The surprisingly cumbersome application procedure triggered the recent public outcry, but the controversy over the government’s redistribution philosophy existed for years.
The Hong Kong government announced that the “Caring and Sharing" cash handout scheme began application from January 21 onwards. Eligible citizens are able to receive up to 4,000 HKD, which amounts to 11 billion HKD from public purse.
Giving out cash should have made everyone happy, but people soon got frustrated because they had trouble completing application forms. Facing pressure from citizens and political parties for days, the government simplified the procedure.
A remedial measure to the mass
In February 2018, Paul Chan, the Financial Secretary, delivered his second Budget speech. While the government rolled out considerable measures to benefit the propertied class and taxpayers on the one hand, and the welfare recipients on the other, it neglected the relatively needy.
Who belong to the relatively needy? They are those who do not own a flat, do not pay tax, but not poor enough to receive welfare.
The Budget stated that eligible elderly and other social security recipients could receive extra allowances. Also, residential or commercial property owners could waive a certain portion of the rates. Taxpayers could enjoy reduction of profits tax and salaries tax. It is in this respect that the government was blamed, since property owners and taxpayers were not the most needed groups.
More importantly, the relatively needy vowed for an adequate share of the fruits from the strong economic growth. One month later, the government bowed to pressure and agreed to launch the 11 billion HKD-worth Caring and Sharing scheme as a remedial measure. It has been estimated that 2.8 million adult citizens would benefit from the handouts.
One might think that the government could finally appease all critics, but the lengthy administration process, complicated eligibility criteria, and application procedure plainly escalated public anger.
Lengthy, complicated, backward application process
First, until now, the government has already spent around one year to develop a new electronic database, recruit staff and launch promotion, and requires extra three months for verifying applicants. It is expected that the earliest payment will be delivered this April. Some people joked that the care and share is meaningless as one might have already died before getting the money.
Second, since some of the recipients had already enjoyed some benefits from the Budget, the cash handout is not in a flat amount. Those who did not enjoy any benefits can obtain the full amount of 4,000 HKD, but those who had enjoyed tax breaks or rate concessions in this financial year are only able to get the difference between 4,000 HKD and the concession.
Third, contrary to the pursuit of e-government and smart city, the government demands applicants to submit paper application, and to provide physical proof of address and bank account. Officials explained that setting up a safe and secure electronic platform would require more than 18 months, which would further delay the cash handout, although Charles Mok, the lawmaker representing the IT industry dismissed the claim.
The government also underestimated the demand for physical application forms. Officials had expected that majority of residents would download the forms online, but the truth was that many were unable to print them out by themselves, and instead queued up outside government district offices for hours to get the documents.
It is not that difficult to fill in the forms, but many people were not used to submitting financial information, and asked district councillors for help. Moreover, a considerable number of applicants got stuck in providing address proof, either because not all family members have their names on utility bills, or all bill payments have gone online and no physical documents at hand.
In response to numerous attacks from citizens and political parties, the government simplified the application procedure, including waiving the requirement for applicants to provide proof of address.
Paul Chan apologized several times for the chaos, while Matthew Cheung, the Chief Secretary, admitted that the government makes sure that all future policies relating to livelihood issues, will put themselves into the shoes of grassroots.
One-time, short-term offer may become commonplace
This is not the first time the government deliver cash handout. In 2011, the previous Financial Secretary John Tsang promised to give out 6,000 HKD to all adults. Many Hong Kongers like to compare the two cash handout schemes, since both cases were created out of discontents over wealth distribution.
However, the 2011 exercise was pretty smooth compared to the current one. This is because the payout amount was not compromised by other concessions, saving much time and effort in administration. The first batch of recipients got their cash around just eight months after the announcement. Obviously, the current government has underestimated administrative difficulty, but has overestimated people’s capability in handling application on their own.
Even the administrative process had run smoothly, this does not mean the two cash handout schemes are a correct move by the government. Some critics have argued that when the government has a record-breaking 1,000 billion HKD financial reserve, citizens and politicians are getting used to asking for short-term benefits. That sum of public money could have been allocated to long-term investment such as medical expenses or elderly care. It is especially worrying when the current government had once determined not to allow unconditional cash handout, but went back on its word.