The Hong Kong government has received over 2 million applications for its Cash Payout Scheme on the first day of registration, according to a government press release yesterday – over a quarter of Hong Kong’s population of 7.49 million. The registration period for the scheme will run from 21 June 2020 to 31 December 2021.
The cash payout scheme, which was first announced in late February as part of a wider budget initiative worth HKD 120 billion (USD 15.48 billion), promises HKD 10,000 (USD 1,290) to every permanent HK resident aged 18 or above. It aims to stimulate a deteriorating economy by relieving individual financial pressures, whilst encouraging consumer spending to better support local businesses.
Hong Kong Financial Secretary Paul Chan Mo-Po has estimated that the universal cash payout would benefit 7 million of the city’s population, easing financial burdens and combating economic turmoil. Chief Executive Carrie Lam has also stated that “The cash payout will help to make ends meet in their hour of need…and inject some much-needed impetus into the economy.” However, the government is anticipated to incur a record budget deficit of HKD 139 billion after months of heavy public spending in the wake of severe political unrest and the more recent coronavirus pandemic.
The city’s economy has taken a heavy blow in light of recent social distancing measures – in particular, tourism, hospitality, and food and beverage industries have been particularly hard-hit. Hong Kong’s unemployment rate has increased steadily for the last 8 months, reaching 5.9% between March and May 2020. Combined with a politically volatile environment and an economic recession, Hong Kong businesses have also seen a surge in foreclosures, with a quarter of Hong Kong’s retail stores expected to close by the end of the year.
Hong Kong was named Asia’s Most Resilient Economy last month, in spite of heavy economic pressures from COVID-19 and political protests. However, the city still faces unprecedented uncertainty over the political ramifications of the National Security Law, which is expected to take effect as early as July.
Eligible Hong Kong residents can apply for the Cash Payout Scheme electronically via 21 participating banks on their websites or online/mobile banking services, or submitted through Hong Kong Post’s website. Paper forms can be submitted to participating banks or posted to GPO Box 182020. For full details, visit the dedicated government website.