Budget splurges HK$24 billion: HK$6,000 into every MPF account — locked until 65

Financial Secretary John Tsang’s 2011–12 budget, delivered amid a HK$71.3 billion surplus, scraps the direct tax rebates of the past three years and instead pours HK$24 billion into one-off HK$6,000 injections for 3 million-plus MPF and ORSO account holders — withdrawable only at age 65.

Why no tax rebate this time?

Fear of fuelling inflation. Tsang explained that forecast 2011 inflation of 4.5% — the highest since 1997 — was a “considerable threat”. A rebate could stoke spending and worsen inflation; his relief package, he claimed, would instead shave 1.4% off headline CPI and 2.2% off the grassroots CPI(A). He argued rebates mostly benefit a minority of taxpayers, while MPF injections reach 3 million-plus workers — “investing in the future”. Asked why even HK$10-million-a-year “kings of employees” get public money, he retorted: “How many of those are there?”

How did people react?

Parties united in rejection. The Democratic Party, DAB, Liberal Party and Civic Party all slammed the “no rebate, only MPF injection” budget for missing whole strata of society. The Democrats dubbed the government “miserly, caretaker, conservative”, calling the injection “chickens watching water — visible but undrinkable”. An HKU poll gave the budget 51.5 out of 100 — Tsang’s lowest in four budgets.

Scholars: good intentions, bad politics. Hang Seng Management College’s Suen Wai-man said rebates were unlikely to overheat inflation; injecting billions into the much-criticised MPF was “good intentions gone wrong” and politically toxic, urging simultaneous MPF reform. Community organiser Ho Hei-wah called it squandered public money — “five-have-not” grassroots workers (no CSSA, no tax, no public housing, no children, no rates bills) benefit not at all.

Note: ORSO members must open a separate MPF account to receive the injection at 65; the money lands no earlier than next year’s first quarter, sources say.

To see fund options for your topped-up account, visit MPF fund comparison.