Budget will do little to boost birth rate, Tsang admits

Financial secretary says a lack of money is not why Hongkongers are not having more babies

PUBLISHED : Friday, 28 February, 2014, 12:24pm
UPDATED : Saturday, 01 March, 2014, 4:54am

This week's budget will do little to boost the city's notoriously low birth rate, Financial Secretary John Tsang Chun-wah admitted yesterday.

Tsang made addressing problems created by Hong Kong's ageing demographic a key theme of his speech on Wednesday, but came under fire for not increasing tax allowances for parents.

Tsang told an RTHK radio phone-in programme that money was not the reason Hong Kong had the world's lowest birth rate last year.

"I don't think financial consideration is the main reason for the low birth rate," he said. "There are a lot of other considerations ... There are limitations in terms of what policies can do."

Previous governments had expanded the tax allowance, which allows parents to earn HK$70,000 tax-free for each dependent child. In 2005, then financial secretary Donald Tsang Yam-kuen expanded tax breaks and urged parents to adopt a "three-child" policy.

But parents have bemoaned a lack of living space and strain on school places amid an influx of children born locally to mainland parents. Advocacy groups have also urged the government and employers to adopt family-friendly policies including improved childcare.

One caller said he wanted more financial help.

"I am quite happy with your budget," said the caller, who described himself as middle-class. "But we need more measures for people raising young children."

Tsang also brushed off claims he was being too conservative in warning that a structural deficit could emerge in seven years if spending on health, education and welfare continued to grow. The projection was based on findings from the working group on long-term fiscal planning, which reports next week.

Tsang reduced the level of one-off sweeteners in his budget despite projecting another multibillion-dollar surplus.

"They did some forecasting until 2041," Tsang said of the group. "If the rate of growth of our expenditure exceeds the rate of growth of our revenue, we will run into a problem."

According to government demographic projections, some 30 per cent of Hong Kong's population in 2041 will be aged at least 65, up from 14 per cent now.

Just 7.9 babies were born in Hong Kong for every 1,000 people last year, Census and Statistics Department figures showed, a fall of 37.9 per cent from 2012. The fall reflected a ban on mainland mothers giving birth in the city.




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