My Take | John Tsang’s defence of budget giveaways fails to add up
Hong Kong financial secretary claims his relief measures have spurred economic growth, but in reality only the rich have truly benefited
Ahead of his annual budget release today, finance chief John Tsang Chun-wah has defended his much-criticised sweeteners or one-off giveaways. He claims his relief measures have spurred annual domestic economic growth by 1 per cent.
Leaving aside the wisdom or rather the wastefulness of it, it’s funny that few people question how he arrived at this figure. He then makes a further claim that this “1 per cent” serves the important purpose of stimulating the local economy in the face of weak global growth.
“Don’t underestimate the 1 per cent,” Tsang wrote. “It has played an important role in stabilising the local economy and labour market.
“Hong Kong needs domestic consumption to drive the overall economy, especially when world economic growth remains weak.”
READ MORE: Hong Kong budget – How sweet can the financial secretary be to business and ordinary punters?
That’s two claims for which he has offered zero evidence in support. I am no economist but it’s well known that when you put extra cash in the hands of poor or low-income people, they spend it quickly.
But it doesn’t make much difference when you give it to the rich or well-off.