The government will expand its plan to give a one-off grant to the Mandatory Provident Fund (MPF) accounts of an additional 400,000 workers, Financial Secretary John Tsang announced yesterday.

Tsang's maiden budget speech was passed by a vote of 45 to 3, with two votes of abstention in the Legislative Council.

The government had earlier planned to give those earning less than HK$10,000 a month a one-off grant of HK$6,000 which will be deposited into their MPF accounts, provided that they are still contributing to the accounts in late February.

Tsang yesterday extended benefit coverage to include workers who have a valid MPF account within one year before his budget speech will also benefit from the plan. In other words, those who have recently quit their jobs will benefit as well.

Tsang estimated that the number of recipients of such grant will increase from 1.3 million to 1.7 million.

The expenditure for the plan will increase to HK$11.5 billion.

The government will also pay the rent for approximately 300 elderly members living in flats provided by the Housing Society for one month, Tsang said.

Meanwhile, Tsang was concerned over the rising inflation, which has increased by 4.6 percent in the first quarter compared to the same period last year. The increase in food prices accounted for one-third of the inflation.

"Companies will likely lose in the end if they jeopardize their reputation for short-term benefits by significantly increasing prices," Tsang said. "I believe the Consumer Council and other groups will help the public assess prices of daily necessities."

But Tsang said the public need not to be too pessimistic about the inflation because various countries have stepped up measures to address the issue.

He said food supply will improve, and food price hikes will be restricted by the global economic slowdown.

Tsang said food supply in Hong Kong will be sufficient with the help of the mainland.

Tsang also said the government has no intention to amend the currency peg mechanism.

(HK Edition 04/24/2008 page1)