Explainer | Hong Kong consumption vouchers: everything you need to know about the latest handout, who is eligible and which industries are set to benefit
- Government will disburse next tranche of consumption vouchers on October 1 as part of HK$5,000 scheme
- Economists, business leaders expect coming handout to benefit flight and travel agencies more than retail sector, citing recent easing of travel curbs
Hongkongers will receive the next tranche of the HK$5,000 (US$636) consumption vouchers from Saturday after the government previously disbursed HK$2,000 in August as part of the scheme.
The initiative was first introduced last year in a bid to boost the city’s economy amid the Covid-19 pandemic, with each eligible resident receiving e-coupons worth HK$5,000. The second iteration of the scheme doubled the amount but split the handouts into two batches, the first of which was issued in April.
The Post outlines what you need to know about the latest distribution of e-vouchers.
Hongkongers get new e-voucher cash on Saturday. Will they spend it on travel?
Who can get the consumption vouchers?
Hong Kong permanent residents aged 18 and above are entitled to collect the vouchers.
The government has extended the scheme to cover people in Hong Kong eligible for permanent residency while excluding locals planning to emigrate.
For the former group, no minimum period of stay will be required for eligibility, but they will receive HK$5,000, half of the scheme’s total. Financial Secretary Paul Chan Mo-po had previously said the decision would add about 300,000 recipients, many of them classified as talent, entrepreneurs and students.
People who are planning to emigrate or have been absent from Hong Kong for three consecutive years between June 18, 2019, and June 22 this year “without specific reasons”, such as studying or working outside the city, will be excluded from the scheme, up from the previous two years.
Residents with specific reasons for remaining outside the city, for example, elderly Hongkongers living in Guangdong or Fujian province under officially recognised retirement schemes, will still qualify.
How will the vouchers be distributed?
Residents can store the e-vouchers in any of six service providers – after two newly added operators, Bank of China’s BoC Pay and HSBC’s PayMe, joined Alipay HK, Octopus, Tap & Go and WeChat Pay HK.
AlipayHK is operated by Ant Group, an affiliate of Alibaba Group Holding, which owns the South China Morning Post.
Residents using Octopus to collect the vouchers will receive the second tranche of HK$2,000 on October 1. Once the cumulative spending from both tranches has reached HK$4,000, the remaining HK$1,000 will be disbursed between December and April next year.
Those using any of the other five service providers will receive their remaining HK$3,000 on October 1, with both vouchers expiring on February 28 next year. The first HK$2,000 was handed out in August.
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Where can people spend their vouchers?
Recipients can use the vouchers on public transport, at restaurants, retail shops or supermarkets, or online stores that accept payments by any of the six service providers.
The consumption voucher cannot be cashed or used for person-to-person payments. It also cannot be used for purchases from merchants located outside Hong Kong. Education expenses, donations or payments to the government such as taxes, licence fees, tunnel fees will also be excluded.
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But economists have predicted more recipients will spend their e-vouchers on outbound travel products, such as booking overseas hotels and holiday tours, citing the recent launch of the government’s “0+3” entry scheme on Monday.
The new policy has scrapped Hong Kong’s long-standing hotel quarantine requirement for inbound travellers in favour of three days of medical surveillance at either home or a hotel.
The vouchers can be used to book air tickets and hotel rooms from local travel agencies and e-platforms. Residents can also buy flight tickets online with Hong Kong-based airlines, such as Cathay Pacific. However, the handouts cannot be spent overseas.
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How has the voucher scheme contributed to Hong Kong’s economy?
The government estimated in March that disbursing the HK$10,000 e-vouchers would boost the economy by 1.2 per cent.
When authorities released this year’s first round of HK$5,000 vouchers in April, retail sales for that month rose by 11.7 per cent year on year, ending a two-month decline.
During the same period, the total monthly sales value also increased to HK$30 billion. The figure included a more than 40 per cent surge in purchases of electrical appliances and other consumer durables.
Authorities are set to share data on the economic impact of the August tranche on Friday, but said they expected the coming handout would further boost consumer spending.
The scheme was introduced last year and boosted gross domestic product by 0.7 per cent, according to the government.
Will the new tranche have a smaller economic impact?
Economists and business leaders have predicted the hospitality and retail sectors would receive less immediate benefits from the coming handout compared to the batch disbursed in August, with consumers expected to use the vouchers to cover outbound travel expenses.
Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, said the latest round of vouchers could boost the growth of Hong Kong’s gross domestic product by 0.7 per cent. But he added that the overall impact would depend on whether such spending could drive any economic activity.
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But Ng said he believed any ripple effect caused by the vouchers would not be as strong as previous handouts, citing Hong Kong’s ongoing anti-epidemic restrictions and an anticipated period of spending on outbound tourism.
The launch of the “0+3” scheme also meant more households would consider saving for overseas trips, which was not an option in August, he said. The economist added that airline and travel agencies would likely benefit more from the coming tranche than the retail sector.
