All permanent residents over 18 in Hong Kong will receive a HK$6,000 (US$770) cash handout this year, a decision made in response to public criticism that the government failed to consider the needs of poor people.

Cash handout for all HK residents

John Tsang, the city's Financial Secretary also said Wednesday that residents would enjoy a 75 percent income tax reduction this year capped at HK$6,000.

Tsang's original budget to the city's legislature last week was met with criticism over allegations that the plan ignored the need of the poor. Some 22 out of Hong Kong's 60 legislators threatened to veto the budget and union leaders staged a march on Sunday.

Chief Executive Donald Tsang was struck in the chest while officiating at the opening of an exhibition marking the centenary of the 1911 Revolution Tuesday night.

The person who struck him was a protester with the League of Social Democrats and he shouted "Return wealth to the people" when he hit him.

A spokesman with the Hong Kong and Macao Affairs Office of the State Council Wednesday called for "punishment according to law" of the person who physically attacked Donald Tsang.

"We express our grave concern over the incident," said the spokesman.

The financial secretary Tsang had to make a second adjustment to his new proposal. He originally suggested the HK$6,000 be deposited into the Mandatory Provident Fund accounts of residents and available for use only at retirement.

However, the Financial Secretary back down due to criticism and declared that everyone over 18 will be able to use the money soon after it is deposited into their accounts.

"Since I have delivered the budget, we have heard many recommendations that they found some of the measures not acceptable," Tsang told reporters. "And in the event, and given what I have heard and given a discussion that I had with members of the legislature, we have decided to make this decision."

The handout will cost the government HK$36 billion (US$4.6 billion).

Hong Kong resident Queenie Wong told the Global Times she liked the plan.

"It is good to have a cash handout," Wong said. "But the government revised the plan only after the public expressed frustration at the original budget. Can they think ahead of the times?"

Albert Ho, chairman of the city's Democratic Party, told reporters that the turnaround will undermine the city government's authority.

Mainland residents had mixed opinions about the plan.

"Handing out money may not be long-term plan but it is better than nothing," Shanghai resident Hu Yun said.

He Rong of Hunan said she expected the mainland to learn from Hong Kong, referring to a State Council debate that could allow those making 3,000 yuan ($456) or less to avoid taxes. The current threshold is 2,000 yuan (US$304).

"At least, the mainland government can do something to reduce taxes for the middle and lower classes."

Zhu Lijia, an expert in public management in Beijing, pointed out it is not for a good way for the mainland to learn from Hong Kong.

"A government, as the public resources manager, should work on how to maximize the public interest, better people's lives and achieve social justice instead of simply handing out money," Zhu told the Global Times.