Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Mar 30, 2023

Tax incentives ‘not enough’ to reverse Hong Kong’s declining birth rate

Tax incentives ‘not enough’ to reverse Hong Kong’s declining birth rate

Latest budget raises child allowance, but academics say effect of financial aid on encouraging people to have more babies is limited.

Hong Kong will need more than tax incentives to tackle its low birth rate crisis, even if the government is willing to offer more than it pledged in its budget blueprint, experts in population studies have said.

The question over how to tackle one of the biggest challenges facing most advanced economies gained fresh urgency in Hong Kong after Financial Secretary Paul Chan Mo-po announced in his budget on Wednesday he would raise the child allowance by HK$10,000 (US$1,275) to HK$130,000.

From politicians to residents, the increase was lambasted as far too little given the cost of raising a child in the city.

Academics who track birth rate trends around the world said financial aid would at best only encourage those already planning to have a child to do so sooner, and so long as the assistance was significant enough.

Hong Kong families must contend with expensive education, cramped and costly living conditions and an unfriendly culture for working mothers, they argued.

“There is international evidence suggesting that financial incentives including tax incentives have a positive impact on fertility, and at least, may encourage couples to give birth earlier,” said assistant professor Tan Poh Lin, who studies Singapore’s low birth rate at the Lee Kuan Yew School of Public Policy in the city state.

But the sociologist said the evidence, mostly coming from France, Canada and America, might not be as convincing in East Asia, where competition for school spots was much more intense, and social expectations and responsibilities placed on parents significantly greater.

Stuart Gietel-Basten, director of Centre for Aging Science at the Hong Kong University of Science and Technology, said it was a cultural norm in Hong Kong for children to work extremely hard in a competitive schooling environment to ensure better job prospects later in life.

“If you’re a woman, you’ve worked your way up, you’ve got yourself a decent job. If you have kids, your career is going to be in jeopardy,” he said, adding that money was “never enough” to compensate for what the mothers gave up.

He said northern European countries such as Sweden and Finland had long identified the differential treatment women faced and made adjustments accordingly. The two countries, hailed for their birth policies a decade ago, have started to face challenges in recent years due to economic uncertainties.

Singapore currently has one of the lowest fertility rates in the world despite its annual spending to boost its birth rate quintupling to HK$14.1 billion from 2001 to 2017. The rate was 1.12 in 2021.

South Korea offers the equivalent of more than HK$4,000 a month to families with children under the age of one, with the payment expected to rise to more than HK$6,000 next year.

It is the only country in the world where the fertility rate is below one, dropping to 0.78 in 2022, a fall of 4.4 per cent over the previous year.

According to the Census and Statistics Department, the city’s fertility rate dropped from 1,080 in 2018 to 772 in 2021. The rate refers to the average number of babies born alive to 1,000 women during their lifetime, with the figure excluding domestic helpers.

Hong Kong’s birth rate was a hot issue at the Legislative Council on Thursday, when lawmakers grilled the financial secretary on the policy decisions in his budget.

Chan said the government was aware of the consequence of a declining population and birth rate, which would affect the city’s economic development, saying it had made “slight” adjustments to the tax deduction for parents.

But he defended his decision not to spend more on the problem.

“We had four years of deficits in the past five years, the year before last year it was around HK$200 billion, this year it is HK$140 billion, so we really need to spend within our means,” he said.

Paul Yip Siu-fai, the chair professor in population health of the University of Hong Kong, said the government had yet to treat the low birth rate as “a matter of life and death” as the Singaporean government had

“It will not work unless you invest a very large sum of money,” he said.

Instead, the government should focus on improving people’s quality of life to make them happier while improving work conditions for women, Yip suggested.

According to official figures released earlier this month, the city’s population dipped 0.9 per cent from the year before to 7,333,200 in 2022, while births plunged to a record low of 32,500. The overall population drop was deeper than the previous year’s 0.3 per cent decrease.


Related Articles

Hong Kong News
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
“We've had evidence prior to the pandemic that masks were largely ineffective at preventing community transmission of influenza “
Former Starbucks CEO Howard Schultz:
Former Starbucks CEO Howard Schultz rejects being labeled a "billionaire"
Jamie Dimon is being deposed over JPMorgan Chase role in Epstein lawsuits
Brand new security footage has just been released to the public showing the Active shooter Audrey Elizabeth Hale drove to Covenant Church School in her Honda Fit this morning, parked, and shot her way into the building
Social Media censoring users for saying the true
Smart Iranian fashion designer teaching dummy TV anchors lesson about reality
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
Singapore’s Prime Minister says China and US need to stabilize relations because world can't afford a confict between the two superpowers
In a dramatic U-turn against His Government: Judicial Reform Legislation Must Be Halted, Says Israeli Defense Minister Yoav Gallant
Gordon Moore, a co-founder of Intel Corporation, died at 94
Powell: Silicon Valley Bank was an 'outlier'
Bordeaux town hall set on fire in France pro democracy protest
Police violence in Paris
Paris: Some of the police are stepping down and showing solidarity with the protesters.
Donald Trump arrested – Twitter goes wild with doctored pictures
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Goldman Sachs cuts outlook for European bank debt over Credit Suisse crisis
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
The BBC problem about China
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
Announcing GPT-4
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
'No relation to the American SVB': India's SVC Bank acts to calm depositors amid brand name confusion.
Good news: The U.S. government is now guaranteeing all deposits, held by, Silicon Valley Bank, and the funds are available as of today
Silicon Valley Bank exec was Lehman Brothers CFO
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
Saudi Arabia has announced a major breakthrough in diplomacy with Iran after two years of intense talks
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
A primitive judge in Australia sparked outrage when he told a breastfeeding woman to leave his courtroom for being “a distraction"