Budget 2024: People want more supplies towards new births and families with babies

People are disappointed by the lack of new policies for new births and families with babies in the latest budget speech with the problems of low birth rates and high costs in the city.

Shin Yoon Jung, 37, a housewife who anticipates the birth of her child this April, expressed disappointment over this budget proposal. 

"I am really disappointed that the proposal has no real benefit for a pregnant woman. I think one of the factors behind Hong Kong's low fertility rate is economic factors," Shin said.

Although Hong Kong provides a subsidy for those who give birth, the financial support needs to be more adequate even for the costs of diapers and formula under the city's high cost, Shin explained.

The Hong Kong SAR government announced in the last policy address that it would provide a one-time cash bonus of HK$20,000 for each baby born after Oct. 25, 2023, with parents who are Hong Kong permanent residents.

Bosco Yuen, 21, a single woman, said:“ I think the economic and housing issues most affect Hong Kong people’s fertility.”

“It costs more than HKD 20,000 to raise a baby. Buying baby supplies already costs a lot of money.” Yuen added

As Shin's child is coming up this April, she was concerned about raising a child in Hong Kong, particularly regarding the economic aspect. Her primary worry revolves around "financial problems."

"I am concerned about living with the baby in our current apartment,” Shin said. “My husband and I are looking into expanding our living space, but the thought of paying over a million dollars for a small additional room is quite burdensome."

According to World Bank statistics, as of 2020, Hong Kong's total fertility rate was 0.87 births per woman, making it the second lowest among 52 Asian countries. 

Korea ranked last with 0.84 births per woman. Singapore's fertility rate was also low at 1.10 births per woman, placing it fourth behind Korea, Hong Kong, and Macau. 

Last year, the Hong Kong government raised the child allowance for the first time in five years as part of a policy to encourage births in response to a declining birth rate and an ageing population. 

Children born in the 2023/2024 fiscal year are eligible for a combined primary and supplementary allowance up to HK$130,000 from HK$120,000, which is estimated to benefit 324,000 taxpayers and reduce tax revenue by $610 million annually, according to the budget speech 2023.

However, the budget for this fiscal year does not announce a further increase. 

Chan still thinks that the current environment in Hong Kong is not suitable for childbirth; these measures cannot fundamentally solve the problem caused by the high consumer prices in Hong Kong.

Cheung Ka-lok, an associate professor at Hong Kong Baptist University who is an expert in demography, explained that Hong Kong's long-term low birth rate leads to a decline in the labour force, subsequently having a negative impact on the Hong Kong economy.

 "So now the current total fertility rate is around 0.70, and the lower the fertility rate, the more rapid population ageing will be. Population ageing will result in a shrinking workforce,” Cheung said. “This can negatively affect political and economic growth. When you have fewer people working unless people are working with higher productivity, the GDP per capita will reduce.” 

He emphasised that raising Hong Kong's birth rate can only be achieved with more than one or two financial support measures. 

"When you have children, then we are going to pay the parents some money. This kind of practice isn’t usually very effective in boosting the fertility rate. So it requires a very comprehensive policy package," he explained.