Hong Kong Budget 2018-2019

Paul Chan’s cash handout plan praised for ‘bravery’ but he still fails to win some hearts

The finance chief’s move to give up to HK$4,000 to 2.8 million Hongkongers is cheered by the pro-establishment camp, but others say it’s not enough for the needy

PUBLISHED : Friday, 23 March, 2018, 9:34pm
UPDATED : Saturday, 24 March, 2018, 11:05am

By giving cash of up to HK$4,000 (US$510) to 2.8 million Hongkongers, Financial Secretary Paul Chan Mo-po secured smooth passage for his budget in the Legislative Council, even though he failed to win the hearts of the pro-democracy camp.

Pro-establishment lawmakers, who are in the majority at Legco, praised Chan’s announcement that he would share the city’s HK$138 billion surplus with 2.8 million more people, with most political parties pledging to support the bill.

2.8 million Hongkongers to get cash handout of up to HK$4,000 each, in ‘targeted’ scheme to share massive budget surplus

New People’s Party chairwoman, Regina Ip Lau Suk-yee, who had called for cash handouts of HK$3,000, said: “Chan came up short in sharing the benefits of economic growth, and we are very glad that he has redressed the problem.

“We will support the passing of his budget,” said Ip, who is also a member of Chief Executive Carrie Lam Cheng Yuet-ngor’s cabinet.

Starry Lee Wai-king, who chairs the Democratic Alliance for the Betterment and Progress of Hong Kong, said Chan showed “bravery” and that her party – the largest pro-establishment one in Legco with 13 seats – would also approve the budget.

Federation of Trade Unions lawmaker Wong Kwok-kin said the announcement represented a “step in the right direction,” though he chided Chan for not including cash handouts in his original budget announcement last month.

Chan came up short in sharing the benefits of economic growth, and we are very glad that he has redressed the problem
Regina Ip Lau Suk-yee

But pan-dems remained unconvinced by Chan’s additional goodies.

Democratic Party chairman Wu Chi-wai said that even with the handout, there was still a gap between the sweeteners given to the better-off and those who had been left out in Chan’s first announcement.

His party, which has seven seats in Legco, had not yet decided if it would support the bill.

Civic Party leader Alvin Yeung Ngok-kiu flatly said his party would veto the budget.

“The government has failed to explain why HK$4,000 is the right number,” Yeung said, reflecting the pro-democracy camp’s view that the amount should be higher.

He added his party was concerned with the additional cost of the scheme, as the finance secretary said the government would need to hire more staff to administer the funds.

Over HK$100 million went to efforts to distribute HK$6,000 each to six million adult Hongkongers in 2011, but the cost this time around could be even higher, given the more stringent eligibility criteria, Yeung noted.

Lawmakers from across the political spectrum had scolded Chan for helping the wealthy and neglecting the poor, as his HK$50 billion spending package mainly benefited the middle class with salary and profits tax rebates, even though he also dished out larger government allowances for the elderly and disabled.

The finance chief maintained that distributing cash to all was not part of this administration’s fiscal strategy and on Friday, stuck to his guns, calling the handout plan a “targeted scheme”.

But Polytechnic University political scientist Chung Kim-wah said the government had “buckled under pressure”.

“This selective cash handout is one way for them to save a little face, without having to completely kneel down in front of the public.”

As part of the extra HK$11 billion expenditure, residents aged 18 and above who do not receive welfare allowances, own property or pay income tax will get the full cash sum. Those who meet the first two criteria but pay low income tax or own property will get the difference between the handout amount and any tax concessions or rates waivers.

Government will look into helping those who missed out on Hong Kong budget perks and consider redefining ‘N-nothing’

Sze Lai-shan of the non-profit group Society for Community Organisation said the handout was “better than nothing” but did not match up to the relief that “N-nothing” households – defined as those who do not receive subsidised housing or welfare assistance but do not earn enough to buy a home or benefit from tax breaks – used to get.

The allowance by the Community Care Fund, a public-private trust fund, was launched in 2014 but scrapped two years later when the government said there was a sufficient number of other subsidies these households could apply for.

“Under that scheme, a family of four living in a subdivided flat could get HK$13,000, but now it’s only the parents who will get a combined HK$8,000,” Sze said. “They will not be able to get any student subsidies because the kids are not yet in school.”

The Post also spoke to a woman surnamed Cheung who said she would put the cash handout towards the rental of her 65 sq ft subdivided flat on the roof of a house.

The 55-year-old widow said she spent HK$3,000 per month on rent and utilities, and worked six days a week at a cha chaan teng.

Cheung, who has been waiting for a public rental flat for six years, asked that the government provide regular allowances to people like her for housing and medical expenses.

Additional reporting by Naomi Ng