HK finance chief says HK$5,000 vouchers can be spent at wet markets and restaurants, vows to prevent misuse

27-Feb-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

Hongkongers will be able to use the HK$5,000 (US$645) vouchers promised to them at the city’s wet markets and restaurants, the finance minister has said, while pledging to prevent abuse of a scheme designed to boost local consumption.

Financial Secretary Paul Chan Mo-po announced in his annual budget address on Wednesday that every permanent resident or new immigrant aged 18 or above would receive the e-vouchers for local spending over five instalments, with registration hopefully to begin in the summer.

The government wanted to make the digital vouchers available to as many consumers and merchants as possible so they could be spent at wet markets, fast food outlets, restaurants, retail outlets and online shops, Chan told a radio show on Thursday.

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Several residents who phoned in to the programme argued the vouchers would be impractical for low-income groups who preferred to buy cheaper goods from family-run shops and wet markets, many of which were not equipped to accept payments from digital wallets or stored-value cards such as Octopus.

The finance minister responded that government coronavirus subsidies were available to help wet market stalls set up cashless payments systems using Octopus.

“We will take these suggestions into consideration when implementing [the e-voucher], and follow-up on those concerns,” he said, while conceding many details of the roll-out still needed to be ironed out.

Sze Lai-shan, from the advocacy group Society for Community Organisation (SoCO), urged the government to step up the introduction of electronic payments in wet markets, saying many of those on lower incomes would prefer to spend their vouchers on practical items.

“The government needs to assist wet market vendors in setting up the system, as many of them are elderly and aren’t familiar with these tools,” Sze said.

Sze, who works closely with low-income groups, said there was widespread hope for the HK$5,000 worth of vouchers to be disbursed in one go so people could afford to upgrade appliances such as washing machines, rice cookers and water boilers.

Concerns were raised on the radio show that people would make purchases using the vouchers only to return the items for cash refunds. It was also suggested some might abuse the system by using vouchers to buy insurance or investment products if online financial services chose to accept them as payment.

Whether Hongkongers living overseas or on the mainland would be able to use the vouchers to make online purchases from retailers based in Hong Kong was also on the minds of listeners.

Those who are frugal may use the voucher to cover daily expenses, at the same time, others who are in the position to spend anyway, would see this as a way to support local enterprises

Financial Secretary Paul Chan

“We appreciate the public for giving us many views on the operational details [of the vouchers], because we want to make the roll-out comprehensive,” Chan said, adding the government would examine how to prevent people from abusing the scheme.

He emphasized that the e-vouchers had a dual purpose both helping consumers and funnelling sales into small and medium-sized enterprises (SMEs) that had suffered amid the pandemic.

“After going through such a long economic recession, many SMEs and retailers have been starved [of revenue],” Chan said. As of January, retail sales had dipped for 23 consecutive months, with sales tumbling 24.3 per cent for all of 2020, the worst year on record.

But some callers questioned if encouraging people to go shopping was out of touch with reality given the number of Hongkongers now tightening their purse strings after losing their jobs or being forced to take unpaid leave.

“Those who are frugal may use the voucher to cover daily expenses, at the same time, others who are in the position to spend anyway, will see this as a way to support local enterprises,” Chan said, predicting the voucher programme would boost the local economy by 0.7 per cent.

However, Simon Lee Siu-po, co-director of Chinese University’s international business and Chinese enterprise programme, said the consumption vouchers would only have a small stimulus effect on the economy.

Based on the HK$36 billion earmarked for the scheme, Lee estimated that only about HK$7.2 billion per month would be injected into local retail, catering and service sectors.

Before the 2019 anti-government protests and the Covid-19 pandemic battered the economy, monthly retail sales in 2018 stood at HK$40 billion, with catering services generating HK$9 billion.

“[The government] still needs to focus on helping the heavily affected sectors,” Lee said. “Otherwise, the money will go to big retailers and major supermarket chains.”

Lee noted retailers might get around the staggered release of the vouchers by allowing customers to buy big-ticket items such as home appliances by redeeming the coupons in instalments.

Referring to the local consumption requirements, he also pointed out that some merchants operated as city businesses, but were also agents for foreign goods such as imported products or services.

The government had not clearly defined whether people would be able to use the consumption vouchers on services such as gym memberships, pet grooming or spa treatments, Lee added.

On how the vouchers could be spent, finance chief Chan said the government would partner up with existing licensed payment tools in the city, and several e-payment options would be made available.

A government source, without naming any e-payment platforms, previously said the administration was already searching for partners to facilitate the roll-out.

Some of the most widely used e-payment options in Hong Kong include stored-value Octopus cards, and e-wallets such as HSBC’s PayMe app, Hong Kong Telecom’s Tap & Go, Tencent-backed WeChat Pay, and Alibaba’s Alipay. Alibaba is the parent company of the South China Morning Post.

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu told a press conference on Thursday that residents who had previously registered and received the cash handouts last year did not need to resubmit their personal information when registering for the vouchers.

Hui said applicants simply had to provide details of their stored-value card or digital wallet so the vouchers could be transferred to their accounts.


Category: Hong Kong

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