City Beat | Spending smart at a testing time: what next with the Hong Kong government’s cash handout?

Financial chief Paul Chan must be wondering how to encourage the city’s residents to spend HK$10,000 cash gift

But can he afford to make handout a new normal as Hong Kong strives to remain an international financial hub while facing the national security law

Reading Time:2 minutes

Financial Secretary Paul Chan announced the cash handout in his budget in February. Photo: Felix Wong

Published: 4:05pm, 28 Jun 2020Updated: 11:16pm, 28 Jun 2020

“Money earned is not yours, only money spent belonged to you,” Antony Leung Kam-chung, Hong Kong’s financial secretary from 2001 to 2003, once famously claimed while explaining his fiscal philosophy.

Whether one agrees with Leung or not, it does not take a renowned economist to tell that smart spending matters, provided, of course, one has a disposable amount. It is the case not only for individuals and families, but especially so for a government.

And that seems to be what current financial chief Paul Chan Mo-po is pondering upon. Chan these days must be scratching his head over how to encourage Hongkongers to spend the HK$10,000 cash (US$1,300) handout promised in his February budget.

Hong Kong is quite a city of paradox. While there is so much anxiety over Beijing’s unwavering determination to impose a tailor-made national security law on the city, many are experiencing a moment of relief, even excitement, as banks prepare for payments to the first batch of early-bird applicants in July.

Commuters walk past a large banner promoting the national security law at the Star Ferry Pier in Tsim Sha Tsui. Photo: Sam Tsang

But common sense says the reality of how to spend the money is another matter. For Chan, it is a total of HK$71 billion from the government reserve, money well spent to ease the pain of Hongkongers suffering in this unprecedented economic catastrophe brought about by the coronavirus pandemic.

He therefore has an even bigger ambition with such a huge amount: to boost consumption, which will hopefully benefit a range of related businesses at this time of inevitable recession.

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.css-1m2rp1p{color:#34b8b5;}City Beat | Spending smart at a testing time: what next with the Hong Kong government’s cash handout?

City Beat | Spending smart at a testing time: what next with the Hong Kong government’s cash handout?