Opinion | Hong Kong budget: end consumption vouchers and let the city get back to business

Consumption vouchers were an exceptional measure to get people through difficult times – times which are thankfully coming to an end

Instead of handouts, we should be investing our limited reserves into bringing people, businesses and profits back to our newly reopened city

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Crowds in Causeway Bay on August 7 last year. A number of economists have made it clear they feel the universal distribution of consumption vouchers is no longer necessary. Photo: Sam Tsang

Published: 6:45am, 30 Jan 2023

Financial secretary Paul Chan Mo-po is a gifted politician – and it seems that, with every year he takes on the annual exercise of preparing for and delivering the budget, he gets better at it.

Chan has mastered the art of managing expectations. For the past few years, he has prepared the public for the worst, highlighting the challenges brought by the huge deficits Hong Kong has been running, plus shrinking reserves, and yet delivering more, especially when it comes to handouts.

The first round of consumption vouchers – HK$5,000 (US$640) each – were handed out in 2021. Chan doubled that to HK$10,000 for 2022. Naturally, with this year’s budget expected to be delivered in less than a month, the focus is on whether handouts in the form of consumption vouchers will be on the books.

Chan has called the consumption vouchers “expensive” and pledged to keep the city’s expenditure within limits in light of the economic challenges projected to exceed HK$100 billion (US$12.7 billion) for the city’s current financial year and reserves falling to about HK$800 billion. But yet, Chan said he remained open to considering a new round of consumption vouchers.

It was not too long ago that Chan was adamantly against cash handouts – he only buckled under intense pressure in 2018 and introduced the Caring and Sharing Scheme, for which eligible residents could apply for a HK$4,000 handout.

Indeed, to continue an expensive measure when there’s not enough cash and only 11 months’ worth of reserves in the bank, and while there are rather a lot of bills and large-scale projects to pay for, doesn’t seem like a prudent way of managing our public finances.