Lawmakers Question Lower Handouts, Stocks Tax Hike

The pro-government Legislative Council largely cheered Financial Secretary Paul Chan’s latest budget on Wednesday, though questions were raised about the effectiveness of his HK$5,000-per-resident spending voucher giveaway, a controversial hike in taxes on stock trades, and a substantial cut in handouts to the poor and the middle-class from the previous year.

Roundtable lawmaker Michael Tien was the most blunt in his criticism of the plan to give all adult permanent residents and new arrivals HK$5,000 in spending vouchers.

“I do not believe it would kick-start the economy in any way,” he said.

Sources have told RTHK the sum will be given out to consumers in five installments of HK$1,000, with people having to spend each installment before they can receive the next.

Tien said this is a mistake, saying the money should instead be pumped into the economy in one go.

He also said he understands that people would be able to use the vouchers in supermarkets, which he thinks are the last sector that needs more help.

“The food business and the supermarkets… have never been a victim of the entire Covid pandemic period,” Tien said. “So the victim of the Covid pandemic is actually the so-called impulse item purchasing [businesses]…. entertainment and all that, and I don’t think this is going to help those industries,” he concluded.

The Business and Professionals Alliance, though, took credit for proposing the spending voucher idea, and welcomed its inclusion in Chan’s spending blueprint.

It also said it was pleasantly surprised at the proposed launch of a new low-interest loan scheme for the unemployed, where people who have lost jobs can apply for up to HK$80,000 in loans fully guaranteed by the government; with the 1 percent annual interest rate fully refundable provided the applicant repays the loan in full and on time.

But the group wasn’t at all pleased with the 0.03 percent increase in stamp duty for equity trades, saying the hike is ‘unacceptable’.

BPA Lawmaker Priscilla Leung also said the government should have given the needy the same level of handouts as it did last year, noting that recipients of various government welfare programmes are only getting an extra half month’s worth of payments.

"The Financial Secretary has really asserted his wisdom to provide such an unemployment loan, which is completely not easy and we haven’t expected that," she said.

“I think if he could take our advice, he would earn more support… [by not cutting] any kind of subsidies for these needy groups such as public housing tenants, ecetera.”

New People’s Party chairwoman Regina Ip, meanwhile, lamented Chan’s decision not to take up her group’s proposal for up to HK$55,000 in tax breaks for middle-class families who hire foreign domestic helpers.

“Domestic helpers are very important to middle-class families, and because of a shortage of foreign domestic helpers, a lot of families have been compelled to pay a lot more so a tax allowance would be beneficial to them,” Ip said.

At the same time, she said the budget is “a good budget well worth our support”, though she refused to give it a letter-grade.