LCQ1: Alleviating financial burden on members of public
8.2.2023

Following is a question by the Hon Tang Fei and a reply by the Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, in the Legislative Council today (February 8): Question: There are views pointing out that stepping into 2023, Hong Kong was greeted by a new wind of price increase, and yet there has been no significant increase in the income of members of the public. The quality of life of members of the public has declined amid the escalating inflation and livelihood pressure. However, the State President has indicated that "it is important to put people first, help them overcome difficulties, especially address prominent economic and livelihood issues that people are concerned with, and truly increase their sense of contentment and happiness". In this connection, will the Government inform this Council: (1) under the price increase wind, whether the Government will formulate effective and precise relief measures to assist members of the public, especially the grassroots and low-income families, and protect their livelihood from being aggravated by the price increase wind, so as to accomplish "actively responding to people's aspirations"; if so, of the details; if not, the reasons for that; (2) given that the tariffs of the CLP Power Hong Kong Limited and the Hongkong Electric Company Limited in January this year increased by 19.8 per cent and 45.6 per cent year-on-year respectively, which far exceeded the increase of about 0.7 per cent in the median income of all households in Hong Kong from the first quarter to the third quarter of last year, whether the Government will consider introducing competition to the electricity market, allowing new electricity suppliers to join the market and exploring new sources of electricity supply, so as to drive down tariffs as far as possible on the premise of ensuring quality, thereby alleviating the burden on the livelihood of members of the public; if so, of the details; if not, the reasons for that; and (3) as there are views pointing out that the Consumption Voucher Scheme is well received by members of the public and can revitalise the economy as well as alleviate the burden on the daily lives of members of the public, whether the Government will continue to disburse consumption vouchers and consider regularising their disbursement, so that once the economy takes a downturn in a year, consumption vouchers of a reasonable value may be disbursed to members of the public according to the financial position to relieve people's hardship; if so, of the details; if not, the reasons for that? Reply: President, In consultation with the Environment and Ecology Bureau and other departments, I reply to the three parts of the question raised by the Hon Tang Fei as follows: (1) The first part of the question concerns relief measures. With a complicated and volatile external environment and a bumpy road to global economic recovery lying ahead, Hong Kong's economy will still be fraught with challenges. Making good use of public money to support the grassroots and people's livelihood and hence maintain social stability is a top priority for the Special Administrative Region (SAR) Government. According to the advance estimates provided by the Census and Statistics Department, the Hong Kong economy contracted by 3.5 per cent in 2022. The consumer price inflation remained moderate in overall terms last year, with the headline and underlying inflation rates averaging 1.9 per cent and 1.7 per cent respectively. With the full resumption of normal travel between Hong Kong and the Mainland starting this Monday, it is anticipated that official events as well as business, tourism and other economic activities will resume more quickly, and cross-boundary people and goods movements will increase steadily. This is expected to boost Hong Kong's exports, transportation and logistics, tourism, retail and catering sectors, and contribute to a more optimistic sentiment and outlook for Hong Kong's economy as a whole. Looking ahead, while Hong Kong's economy will certainly perform better in 2023 as compared with last year, the external environment is still full of challenges and uncertainties. Economic recovery is, after all, a process. Only by creating a stable and favourable environment for economic development, and by adopting business-friendly policies and measures, can Hong Kong achieve the greatest extent of economic recovery. While we are striving to consolidate and promote Hong Kong's economic recovery, we should also, in the process of reopening and rejoicing at the recovery, dedicate our efforts in improving the living conditions and quality of life of the public. By adopting a governance model that better integrates a proactive and capable government and an efficient market, the current-term Government aims to promote the faster and better development of Hong Kong through measures in the short, medium and long term. The consultation exercise on the 2023-24 Budget is now in full swing. We are listening to and studying the views expressed by different sectors of society. As our community is gradually resuming normal and our economy has begun to stabilise, members of the public are still expecting certain relieves as part of the counter-cyclical measures taken by the Government. But on the road to economic recovery, there is also a pressing need to ride on the recovery momentum and allocate additional resources to promote economic development, thus allowing Hong Kong to enjoy speedy, robust and steady social and economic development in future. While appreciating that members of the public have different expectations with regard to the Government's relief measures, we should adhere to the principles of exercising fiscal prudence, keeping expenditure within the limits of revenue and committing resources as and when justified and needed in public finance management when allocating resources for taking forward necessary initiatives so as to maintain fiscal robustness and sustainability, given a fiscal deficit, an unfavourable economic environment and limited financial resources. In deciding what specific relief measures to be taken, the Government will consider a host of factors, such as prevailing economic situation, its financial position and public needs, in a holistic manner. (2) The second part of the question is about the burden of electricity charges on the public. Serving the overall interests of the community tops the agenda of Government's administration, and we fully understand the concerns and worries of society about the large increase in tariffs. Under the current economic atmosphere, the Government believes that the power companies should shoulder their social responsibilities and use the best endeavours in riding out the difficulties together with the public. Therefore, in multiple rounds of negotiations on the 2023 tariff adjustments, the Government expressly requested the power companies to mitigate the increase in tariffs in their best endeavours, with a view to lowering the current tariff increase which is principally due to the rise in international fuel prices. Whilst continuing request the two power companies to shoulder their social responsibilities, we will keep on examining critically the power companies' capital expenditures in accordance with the Scheme of Control Agreements (SCAs). By exercising stringent control, we can ensure that the power companies' investments are only made according to the actual needs of Hong Kong. Through controlling their deployment of capital, the level of tariffs can be suppressed to the maximum extent possible. Besides, under the SCAs, the fuel cost is charged on an actual basis such that the power companies cannot make any profits therefrom, while maintaining a stable electricity supply in Hong Kong. The Government has also been monitoring the fuel prices and procurement mechanism of the power companies. Looking forward, we will continue to explore various measures to stabilise electricity tariffs, including developing a diversified fuel mix, as well as strengthening collaboration with neighbouring regions to increase the import of zero-carbon energy (for example, wind, solar and nuclear energy). We will also explore and examine feasible options under the SCAs, including the introduction of competition in the long term, in order to suppress the level of tariffs. (3) The third part of the question is related to consumption vouchers. The Government has implemented two rounds of Consumption Voucher Scheme (CVS) in the past two years, disbursing electronic consumption vouchers of $5,000 and $10,000 to eligible persons respectively, benefiting more than 6 million people each year and injecting a total of over $95 billion of purchasing power into the local consumption market. The overall response of the community towards the schemes has been very positive. People consider that the Scheme has helped boost consumer sentiment and promote the wider adoption of local electronic payment. However, the CVS incurs a relatively large amount of public fund, in deciding whether to launch similar initiatives again, the SAR Government must make prudent and holistic considerations, including the social livelihood and economic conditions, the current financial situation, etc., to ensure that the measures are in the overall interest of Hong Kong. Thank you, President.