn baby of grass-root citizens, nor introduce a child tax allowance to be calculated on a progressive basis.

His comments came after Lawmaker Shiu Ka-fai recommended the government disburses an annual cash bonus of HK$40,000 to each newborn baby of the grass-roots until the baby reaches the age of 5 to 6, also proposing the government introduces a child tax allowance to be calculated on a progressive basis to encourage childbearing among middle-class families.

Speaking at the Legco today, Cheuk said under the newborn baby bonus scheme, the government will provide a cash bonus of HK$20,000 to eligible parents for each baby born in Hong Kong on or after October 25, 2023, with the scheme running for three years.

He said should the one-off cash bonus be altered to an annual cash bonus of HK$40,000, each newborn baby would be disbursed with HK$200,000 to HK$240,000 within a span of five to six years, with the expenditure incurred by the proposal reaching tens of billions of dollars.

“This is a colossal financial burden and not a good use of resources either. The government has no plans to adopt the proposal concerned,” said Cheuk.

Meanwhile, commenting on the proposal to introduce a child tax allowance to be calculated on a progressive basis, Cheuk said the move would see government revenue decrease by about HK$4.2 billion per year, which is about 5 percent of the total revenue from salaries tax and tax under personal assessment in 2022-23.

He noted that the move will significantly increase the financial burden on the government, with the Government having no plans to adopt the proposal concerned.