Hong Kong Financial Secretary Paul Chan announced the budget for 2021-22 on Wednesday. The city’s economy has been hit hard by the pandemic, recording a deficit of HK$257.6 billion in the current fiscal year, with the economy shrinking by 6.1 per cent.
In addition to a series of tax deductions and subsidies to businesses and individuals, the government plans to distribute HK$5,000 electronic spending coupons to all adult residents, and offer government-guaranteed loans to the unemployed in hopes of reviving the economy.
HKFP rounds up the reaction as Hong Kong records its biggest economic decline for decades.
New People’s Party
Lawmaker Regina Ip said that while the [pro-Beijing] New People’s Party would not give a grade to the budget, ” I think in these difficult circumstances, it is a good budget and well worth our support.”
Nevertheless, Ip said her party had hoped for more support for middle-class families, including tax allowances for hiring foreign domestic workers.
Legislator Eunice Yung said she hoped for more support for the tourism and insurance industries following the announcement of the spending coupons.
“We can see that the tourism industry has yet to be revived…we hope that the government can consider more support for the industry,” said Yung. “I hope that the government can expand the use of the spending coupons.”
The Democratic Party slammed the Budget as “insufficient” and unable to meet the needs of Hong Kong people. Chairperson Lo Kin-hei also described the budget cut for embattled government broadcaster RTHK as “very strange” given the government’s recent criticism.
“Is it to continue criticising them next year after cutting their budget? Such as, ‘Oh after the budget cut you can’t deliver quality programmes’,” Lo added. “This is just a vicious cycle, making RTHK unable to do the work they want.”
Felix Chung, leader of the pro-Beijing and pro-business Liberal Party, said they were surprised by the budget as its provisions exceeded their expectations.
“The biggest highlight is obviously the electronic spending coupons. We requested HK$8,000 but HK$5,000 is also acceptable,” said Chung.
“We welcome the budget, but the financial secretary did not mention anything about the Employment Support Scheme (ESS). We hope that the chief secretary can consider another round of ESS supported by the anti-epidemic fund.”
Legislative Councillor Tommy Cheung said the electronic spending coupons were a good way of promoting electronic payments in general. But he said the government should not let citizens spend their coupons online as this would not necessarily benefit the local economy.
The pro-democracy Civic Party criticised the budget as a disappointment to all Hong Kong people regardless of their political stance.
“I think the budget failed to give Hong Kong people any hope for the future,” said former lawmaker Jeremy Tam. “They’re not only disappointed, they’re desperate.”
“In the past, when legislative councillors tried to seriously vet the funding [of white elephant projects], they were criticised for obstructing the administration,” said Tam.
Now that only pro-establishment members were left in the Legislative Council and even though all “white elephant” spending was quickly approved, citizens were left to deal with the aftermath when the government refused to support them because of the deficit, he said.
All pro-democracy legislators resigned from the Legislative Council late last year after four of their colleagues were disqualified.
The charity slammed the government for failing to respond to what it called a public demand for short-term unemployment aid, and said officials had used the deficit as an excuse to reduce welfare spending.
“The pandemic has continued for a year, the most deprived low-income workers are already struggling to feed themselves… the government should actively and directly help unemployed people to keep their heads above water,” said local director general Kalina Tsang.
Hong Kong Federation of Trade Unions
Legislator Alice Mak said the budget failed to give enough support to the unemployed or do anything to solve Hong Kong’s long-term housing problems.
“We urge the government to listen to our voice and to introduce a comprehensive unemployment subsidy scheme as soon as possible,” said Mak.
“And the special 100 per cent guarantee loan scheme is an alternative to help those unemployed, but it can definitely not replace our long-requested unemployment subsidy scheme,” Mak added.
Chief Executive Carrie Lam
Lam said in a statement she supports the measures proposed by Chan to revive the economy amid the pandemic, as well as the plans to help emerging sectors such as innovation and technology.
“The budget has also put forward effective measures to ensure prudence in public finance, which in turn will enhance confidence in Hong Kong’s fiscal strength and is conducive to maintaining our monetary stability,” said Lam. “I support the pragmatic approach in adopting a deficit budget amid the prevailing economic downturn.”
Pro-establishment lawmaker Michael Tien questioned the effectiveness of the spending coupons in reviving the parts of the economy that most needed support.
“For a coupon to be able to kickstart the economy, it has to be of a very short duration,” said Tien. “The HK$5,000 is going to be used over five months, each month has a limit of HK$1,000…and it can be applied to supermarkets… so actually that is a cost of living allowance.”
Tien said the government should shorten the validity period during which citizens can use the spending coupons, and set limits on stores which can accept them.