Budget 2023-24: child allowance boosted by HK$10,000, but is increase enough to turn around Hong Kong’s falling birth rate?
- Financial Secretary Paul Chan proposes increasing allowance per child to HK$130,000 as ‘first step’ in tackling record low birth rate
- Professor Paul Yip Siu-fai calls move ‘good gesture’ but ultimately ineffective in convincing couples to have more children
Hong Kong will increase the child allowance rate by HK$10,000 (US$1,275) in a bid to ease financial strain on families, and while the move has been welcomed by one population expert, he warned the more generous amount would do little to boost the decline in the birth rate.
Financial Secretary Paul Chan Mo-po on Wednesday also proposed doubling the tax deduction for retirement fund contributions made by employers for workers aged 65 or above to encourage greater employment of older residents.
The change to the child allowance came a week after the government announced the city recorded only 32,500 births last year, a record low.
Chan called for increasing the allowance per child from the current HK$120,000 to HK$130,000 and doubling the amount for newborns in the coming financial year.
The government estimates the higher amounts will benefit 324,000 taxpayers while reducing government revenue by HK$610 million a year.
Authorities last increased the child allowance five years ago, raising it from HK$100,000.
The minister conceded in his post-speech press conference the city’s low birth rate was a “big policy issue” that required study and setting a higher child allowance was a first step to tackling the problem.
“We now first do something in the budget to increase the child allowance,” he said. “We will further study this issue [of the low birth rate]. The effectiveness of only relying on tax measures [to boost the number of births] is comparatively low.”
