Replenishing HK's War Chest During Covid

Carrie Lam modeling the Cu+ Mask that never took off in popularity...

It's hard to believe it's already September and no end in sight for the pandemic. Hong Kong's third wave seems to be under control, though the number of new cases continues to rise and fall. There were 12 today, though seven were imported.

During the past eight months, the government has doled out a lot of money, and luckily the city had saved a war chest full -- over a trillion Hong Kong dollars, though it is fast being depleted after giving every resident HK$10,000, wage subsidies of HK$9,000 per employee if employers took part in a scheme promising not to lay off staff, handing out money to every sector pleading for handouts, from tourism and restaurants, to gyms, education, transport, and beauty parlours to name a few.

Taxpayer money was used to buy full-page ads in newspapers

Oh and remember the government made and sent out Cu+ masks to every resident who applied for it too? It also sent out surgical masks, but they turned out to be faulty... and all those front page ads in many newspapers about the universal testing scheme...

Now lawmaker Michael Tien Puk-sun is calling on the government to dole out more money again, proposing that every resident be given another HK$10,000 to help them another few months, and help refill the war chest by imposing more taxes, such as on capital gains, luxury and dividends.

"I say this is the best time now to really start this discussion about introducing new taxes into our current very narrow structure, Tien said.

"Simply because we have depleted our reserve by almost half in the last six months, and God knows how much more the government needs to dole out before everything returns to normal."

Tien calling for the government to find new revenue streams

It's interesting Tien is calling for this, as the government has not budged on this issue, as from time immemorial it has depended on taxes from land sales for the vast majority of its revenue.

But he advises the authorities "not to pray that our land sales will come back".

Tien is right. Not only is the property market very soft, prices have dropped and so the amount of money the government is expecting to pull in from stamp duties will be much lower.

One wonders if the government will take Tien's advice and finally tax the rich further, but in the meantime the authorities are hitting up ordinary folk for money in the guise of fines.

Last week my hairdresser told me of her friends being fined by the police for not wearing masks outside, when they were just in the alley having a smoke. Talk about an expensive smoke, not just for your health but your wallet too.

Police out in force, giving out fines for not social distancing

The police have also fined people at protests for not social distancing, from HK$2,000 to up to HK$25,000, and many traffic wardens are being more diligent about giving out parking tickets.

This nickel-and-diming people is more of an opportunity for the police to flex their authority or perhaps they have a quota of fines they have to give out each month.

But these fines are a drop in the ocean compared to the zillions of dollars given out by the government.

Most people have had salary cuts, or been furloughed, so making them pay fines is not very productive.

It's time the government find other revenue generators -- much like the rest of us trying to survive.