Hong Kong residents, new arrivals to receive consumption vouchers; won’t boost economy long term, say experts

Financial Secretary Paul Chan Mo-po announced in his budget speech this morning that eligible residents and students who came to live in Hong Kong through various admission schemes will get consumption vouchers worth HK$2,500 for the first time. 

Hong Kong permanent residents and adult new arrivals will also receive two installments of vouchers worth HK$5,000 starting in April.

This comes after the government’s considerations of the “current economic situation, people’s livelihood and the government’s financial position,” Chan said.

Yet some experts have questioned its effectiveness in boosting the economy. 

“Consumption vouchers will give private consumption a short-term boost while it is not sustainable,” said Alison Leung, a financial journalism lecturer at Hong Kong Baptist University. 

She said Hong Kong needs sustainable measures, such as, promoting the tourism industry and attracting foreign investment. 

“More consumption vouchers would put a significant burden on the budget as the estimated spending on consumption vouchers in 2022-2023 was about HK$66.4 billion, and Hong Kong recorded a negative economic growth of 3.5% last year,” she said.

The issuance of consumption vouchers comes despite the fiscal deficit for this financial year reaching HK$140 billion rather than the estimated HK$56 billion.

Lee Shu Kam, head of the Economic and Finance Department at Shue Yan University, agreed that the universal distribution of the consumption voucher scheme lacks significance.  

“Unlike what the government expected, people may save money for traveling when the border reopens, posing less effect in stimulating the local economy,” he said. 

He added that the voucher schemes should target unemployed and low-income residents rather than the general public. 

Student Cherry Chan, 19, thinks that the cash vouchers are valuable. “They are helpful, especially for students who just turned 18, so they can spend it on electronic devices for studying,” she said.

Middle-aged married couple the Wong’s said they would rather the government distribute the vouchers to those in need. “E-vouchers are unnecessary to us. We don’t think it’s a must since it will cost a lot, considering there’s a huge deficit this year,” they said.

Chan said he remains optimistic about Hong Kong’s economic growth. “I forecast that the Hong Kong economy will see a visible rebound this year with growth of 3.5% to 5.5% for the year as a whole,” he said in his speech.