Shopping coupons will enable people to start spending again

PUBLISHED : Tuesday, 16 December, 2008, 12:00am
UPDATED : Tuesday, 16 December, 2008, 12:00am

Referring to my letter ('Tax cuts, shopping coupons are appropriate moves in recession', December 1) where I suggested tax cuts and shopping coupons as short-term measures during the recession, Denise Tam said such measures would not help deal with the long-term situation ('Coupons not the answer to deal with crisis', December 10).

But before looking for a long-term solution to deal with the downturn, it is imperative that we resolve our immediate unemployment problems.

In this downturn, the retail and catering sectors are finding themselves struggling for survival, as consumers lose confidence and spend less.

No sales means no cash flow and banks will not give credit to businesses with a low cash flow.

Obviously, most businesses cannot survive if there is not enough cash coming in and this can cause a chain reaction, with more companies shutting down.

As a short-term measure to get consumers buying again, shopping vouchers from public coffers can be a catalyst to stimulate sales since these vouchers cannot be used for something else within a specific time. Once spent, these coupons become a cash flow for businesses and that would in turn generate further economic activities down the chain.

If implemented properly and sensibly, shopping coupons could help alleviate the stampede of imminent closures of businesses and job losses resulting from the economic downturn in the short term.

Furthermore, if the central government allows more individual mainland visitors to come to the city as a complementary measure, we should see real improvements and stability on employment in the retail and tourism sectors, at least for the first half of next year, when it is believed the downturn will be at its most acute.

To help administer this voucher scheme, the government could also offer temporary work to those from the banking sector who have recently been made redundant, too.

I think it is a short-term measure worth considering by the government.

Alex Tam, Sai Kung