Shopping vouchers short-term solution, experts caution
Retailers want the government to hand out shopping vouchers to get people spending, but economists warn that the benefits could be short-lived.
Caroline Mak Sui-king, chairwoman of the Retail Management Association, said coupons could inject much-needed cash into the retail sector and were a better way to give people some financial relief than, say, a tax rebate.
'If it is a tax rebate, that means the money is only going back into people's wallets, but they may leave town to spend their money,' Ms Mak said on a radio programme yesterday.
'But one advantage of giving out these coupons is that, taking out the cost of implementing it, the money could go back into the retail market.'
Taiwan unveiled a similar measure on Tuesday, saying each of the island's 23 million residents would receive NT$3,600 (HK$850) worth of shopping vouchers to stoke local consumption. The vouchers would be given out just before the Lunar New Year on January 26 and expire at the end of the year.
Ms Mak said the Hong Kong government could hand out HK$1,000 worth of vouchers per person in tranches - perhaps HK$300 per quarter - instead of a one-off handout. She also predicted retail sales around Christmas would drop by 5 per cent to 8 per cent compared to last year.
Andy Kwan Cheuk-chiu, an associate professor at Chinese University's department of economics, said, however, that handing out vouchers was equivalent to giving money to retailers and it would bring only short-term relief.
'It's just like handing out a sum of money to the retailers, so they don't need to offer big discounts for their stocks like what they are doing now.
'But the problem is the effect would only be short-term and you might not be able to see the effectiveness after one quarter,' he said.
The chairman of Centaline Property Agency, Shih Wing-ching, also had doubts about the idea.
Mr Shih, who is also a member of the chief executive's Taskforce on Economic Challenges, suggested the value of the vouchers would not be enough to make a significant difference.
Many people would use the vouchers and save their own money.
And in another sign that the economic uncertainty is taking a tighter grip on society, a survey released yesterday found that nearly 30 per cent of parents would have put off having children if they had known the economic crisis was coming.
The survey involved 350 parents who filled in a questionnaire supplied by Health Link, a website run by local publication Baby Magazine, early this month.
Findings showed 27.3 per cent of interviewees said they would have changed their plans for having another baby if they had known the economic turmoil was coming.
Taiwan is giving its 23 million residents shopping vouchers to encourage domestic spending
Each person will receive, in New Taiwan dollars,: $3,600