In the wake of the global financial crisis, politicians have been falling over themselves to present proposals to stimulate the local economy and help the needy. But many of their ideas would incur huge public expenditure and are not well thought out. The Liberal Party is singing from its old script, advocating free shopping coupons to help the retail sector.
First floated during the severe acute respiratory syndrome crisis, the idea received a cold reception then. But with Taiwan adopting a similar measure, the Liberals are championing it again.
The Federation of Trade Unions has joined the chorus, advocating a HK$20-billion free-coupon scheme. The unionists' ally, the Democratic Alliance for the Betterment and Progress of Hong Kong, proposed a huge lucky draw, set up with HK$300 million from the government and HK$200 million from business, also to encourage private consumption.
Many such proposals cannot stand the test of economic analysis. Some are, in essence, political stunts.
Economists have long discredited the effectiveness of shopping coupons. The retail market might receive a shot in the arm, but the impact on the economy would be short-lived. In the end, only businessmen benefit.
If every citizen - rich or poor - receives the same value in coupons, the idea also falls foul of equity principles. Those on a low income would probably use all the coupons for daily necessities, and only the supermarket chains that effectively monopolise the market would gain, not the small vendors. Better-off consumers wouldn't care about the extra HK$1,000 or so. They may use the money to tip their servants or pay for fuel for their expensive vehicles. There would be no spending spree.
Some say the potential wastage could be avoided if only the underprivileged got coupons, but implementation would be costly.