• Monday, June 24, 2024
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Parents get $2,500 cash per new born in Hong Kong, but they need more

Dilemma: New Parents get $2,500 cash per baby in Hong Kong, but not enough to cover house rent

New parents in Hong Kong are set to receive cash payouts of over $2,500 for each newborn as part of an effort to combat the city’s persistently low birth rate. However, for many residents in this expensive city, the financial incentive appears insufficient to cover even a month’s rent.

John Lee Ka-chiu, Hong Kong Chief Executive, unveiled the plan during his annual policy address, announcing that parents of babies born from now until 2026 would receive HK$20,000 (equivalent to $2,556) per child. This initiative aims to address the city’s record-low birth rate of 0.9 births per woman, significantly below the 2.1 required for a stable population, CNN reported.

“Childbearing is a major life decision involving many considerations,” Lee said during the announcement. This policy was part of a broader set of financial measures, including a reduction in home buyers’ stamp duty from 15 percent to 7.5  percent.

While this payout may seem substantial, it falls short of the incentives offered in other East Asian countries grappling with similar demographic challenges. For instance, Singapore offers significant financial incentives and substantial maternity and paternity leave. South Korea and Japan also provide substantial support for parents.

Singapore (birth rate: 1.05) offers a $8,036 handout for both the first and second child and $9,497 for the third child, alongside four weeks of paternity leave (up to 16 weeks for maternity), unpaid infant care leave and tax relief for working mothers, the CNN report read in part. “South Korea (birth rate 0.78) currently hands out $518 per month until the child reaches one year old, with that figure expected to rise to $740 next year. In Japan (birth rate 1.3), parents get a monthly allowance of $107 dollars for each newborn until two years of age. For each child between three years old and senior high, parents get $66.7 per month.”

Many Hong Kong residents, however, express skepticism about the impact of this measure on their family planning. They point out that the high cost of living in the city, including high housing expenses and other living costs, remains a major deterrent to having children.

Ken Lau, a father contemplating a second child, remarked, “It can’t even cover one month of my mortgage, as well as the gas and electricity bills.”

Read also: Is your parenting hurting your child’s self-confidence

“How about one handout per year? The move would do little to change my mind about having a second child,” Kristy Chan, a mother told CNN.

Hong Kong’s real estate agency Midland Realty reveals that the average monthly rent for a 500-square-foot two-bedroom flat in the city is about $2,253, consuming more than 90% of the government’s payout. High home prices, steep interest rates, and rising expenses for baby products further discourage couples from expanding their families.

Furthermore, Paul Yip Siu-fai, who studies population health at the University of Hong Kong, emphasised that addressing low birth rates should include long-term financial support and parent-friendly work environments. He urged society to share the responsibility of childbirth and called for more substantial efforts to assist parents in raising and educating their children.

Sze Lai-shan, deputy director of the Society for Community Organization, stressed that lower-income individuals face a challenging choice due to the high cost of childcare and the inability to take time off from work to care for their children.

Hong Kong is not the only place grappling with a declining birth population. According to the CIA World Factbook, Monaco holds the record for the lowest birth rate globally, with an average of 6.63 annual births per 1,000 people per year. In comparison, the United Nations assigns a similar rank to the U.S. territory Puerto Rico (6.55) and South Korea (6.77).