Policy address 2023: Hong Kong to pay HK$20,000 for each newborn baby

Hong Kong Chief Executive John Lee announced a plan to pay parents a HK$20,000 newborn baby bonus among other incentives including tax-deduction, housing arrangement and child caring services in an attempt to reverse the falling birth rate.

“It is imperative that the Government set a firm policy direction to encourage childbearing amid our persistently low birth rate,” Lee said.

Hong Kong’s birth rate hit its record low last year, with only 701 live births per 1000 women, according to the latest statistics from Census and Statistics Department.

The one-off cash bonus of $20,000 will be provided to parents who are Hong Kong Permanent Residents for each baby born from today in Hong Kong. 

The government will also raise the accommodation-related tax deduction ceiling for home loan interest or domestic rents from HK$100,000 to HK$120,000, for those who live with their first child born today or after until the child is 18-year-old.

To further support those families with newborns, more priority will be given for them  in subsidised sale flats purchase and public rental housing allocation. 

Lee noted that from next April, the household and child allowances will increase 15% to alleviate the working family’s childbearing burden. More childcare centres are also planned to open in the coming years. Next year, the pre-primary child care assistance 

Sylvia Pun, 27, who is newly married, said the new policies inspired her to consider having a child. 

“This represents the government’s determination to encourage parents to give birth and raise children. I hope that there will be more comprehensive policy help in the future to dispel the worries of fertile parents,” she said.

However, Lee Tsz-han, 29, felt disappointed by the incentives.

“As far as I know, the cost of vaginal delivery in private hospitals generally ranges from HK$40,000 to HK$60,000,” she said, “HK$20,000 is far from enough.”

Lee has been married for five years and doesn't want to give birth, as the financial pressure of raising children is enormous even if the government has financial subsidies and tax cuts.

“What is much more urgent for new moms is flexible working hours,” she added.

According to a survey by The Family Planning Association of Hong Kong, 65.7% of its all-female respondents reckoned that allowing flexible working hours can increase the willingness to give birth, while only 54.9% thought childbirth cash bonus may work for them. 

Singapore has also been active in promoting fertility rates these years as well. It offers cash handouts for new parents, who will receive S$11,000 (HK$62,945) each for their first and second child, and S$13,000 (HK$74,389) for their third child and beyond.

Compared to other Eastern Asian countries, Hong Kong’s fertility rate in 2021 has already fallen below that in Japan, Singapore and Taiwan, according to the Census and Statistics Department.

The low fertility rate will result in population ageing and eventually population shrinkage, according to Cheung Ka-lok, an associate professor of sociology from Hong Kong Baptist University.

Forecasts from the United Nations show that Hong Kong will have the world’s oldest population by 2050, with 40.6 % of its population aged 65 and older.

“The shrinkage of the working population will be a serious challenge to economic development,” said Cheung. 

“With the declining birth rate, there will be fewer children to support their post-retirement lives. The government has to spend more on social welfare and healthcare, while there will be fewer taxpayers.”