Consumption stimulus expected by May

Chief Executive Ho Iat Seng has disclosed that he expects the consumption stimulus measure to be implemented by May, after the amendment to the Annual Budget.

During yesterday’s parliamentary question-and-answer session, the head of the government gave this indication in reply to lawmaker Wong Kit Cheng’s question. Her question, the first in yesterday’s plenary, focused on the speculated consumption stimulus measure.

“We hope to implement the measure quickly,” Ho said, admitting to the actuality of the scheme. He added that the government has heard opinions from society and is heading in the direction of a consumption stimulus scheme.

Ho recapped that a similar scheme last year had helped many small and medium enterprises, not only in terms of continuation of business, but also in retaining many local residents in employment.

The reason that details of the scheme are still yet to be announced is that the Annual Budget needs to be amended and the amendments passed by the parliament. Only then, he said, can he promulgate Executive Regulations to stipulate the use of the stimulus fund.

The head of the government stressed that he does not want to repeatedly amend the Annual Budget, which is why the financial team within the government is working to refine this upcoming amendment.

He was, in effect, recapping an earlier disclosure on the scheme by Lei Wai Nong, secretary for economy and finance.

In addition, Ho explained that, in each fiscal year, the government only has 3% of the Annual Budget initially approved as auxiliary funds, hinting that much mathematics has to be done.

He also addressed the fact that many found the cash handout – officially called the Wealth Partaking Scheme – critical to their yearly budgeting. “Many residents use the cash to settle utility bills and rentals,” Ho said.

However, he added, many have not been affected by the Covid-19 pandemic financially, such as civil servants, because their salary has not been decreased; neither were they forced to furlough.

Therefore, as the boss of the civil servant team, he encouraged civil servants to spend the cash handout, their tax returns, and the upcoming consumption stimulus.

The cash handout cost the government about MOP7 billion, which is nearly the sum of the city’s annual retail revenue, which reached MOP8 billion, according to Ho. With this said, he hinted the cash handout would almost be able to support the city’s annual retail revenue.

He encouraged residents with spending power to spend the money returned from the government in order to keep the economy revolving.