On July 16, Hong Kong Chief Executive Donald Tsang announced a series of short-term relief measures to alleviate inflation. They involve the spending of US$1.41 billion from the government coffers.
Speaking at the Legislative Council question-and-answer session, Mr. Tsang said he hopes the proposals help low-income earners meet their daily expenses amid worsening inflation.
He said the Mass Transit Railway board has agreed to offer half-price concessions to students between certain stops. The MTR Corporation will announce details soon.
The government will pay another two months’ rent for most families living in public housing estates on top of next month’s rent subsidy.
Students receiving Comprehensive Social Security Assistance and those who will receive student financial assistance in the following school year will be given a one-time US$128.20 subsidy.
Two extra months’ payment of Old Age Allowance and an extra month’s standard rate payment of Comprehensive Social Security Assistance and Disability Allowance will also be offered to recipients.
Meanwhile, the employee retraining levy will be waived for two years to relieve the burden of hiring foreign domestic helpers in middle-income families. Government fees and charges related to livelihood will also be frozen for one year.
Besides providing half-year electricity cost subsidies to all households beginning in September, the government will offer the subsidies for an additional six months, increasing the total subsidy amount from US$230.76 per household to US$461.53.
The government has also earmarked US$12.82 million for the Social Welfare Department to work with non-profit organizations to provide short-term food assistance services to needy families.
To enhance price information on daily necessities, the government will help the Consumer Council expand the exercise to compare and report prices in supermarkets, shops and markets. It will also work closely with mainland China to ensure stable, adequate food supplies.
Mr. Tsang said the proposals will not fuel inflation because many are one-time measures, but they will likely cause a higher fiscal deficit and a fall in financial reserves. However, the government's sizeable fiscal surplus last year puts it in position to make additional commitments, he said, adding the proposals will not have major or long-term implications on public finances and the operating account.
Because the proposed waiving of the employee retraining levy involves law amendments, the government must obtain Executive Council approval before their scheduled implementation in September.
Noting inflation is a global problem, Mr. Tsang said that because Hong Kong is an open and free economy, it is difficult for the government to control price increases.
Although some people may not be covered in the proposal, most middle-class and low-income families should benefit from the measures. He said the government will also formulate long-term anti-inflation measures and is willing to discuss the issue with lawmakers.
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