Wednesday 2 March 2011

News: Handouts & tax rebates in budget U-turn

Have been so busy these days, with work and with study, so I suppose I will often miss my posting schedules, but I will try my best to keep it 3 entries a week to keep you all reading, listening and learning!

Great news today is the U-turn in the 2011-2012 Budget! If you still don't know why, please read the following news from RTHK, audio clips included for listening practice.

Financial Secretary John Tsang

Handouts & tax rebates in budget U-turn
audioJanice Wong reports
audioCivic Party lawmaker Ronny Tong
audioDemocratic Party chairman Albert Ho
Legislators still unhappy despite budget U-turn. Photo: RTHK.
The Financial Secretary, John Tsang, has made radical changes to his budget following mounting political pressure for him to return wealth to the people.The unpopular plan to inject HK$6,000 into Mandatory Provident Fund accounts has been scrapped. Mr Tsang has instead proposed that all permanent residents over the age of 18 will receive a HK$6,000 handout from the government, while taxpayers will enjoy tax rebates worth up to HK$6,000. The new measures are expected to cost the government about HK$40-billion.
The HK$6,000 handout is to be distributed through a 'new platform' which would allow people to withdraw the full amount, while being structured to encourage them to save.
In addition, every taxpayer will enjoy a tax reduction of up to 75-percent, capped at S6,000 each. The government will also set aside a sum of money to help needy people who don't benefit from either of the new measures, though no details were announced.
The Financial Secretary made the announcement after meeting with pro-establishment lawmakers for the second time since Friday. Many had criticised his original proposals, and 22 councillors from the pan-democratic camp vowed to vote against ratifying the budget unless major changes were made.
However, legislators immediately criticised the turnaround. Ronny Tong of the Civic Party says the HK$6,000 handout is a short-sighted government ploy to placate public anger over the budget.
The Democratic Party also expressed disappointment over the lack of long-term measures to tackle deep-rooted problems such as rising property prices. Its chairman, Albert Ho, said that the rare budget U-turn had undermined the government's authority, and urged people to take part in a protest on Sunday against the budget.

Like I have mentioned before in Economics: Hong Kong Budget 2011-2012, keeping our tax money will help inflation is a very bad argument. I'm glad that our Financial Secretary finally hears the voices. 

Will he earn good praises after this? Less anger for sure, but it was a redemption of his mistake, not an act of his intelligence.

How will you use that money? 

I will definitely support using that money for investment. $6000 can be used to buy stocks, but then you will need to know which is a safe stock to buy.

If you are really going to spend it, I suggest you wait for iPhone 5, not because they are new and nice, but because they have a high resell value, so you'll get to use it, and get to have most of your money back. Then of course, you have to make sure your phone will not be stolen before you resell it.

If you want to spend it on food, I would recommend you use the money to buy some food that can be stored up to a year or two, because most of the agricultural commodities such as wheat, sugar, soybeans, oat and rice will only get more expensive in the future years as the weather damages food production worldwide.

Should we use the money for clothes or travelling? Not recommended, because once the money is spent, you do get joy and memories, but in the long run, these are very short-term gains.

What do you think?


radical -- (adj) believing or expressing the belief that there should be great or extreme social or political change
mandatory -- (adj) FORMAL describes something which must be done, or which is demanded by law
distribute -- (vb) [T] to give something out to several people, or to spread or supply something
placate -- (vb) [T] to stop someone from feeling angry
undermine -- (vb) [T] to make someone less confident, less powerful or less likely to succeed, or to make something weaker, often gradually
redemption -- (n) to be too bad to be improved or saved by anyone
commodity -- (n) [C] a substance or product that can be traded, bought or sold

Handouts & tax rebates in budget U-turn @ RTHK

Economics: Hong Kong Budget 2011-2012 @ Locky's English Playground