Deficit budget brings delight - $10,000 ready this August... hopefully

Top News | Sophie Hui, Cindy Wan and Angel Kwan 27 Feb 2020

Financial Secretary Paul Chan Mo-po finally decided to hand out HK$10,000 to about seven million adult Hong Kong permanent residents costing HK$71 billion as he heeded calls from across the political spectrum to help the SAR ride out the coronavirus outbreak.

He also laid out HK$120 billion worth of relief measures that would see a high of HK$139.1 billion by March 31 next year.

The deficit this financial year ending March 31 will be HK$37.8 billion - the first deficit in 15 years.

Chan said the government aimed to start distributing the HK$10,000 handout this summer.

This measure is expected to benefit 6.9 million permanent residents aged 18 and over, involving expected expenditure of about HK$71 billion. HK$1 billion will go on administration fees.

"I have to emphasize that, although the cash payout scheme involves a huge sum of public money, it is an exceptional measure taken in the light of the current unique circumstances and will not, therefore, impose a burden on our long-term fiscal position," he said.

"I consider that, with ample fiscal reserves, the government has to increase public expenditure amid an economic downturn to stimulate the economy and ride out the difficult times with members of the public."

The economy has entered "a harsh winter," he said, and the government hopes to stabilize the economy as soon as possible.

Eligible recipients should be 18 or above before March 31 next year and the registration deadline would be December 31 next year, a government source said.

Chan said the government has studied the proposal to hand out spending vouchers but the procedures for vouchers would be complicated and could be open to counterfeits.

"If we want the money to be in citizens' hands as soon as possible, and to stimulate the economy and to consume together, it would be better if the procedures are simple and quick," he said.

Chan said the government had set the amount at HK$10,000 as it hopes to recover the economy as quickly as possible and to help businesses get back on track to maintain jobs, after the epidemic, which he expected to die down in the summer, and people can then begin to spend.

Asked if he wanted to use the HK$120 billion relief measures and the cash payout to save the low popularity of the government and top officials, Chan said: "I think it's very important for us to do the right thing, whether it will help our popularity or not, it's irrelevant."

The government still has not come up with a detailed plan to distribute the payout, but it will likely be handed out by bank transfer to a local bank account or by check mailed to a registered address.

Based on its experience of giving HK$6,000 sweeteners in 2011, the government expected the registration period to start in August this year.

Qualified citizens will need to register basic information, including name, ID card number, bank account details, on an online system or fill out papers obtained from banks and government departments.

Hongkongers who have migrated overseas do not need to come back in person as they can receive the money as long as they register and have a local bank account.

The government is also considering opening registration to the elderly first to distribute the handout in batches.

Asked why the government did not freeze the number of civil servants, Chan said it is necessary to increase civil service manpower to handle the new measures announced in the policy address and budget in the past few years.

Chief Executive Carrie Lam Cheng Yuet-ngor said the cash payout is a justifiable and effective measure in view of the "extraordinary challenges that our community is facing."

"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.

The Chief Secretary for Administration, Matthew Cheung Kin-chung, said the HK$10,000 cash payout is in response to society's demand. It can encourage and boost local consumption and help citizens to overcome this difficult time.

Pro-establishment lawmaker Gary Chan Hak-kan, of the Democratic Alliance for the Betterment and Progress of Hong Kong, expressed concern at the time it would take for the administration to distribute the HK$10,000.

"After all the procedures in the Legislative Council - excluding the possible filibustering - citizens will only receive the amount of money by June or July at the earliest," he said.

"We suggest financial secretary take this handout out from the Budget, and discuss it separately in the finance committee," Chan said. But some pro-democracy lawmakers might vote against the Budget as they are unhappy about the government's plan that "bundled" the budget increase for the police force.

The Civic Party's Alvin Yeung Ngok-kiu said the party could not support the proposal "unless the government cuts the budget for the police force."

Yeung also urged the government to take the HK10,000 out from the budget and merge it with the anti-epidemic fund, so that it could be passed in the finance committee.

The Council Front's Eddie Chu Hoi-dick said it is the government's "conspiracy" to mix the police budget with the cash handout.

"This is how they force lawmakers not to vote against the plan just like holding Hongkongers hostage," Chu said.

More reports:

$10,000 means how many masks?

Bigger tax breaks for wage earners

12-step plan to help firms, save jobs

Fixed-rate mortgage plan in the works

Cash to boost police numbers

Chan seeks to plant ideas

$566m for hospitals to keep talent

Editorial:

Hand out the cash, fast



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