Why Did the Government Drop the HK$6,000 MPF Injection?

Why did the 2011 budget U-turn?

In March 2011, Financial Secretary John Tsang made a historic budget revision: scrapping the MPF injection in favour of HK$6,000 cash for each of about six million Hong Kong permanent residents aged 18 or above. Bowing to public anger, he also announced a 75% salaries-tax rebate capped at HK$6,000 for 1.4 million taxpayers; the two measures cost over HK$40 billion — HK$16 billion more than the original plan.

Why was the MPF injection so unpopular?

Crediting HK$6,000 into MPF accounts locked the money away for decades — distant water for a nearby fire. With MPF’s high fees and low returns, one official admitted privately that MPF was already “an original sin” in Hongkongers’ hearts — the wrong vehicle for a handout.

What were the handout’s details and controversies?

The HK$36 billion handout’s cut-off dates for age 18 and seven years’ residence were still to be worked out; a separate pot would cover about 300,000 “N-nils” missed by both measures. Scholar Yip Kin-man called the reversal a governance defeat, saying the government had demolished its own rationale; unionist Wong Kwok-kin urged stressing it was a one-off.