No vouchers, but bigger tax break to put more money in pockets, says Chan

Financial Secretary Paul Chan Mo-po on Thursday defended the government’s decision not to distribute consumption vouchers or cash handouts in the 2026 Budget, saying tax rebates and increased allowances would allow a family of four to save more than HK$10,000 a year.

Speaking on a radio simulcast program a day after delivering the Budget, Chan responded to callers who voiced disappointment over the absence of vouchers, which had been rolled out previously to stimulate domestic spending.

One caller said the latest Budget was even more disappointing than last year’s and criticized the government for failing to respond to public calls during the consultation period for renewed cash payments or vouchers. The caller also pointed to Macau’s long-standing cash distribution scheme, questioning whether Hong Kong truly lacked the financial capacity to offer similar support.

Chan said retail and catering businesses have stabilized and reversed earlier declines, while visitor arrivals have increased significantly.

“Different districts have become much busier,” he said, adding that the economy is moving in a positive direction.

He acknowledged that the government is issuing bonds to finance infrastructure projects and that public accounts are currently balanced. Within its fiscal capacity, he said, the administration had focused on tax rebates and raising allowances to “put more money into people’s pockets.”

According to Chan, a household with two children could save more than HK$10,000 annually under the new tax measures.

He added that a series of upcoming large-scale events would attract visitors and encourage local spending.

“When there are more people, there is more prosperity,” he said, arguing that this approach would provide more sustainable support to the economy.

Elderly callers also urged the government to increase the Old Age Living Allowance for those aged 75 or above, saying current payments are insufficient to meet living expenses.

Chan said the allowance mechanism is subject to regular review and that, despite fiscal constraints, the government had done its best to enhance support by granting recipients an additional month of payments. He called for public understanding given the tight fiscal position.

On whether to impose a sales tax on cross-border e-commerce, Chan said the issue involves multiple considerations and is under study. He added that the government would carefully examine ways to increase revenue without placing unnecessary burdens on residents.

Healthcare charges were another focus of concern. A caller said that after the recent increase in public hospital fees, the threshold for fee waivers remains high.

He noted that elderly security guards earning around HK$15,000 a month may not qualify for assistance under the new system, even if they struggle to pay medical bills. The caller added that he often sees elderly patients unable to afford payments at hospitals.

Chan said the government bears significant healthcare expenditure, which has grown year after year. While the revised fee structure has been fully implemented, he acknowledged that the application process for fee waivers may be overly complicated.

“Can it be simplified so that the application process is less cumbersome? That is worth reviewing,” he said, pledging to discuss the matter with the Health Bureau.

He added that asset thresholds are necessary to ensure policy credibility, as the government must fully understand applicants’ financial situations.

Another caller, who suffers from lung cancer, said he must pay for targeted therapy every month and has had to return to work despite reaching retirement age. He described the burden as severe and said he receives no welfare support, leaving him uncertain about the future.

Chan said he had taken note of the concerns and reiterated that the government’s principle is co-payment according to ability. For individuals facing special circumstances, mechanisms are in place to provide assistance, and he said relevant officials could follow up on such cases.