草稿:Consumption Voucher Scheme

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Implementation[编辑]

2021 [1]

Amidst the economic downturn brought by the COVID-19, the reigning Financial Secretary of Hong Kong, Mr. CHAN, Mo-po Paul, has decided to disburse consumption vouchers for a total of $5,000. On 24th February 2021, he, in his budget speech announced the primary plan to issue the vouchers, which was to disburse in 5 instalments by chosen stored value facilities operators. The plan is expected to utilize $36 billion, and 7.2 million people shall be benefited [2].

On 18th June 2021, there were updates about the implementation of the scheme. In addition to a press conference, there was a website to introduce the scheme (https://www.consumptionvoucher.gov.hk/tc/index.html). Important points to note are as follows:

Eligibility

A Hong Kong resident of 18 years old by 18th June 2021 with: (i) a Hong Kong (Permanent) Identity Card issued by the HKSAR Government; or (ii) the Certificate of Exemption issued by the Commissioner of Registration under the Registration of Persons Regulations, Cap. 177A; or (iii) the Permit for Proceeding to Hong Kong and Macao.

Applications from those absent from Hong Kong for 2 years before 18th June 2021 are also accepted if they are (i) studying overseas; or (ii) participating in the Working Holiday Scheme administered by the Labour Department; or (iii) hospitalised outside Hong Kong; or (iv) staff or their companions working abroad for the HKSAR government or (v) participants of Portable Comprehensive Social Security Assistance Scheme, Guangdong Scheme, or Fujian Scheme.

Payment

4 Stored Value Facilities licensed under the Hong Kong Monetary Authority were chosen to facilitate the distribution of the consumption vouchers: (i)Alipay Financial Services (HK) Limited – AlipayHK, (ii) Octopus Cards Limited–Octopus card, (iii) TNG (Asia) Limited–Tap & Go and (iv) WeChat Pay Hong Kong Limited–WeChat Pay.

Participants were able to choose which one they would like to use throughout the period and the vouchers are not transferable from the chosen platform to another (even though it was one from the selected platform). And participants are not allowed to cash out the vouchers. Moreover, every selected platform is supported by a mobile application.

Timeline

The registration period lasts from 4th July to 14th August 2021 (Electronic applications are dealt with in 2 rounds while all paper registrations were dealt with by the end of the whole period: First round: 4-17th July 2021; Second round: 18th July - 14th August 2021).

For non-Octopus users, the vouchers were disbursed (automatically to the registered account) on 2 separate dates: The first-round registrants would get $2,000 on 1st August 2021 and $3,000 on 1st October 2021. The vouchers were due on 31st December 2021. The second-round registrants would get $2,000 on 1st September 2021 and $3,000 on 1st November 2021. The vouchers were due on 31st January 2022.

For Octopus users, the vouchers were disbursed (and should be collected through the Octopus App or at Subsidy Collection Points or Octopus Service Points, outlets of 7-11, Circle K and Wellcome supermarket) on 3 separate dates: The first-round registrants would get $2,000 on 1st August 2021 and $2,000 on 1st October 2021. The second-round registrants would get $2,000 on 1st September 2021 and $2,000 on 1st November 2021. The available date of the third instalment ($1,000) depended on the date $4,000 had been spent, which shall be the 16th day of the next month of the day which the requirement had been met. And all amounts should have been collected by 31st March 2021 (but later extended to 30th September 2022).

Usage

The vouchers can be spent on local retail stores, catering and service outlets and online platforms (if registered). Payment to the following parties was prohibited: the government, public utilities, public organisations (including charity), schools, overseas stores, financial products sellers and unregistered individuals.

Participants can use the vouchers in any local outlets if it supports the payment by having a suitable machine for payment (because not all stores support all four selected stored value facilities). More restrictions were applied to online shopping besides the ways of payment supported since participants can only spend the vouchers on overseas purchases.

To boost the use of Octopus Card acceptance, the government promised to urge the Octopus Card Limited in promoting its services at a discounted price[3].


2022 [5]

As the pandemic adversity persists, Mr. Chan has again announced that there would be a sum of $10,000 vouchers disbursed in the fiscal year 2022-2023. It is expected that the 2022 scheme would benefit 6.6 million Hong Kong residents (6.3 million in 2021), involving $66 billion of the financial reserves [4].

Eligibility

The requirements are basically the same. Only this time, the ‘New Arrivals’ (also known as the ‘New Immigrants from Mainland China’) who should also be 18 years old or above are also eligible to apply.

Payment

There will be 2 rounds of instalments. The first round would be disbursed through the same account for the 2021-vouchers. In addition to the 4 stored value facilities, the government would introduce 2 more during the second phase, which are the services provided by 2 of the licensed banks in Hong Kong – BoC Pay and Payme from HSBC by Bank of China (Hong Kong) Limited and Hongkong and Shanghai Banking Corporation Limited (The) respectively[6].

In case some people may have lost or deactivated their original accounts/cards, they should apply for a new one and apply to change their payment information by emailing or posting an application form (to be obtained by calling the hotline 18 5000 or from the website) to the scheme’s secretariat (Address: Consumption Voucher Scheme Secretariat, 7 GPO P.O. Box 185000, Hong Kong) with a copy of the HKID. And these individuals can only use the same platform as the one used last time. According to the government, about 95,000 people needed to update their payment information[7].

Timeline

The first round ($5,000) has been disbursed to the existing registrants on 7th April 2022. The details of the second phase are unknown yet, only that it should be expected to be mid-2022. New eligibles and the New Arrivals need to wait until the second round of instalments.

Similar to 2021, Octopus Card users only received part of the voucher ($4,000) on 7th April 2022. Another ($1,000) shall be collected on the 16th day of the next month of which one has spent $4,000. The latest collection date is 31st December 2022. However, due to the stored value limit of $3,000 in an Octopus card, participants should collect their vouchers whenever the card is available.

Usage

Same as the 2021 scheme.


Comparison to Cash Payout Scheme[8]

Eligibility

The criteria were similar to the Consumption Voucher Scheme, though New Arrivals were not benefited from this scheme.

Timeline

The Electronic Registration period lasts from 21st June 2020 to 31st December 2021. Registrants who applied for the scheme within the first 10 days during the registration period (21st - 30th June 2020) would receive the amount starting from 6th July 2020. Otherwise, they should receive it 1 week after registration.

The Paper Registration was divided into 3 phases: (i) For eligibles born in 1955 or before, they could start registering on 21st June 2020; (ii) For eligibles born from 1956 to 1970, they could start registering on 5th July 2020; (iii) For eligibles born from 1971 to 2022, they could start registering on 19th July 2020. Successful registrants should expect to receive the subsidy at least 24 days after their registration.

All instalments were made at once.

Payment

Up to 21 retail banks (e.g. Bank of China [Hong Kong], Bank of East Asia, etc., including 1 virtual bank: ZA Bank) were able to work as the medium of receiving payment. The payment was given by either transfer or cheque.

Usage

Since the subsidy was given like cash to the registrants, they could use it wherever they want, including overseas purchases.

Controversy[编辑]

Trouble in Registration

Many elderly encounter difficulties in registering due to technological difficulties. In particular, the elderly are not used to using or not owning computers or smartphones to fill in registration forms.1 Moreover, some elderly failed to receive messages of confirmation of registration or instruction to reapply to the scheme.2 This creates chaos among the elderly struggling to sign up for the scheme.

In September 2021, more than 100 disgruntled elderly citizens gathered at the consumption voucher scheme's secretariat in Mong Kok yesterday as they did not receive their first batch of the HK$2,000 vouchers.3

Financial Secretary Paul Chan has again apologized for the bungled rollout of the consumption voucher scheme which forced elderly citizens to queue up in the heat for hours to re-submit their manual applications. “We saw many elderly people who … had to wait for a while because of the sudden surge in people flow. I am very sorry,”4


High Administrative Fees

The administration fees of distribution with electronic payment platforms are significantly higher than cash handouts or direct bank transactions. There are arguments that using electronic platforms would waste the taxpayer’s money.


Comparison of all the Cash Payout Scheme

Cash Payout Scheme Total Cost for the Scheme (Billion) Administration Cost (Million) Per Person Administration Expense ($)
$6000 Cash Payout Scheme (2011) 206 33.7
$10000 Cash Handout Scheme (2020) 71 360 51.4
$5000 Consumption Voucher Scheme (2021) 600 84.7
$10000 Consumption Voucher Scheme (2022) 66.4 400


Inflation

While many shops take advantage of the distribution of consumption vouchers to raise the price of the commodities to reap more profits, citizens have no choice but can only absorb the raised price. The limited period for the usage of the consumption voucher allows the companies to raise their price before expiration knowing that citizens would have no choice of saving the vouchers. If the scheme was distributed with cash instead, citizens could choose to save or spend on desired products. Therefore, the expiratory nature of the consumption voucher resulted in inflation. However, this goes against the government’s objective of relieving the citizens' financial burden. The companies instead of the citizens will benefit from the scheme in the long run. As the increased price is unlikely to go down after the scheme, citizens will suffer from inflation which the effects is more prominent once the scheme is over.

Statistics and complaints

According to a study from Sing Tao Daily, the price of daily commodities such as cooking oil, can foods, and dairy products increased from 10 to 60 percent.9 Also, prices were found to increase by around 10 percent for electronics, medicine, and healthcare products.10 According to the consumer council, there were 299 filed complaints over the increased price after the push out of the 2021 consumption voucher scheme.11

Effectiveness[编辑]

Multiplier Effect

According to the research from CUHK, the Consumption Voucher Scheme increased the consumption incentive of the citizens on dining, groceries and electric gadgets. These three categories dominated about 60% of the consumption expenditure.(1) The increasing expenditure on these categories reflects that citizens are willing to spend more after getting the voucher. At the same time, the increasing expenditure represents the retailers and businesses were receiving more revenue from the consumers. This multiplier effect will boost the economy as citizens have more to spend. The research from CUHK also points out that the effect of the Consumption Voucher Scheme is higher than the US and Taiwan when these countries launched their Consumption Voucher Scheme.(2) The scheme had a real effect on stimulating consumption in the economy.


Endorsement on Electronic Transaction

As citizens are choosing from four eligible electronic payment platforms to receive their vouchers, this boosts the usage of electronic transactions. About 70% of the eligible recipients chose Octopus as the platform for the voucher as it had been widely used in Hong Kong.(3) (4) In a report conducted by LUHK, there were about 30% of the respondents installed and registered for a new electronic payment system due to the Consumption Voucher Scheme. (5) The scheme promotes the four electronic transaction platforms as the vouchers were bundled with electronic payment. Using electronic payment also encourages the business sector to provide more payment channels, for example, AlipayHK dismissed the transaction cost carried by the business sector. Therefore, the transaction cost between the consumers and merchants decreased by 30%. (6)

However, the long-term effect on electronic payment was not favored by scholars. (7) The discount provided by the platforms will not last forever, small retailers might therefore cancel the electronic payment platforms once the cost is too high for them. Also, the government is criticized as there is no follow-up plan for enhancing the market of electronic payment. The government does not provide other policies to support the scheme. For example, the government approved 16 licenses for different electronic payment platforms including those that are unpopular, this led to the saturation of the market of electronic payment platforms. (8) Also, the four platforms dominated the market of electronic payment, it is difficult for the others to compete with them. Therefore, the Consumption Voucher Scheme did not have the same impact on electronic payment as it gave in the short run.

Reference[编辑]