03 March 2011

Hong Kong's Government Responds to Feedback

23 February 2011
In his budget speech, Hong Kong's Finance Secretary John C Tsang proposed a one-off injection of HK$6,000 into each worker's retirement accounts.  To assist more citizens in preparing for retirement, no salary ceiling would be imposed.  The proposal would not increase inflationary pressure.

24 February 2011
Mr Tsang faced the wrath of callers in a radio phone-in programme, who were disappointed with the government handouts.  Many criticised him for opting to inject the HK$6,000 into worker's retirement accounts, instead of giving them direct cash handouts.  The former would have tied up the money until they retired, while the latter would have given them immediate relief to rising inflation.  Mr Tsang defended his decision and said that cash rebates would worsen inflation.

2 March 2011
Under mounting public pressure, Mr Tsang announced that every permanent resident over 18 years old will get HK$6,000 cash, instead.  Salaried workers would also receive a 75 per cent income tax rebate capped at HK$6,000.

Mr Tsang brushed aside more measures to offset inflation.

It is apparently very rare for the Administration to amend its Budget in this manner, but Mr Tsang has been under pressure from legislators and the public.  Lawmakers had threatened to veto the bill in Parliament, while protesters were planning a mass anti-Budget rally.

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Notes

1.  Speech by the Financial Secretary John C Tsang moving the second reading of the Appropriation Bill 2011, 23 February 2011.

2.  "Hong Kong Finance Secretary under Fire Over Budget", Channel News Asia, 24 February 2011.

3.  "HK Bows to Pressure, Offers Handouts in Budget U-Turn", Channel News Asia, 2 March 2011.

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