Paul Chan's Short-Term Sweeteners

Chan's budget aimed at fighting Covid, helping businesses

Following Chief Executive Carrie Lam Cheng Yuet-ngor's announcement that universal testing will happen next month, those with means started booking the next flight out of Hong Kong. In the coming weeks there will be a massive exodus of people -- local, expat -- who have had enough of the government's half-hearted measures in dealing with this exponentially rising fifth wave and want out.

Why not, when the leader of Hong Kong has declared that as of next week children are on "summer break" and back to school in late April and will finish the rest of the school year in August, and a week or two later begin the new academic year.

Lam announced universal testing last night

The next generation have been hurt the most by this pandemic, now in its third year. And their long suffering parents having to work from home, now have to some how find things for their brood to do on their "summer break", but not meet any friends or take any classes.

Ah but wait -- Financial Secretary Paul Chan Mo-po has come up with some sweeteners for people today in his longest budget speech.

One of the first things he announced was all permanent residents 18 years and older, and new immigrants from the mainland will get HK$10,000 in electronic vouchers -- but in two stages. While that is great, again it will not benefit the small mom and pop shops, nor the wet markets. 

And it also sends a confusing message, as one economist says: "On the one hand, the government tells everyone to stay home for social distancing, but on the other, it asks you to go and spend. The policies are conflicting."

Permanent residents will get HK$10,000

There are many businesses that are on the verge of shutting down and giving out these vouchers will not save them.

Chan will make it easier for first-time home buyers to get a mortgage on 90 percent of the property's value, the maximum amount is HK$10 million, but who is left to buy them? Does anyone have the appetite, unless they know they are going to stay in the city for the long term?

To fight the pandemic, the financial secretary earmarked HK$22 billion to bolster its screening capacity and purchase rapid antigen tests, while another HK$10 billion will be invested in life science technology.

The city's 340,000 small and medium-sized enterprises will get access to a special loan scheme for another year from June, but is that enough to keep them afloat?

But meanwhile the police get to beef up their resources even more with HK$508 million for more gear and vehicles, while a whopping HK$5.1 billion will be spent on prisoners. Currently that amounts to HK$677,000, or maybe the government is expecting more people will be behind bars in the coming year?

More money spent on fighting Covid-19

As the government depends on land sales to fill its coffers, it is reasonable to see Chan propose a progressive rating system where those buying pricier flats will pay more in property rates. This, he says, could bring in HK$7.6 billion annually.

But what about education? Children have lost so much in the past two years. What is the government going to do for these students in terms of helping them get the resources and teaching they need? And in terms of healthcare, was there any talk of hiring more people to come to Hong Kong to help with caring for the sick?

Some economists felt the budget while it may help in the short term, does not have any long-term foresight in how the government will help Hong Kong's economy get out of the pandemic and restore its status as a financial hub.

"Some senior management of multinational corporations are leaving Hong Kong and they have alternatives, such as Singapore," said Simon Lee Siu-po, of Chinese University. "As far as the economic outlook in the medium term is concerned, it really depends on whether Hong Kong can restore free flow of people."

Not many are waiting around to find out.