Global Financial Market Review

An economist on Tuesday said any fresh round of spending vouchers would probably not bring long-term benefits to the economy, arguing that two previous handouts did little to lift retail sales.

Hongkongers received a $10,000 handout last year and $5,000 the year before, and Financial Secretary Paul Chan is facing calls to offer a new round of vouchers in his budget on February 22.

But Simon Lee, an honorary fellow at the Chinese University's Asia-Pacific Institute of Business, said vouchers may not be the best way to revive the economy.

"I think there's no need to hand out spending vouchers this year. It's more important to get the economy back to pre-pandemic levels. The vouchers can only boost the economy in the short term," he told an RTHK programme.

Lee noted that retail sales grew to almost $32 billion last October when the previous round of vouchers was distributed, but then dipped below $30 billion just a month later.

The consumption vouchers, designed to lift the economy during the Covid pandemic, were issued via electronic payment systems or Octopus cards, and could be used at local shops, catering businesses and service providers, or their online platforms.

A unionist lawmaker told the same radio programme that more vouchers were necessary, saying many businesses were still struggling to stay afloat despite the end of Covid restrictions.

Kingsley Wong of the Federation of Trade Unions reiterated the party's call for a new round of vouchers that can be used to pay everyday items such as water and electricity bills, unlike previous handouts which could only be used for shopping, dining and services.

"Many citizens have been suffering for three years. We are seeing light at the end of the tunnel, but the economy has not fully returned to normal yet. So I think it's important that the government gives us some help," he said.

On Sunday, financial secretary Paul Chan said he's still undecided on whether to give out more vouchers for the year, as he has heard divided opinions on the matter. Executive Council convenor Regina Ip said on Monday that she felt further vouchers were not the best use of government resources.