More Questions on HK$5K Handout

Chan (centre) on the phone-in show talking about the budget

 

As part of the budget, Financial Secretary Paul Chan Mo-po announced every permanent resident and new immigrants from the mainland will receive HK$5,000 -- in the form of an electronic voucher that will be distributed five times at HK$1,000 each. The amount cannot be accumulated and must be used within a certain period of time.

Cashless payments will be set up at wet markets

Chan explains this is a way for the money to be used locally to stimulate the economy and to help small businesses. 

While he has good intentions, it doesn't seem like Chan thought through his idea, or his advisors did not explain that many local shops, particularly wet markets don't use electronic payment, and many who actually need the HK$5,000 don't necessarily know how to use electronic banking, particularly on their smartphones -- if they have them.

During a phone-in radio show, Chan received a lot of calls regarding this, and the financial secretary said the government would help wet market stalls setup cashless payments to use Octopus.

"We will take these suggestions into consideration when implementing [the e-voucher], and follow-up on those concerns," he said, while conceding many details of the roll-out still needed to be ironed out.

Sze says the poor need the HK$5K handout asap

Sze Lai-shan, from the Society for Community Organisation (SoCO) that works with those in poverty, said the government should step up implementing electronic payments in wet markets as those with lower incomes would rather spend their money on necessities.

In addition, she said this segment of people would like to get the HK$5,000 in one go so that they can purchase badly needed big-ticket items such as washing machines, rice cookers and water boilers.

Smart callers pointed out there could be people who buy something using the electronic vouchers and then return the item for cash, or use the vouchers to buy insurance. Did the financial secretary think of that? 

Another question was how Hong Kong residents living outside of the city could use the vouchers. 

Chan said the government would examine how to prevent people from abusing the scheme.

It doesn't sound like it was completely thought out... did any of his advisors raise red flags before Chan put this in his budget? Or did they think they would just deal with it later?

Has Chan (centre) thought of all the loopholes?

Other callers wondered if encouraging people to shop was the right thing to do when some were scraping by. However, if this money can be used in wet markets, then that would probably help a large number of people put food on the table, though probably only for say half a year depending on the time limit of each voucher. Is it a month? Six weeks? Two months?

Simon Lee Siu-po, co-director of Chinese University's international business and Chinese enterprise program, said the consumption vouchers would only have a small stimulus effect on the economy. While HK$36 billion is earmarked for the scheme, Lee projected only about HK$7.2 billion would be injected into local retail, catering and service sectors.

To compare that to before the anti-government protests in 2019 and the coronavirus pandemic last year, monthly retail sales in 2018 was HK$40 billion and HK$9 billion in catering.

"[The government still needs to focus on helping the heavily affected sectors," Lee said. "Otherwise the money will go to big retailers and major supermarket chains."

He also hinted retailers could get around the staggered vouchers by allowing customers to buy big-ticket items in installments.

Has Chan thought of that too? Would that be allowed?

So many questions, not enough answers... yet.