The Hong Kong government should pay the promised HK$10,000 (US$1,290) handout for each permanent resident in June so that the money is spent locally to boost the city’s sagging economy, a former minister said.

“Hong Kong people like travelling and if the HK$10,000 payout is made after border controls are relaxed, most of this money will be spent on hotels or spas in Japan or other travel hotspots in Europe,” said Frederick Ma Si-hang, former secretary for financial services and the treasury.

Registrations for the HK$71.1 billion cash handout should be brought forward to this month and payments should be made in June “as people will shop and dine in Hong Kong if they are unable to easily travel overseas,” he said in an interview with the South China Morning Post.

Ma was a Hong Kong minister from July 2002 to June 2007, and his term included a period when the city was struck by the severe acute respiratory syndrome (Sars) outbreak in 2003.

The cash incentive was the centrepiece of Financial Secretary Paul Chan Mo-po’s budget in February. It was aimed at easing the financial burden on Hongkongers and injecting new life into an economy ravaged by months of social unrest and the coronavirus outbreak. Under his timetable, registrations are not due until end-June, with disbursements only in July at the latest.

Ma said that according to protocol the government has to pass the budget in the Legislative Council before it can allow people to register for the handout, but he added that these are unusual times and the government can make an exception in this case to start the registrations earlier so that the payments can be processed quickly.

Ma’s call was supported by lawmakers and entrepreneurs who want the government to do more to support the economy, which contracted by a record 8.9 per cent year on year in the first quarter due to the Covid-19 pandemic and is expected to shrink by 4 per cent to 7 per cent for the full year.

The disease has infected more than 4.2 million people and killed nearly 300,000 worldwide. In Hong Kong, the virus has infected more than 1,000 people and claimed four lives. Many governments, including the US, UK, Japan and Hong Kong, have closed their borders and made it mandatory for overseas returnees to be quarantined for 14 days. The crisis has forced people to work from home and hit the tourism, hospitality and leisure industries hard.

“It’s a good suggestion calling upon the government to give the handout as soon as possible,” said Peter Shiu Ka-fai, a lawmaker representing the wholesale and retail sector. “The sooner the people get the payout, the faster they will spend, which will help retailers and restaurants that have suffered from the outbreak and protests.”

A government source, however, said it would be impossible to speed up the administration process, and that it will proceed according to the original schedule.

Mathieu Lahalle, who co-owns a western restaurant chain in Hong Kong, said that if the government could give the payout to residents earlier, it would encourage more local people to dine out and help struggling local businesses.

“If everybody spends more locally, the impact of the HK$71.1 billion handout will provide a huge boost to the local economy,” Ma said.

Ma said that once the Covid-19 situation improves and normal travel resumes, the government should repeat what it did in 2003 by inviting some superstars, such as pop star Lady Gaga or pianist Lang Lang, to host shows and concerts here to attract overseas tourists to Hong Kong.